Business
NASS And Removal Of CBN’S Autonomy
Two bills are currently pending in the two chambers of the National Assembly seeking to take away the statutory autonomy being enjoyed by the Central Bank of Nigeria (CBN).
The first bill is a proposal by the Senate aimed at compelling the bank to, henceforth, submit its annual budget for consideration by the parliamentarians in order to facilitate fiscal transparency and accountability.
The second one, which has already passed its second reading in the lower chamber, seeks to amend sections of the CBN Act of 2007 which confer operational independence on the bank. The intention here is to allow the lawmakers, rather than the president, exercise the responsibility of appointing the governor and board members of the apex bank.
Even as lame as the reason advanced for the Senate’s proposal sounds, the apparent absence of one from the lower legislature to justify its intention only smacks of reckless vendetta.
Not long ago, the CBN Governor, Lamido Sanusi, had, while on summons before a committee of the Assembly, revealed that over 25 per cent of the national budget is spent on the remunerations of the federal legislators and in servicing the National Assembly.
Naturally, the distinguished members would hear no such heresy. Certainly not one said direct to their faces and on their own very turf, too. What to do? They promptly fired back at Sanusi and his bank staff, accusing them of equally gulping so much from the nation’s annual returns.
And with this unsavoury setting began the lawmakers’ relentless plot to reach for the CBN governor’s jugular and perhaps, unwittingly, the nation’s already aching wind pipe.
In spite of what the excuses may be, most analysts believe that the moves by the National Assembly members to strip the CBN of its autonomy are motivated by sheer political considerations rather than economic expediency. They, therefore, fear that this has the tendency to reduce, if not reverse, whatever successes that may have been achieved through the ongoing banking sector reforms undertaken by the CBN.
Political control of the central bank will be most ill-advised for any country that is keen to attract international investments. It is even more so for Nigeria at this time when the CBN is making a success of macroeconomic stability, essentially through the adept management of its monetary policy instruments.
State control of the CBN will not be in consonance with global best practices as Sanusi reportedly pointed out at a recent public hearing on the Senate bill. According to him, a recent study conducted by his staff on the acts establishing the central banks of 40 countries, including the US, China and South Africa showed Zimbabwe as the only case where parliament approved a central bank’s budget. Of course, everybody knows where such has led the country’s economy.
In some situations, and as was the case in this Southern African nation, a central bank which is controlled by politicians runs the risk of being compelled to abuse its powers to print the local currency if only to help finance the country’s budget deficits, especially in an election year.
The central bank’s supervisory role over commercial banks and other financial institutions will be compromised if politicians or their proxies become board members of such a regulatory authority. This is because most of them are already on the boards of these other institutions and would readily want to intervene in matters that adversely affect such organisations.
But come to think of it, the same federal lawmakers who are clamouring to check the CBN’s fiscal excesses are the very ones whose rank is replete with men and women who are currently being investigated for one financial misdemeanor or the other. Haba!
Ibelema Jumbo
The Central Bank of Nigeria (CBN) yesterday said 33 banks have met new minimum capital requirements under its recapitalisation programme, raising a combined N4.65 trillion to strengthen the financial system.
The apex bank disclosed this in a statement marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.
The statement said “Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy.”
The regulator said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said in the statement, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
It further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
To preserve these gains, the CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
The Tide learnt that foreign capital inflows into Nigeria’s banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025, up from $7.00bn recorded in 2024, amid the ongoing recapitalisation drive by the Central Bank of Nigeria.
Data from the National Bureau of Statistics capital importation report showed that the banking sector remained the dominant destination for foreign capital, accounting for $13.53bn of the total $23.22bn recorded in 2025, representing 58.26 per cent of total inflows, up from 56.81 per cent in 2024.
The surge reflects heightened investor interest in Nigerian banks as they raised fresh capital to meet new regulatory thresholds introduced by the apex bank, with industry-wide recapitalisation activities driving large-scale inflows across all quarters of the year.
However, the Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over weak credit flows to small businesses despite recent banking sector reforms.
The CPPE, led by a renowned economist, Dr Muda Yusuf, acknowledged that the ongoing bank recapitalisation exercise by the CBN has strengthened the financial system, but warned that the benefits have yet to translate into meaningful support for the real economy.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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