The Director General of the Securities and Exchange Commission, Emomotimi Agama, has stated that Nigeria’s potential to become a $1 trillion economy can be fully realized through the ongoing bank recapitalisation.
This was disclosed by Agama in a statement at a recent forum in Abuja focused on the ongoing bank recapitalisation.
He highlighted the need for comprehensive economic reforms alongside strengthening the banking sector, according to The Punch.
He pointed out that recapitalized banks would be essential to supporting with those initiatives.
Agama stated, “Nigeria must diversify its economy beyond oil exports and invest in key areas, such as infrastructure, human capital, and innovation. Enhancing the business environment, reducing regulatory hurdles, and promoting financial inclusion are essential to driving sustainable growth.”
He clarified that raising a bank’s capital to comply with regulations, strengthen its financial stability, and expand its lending capabilities is described as bank recapitalisation.
“Recapitalisation through the capital market can help banks meet regulatory capital requirements, improve capital adequacy ratios, and increase lending capacity. This, in turn, will enhance financial stability and restore investor confidence,” the SEC boss added.
According to Agama, additional lending to important industries including industry, infrastructure, and agriculture might result from a recapitalized banking system.
“Such lending will drive economic growth by supporting big projects and industries, attracting foreign investors, and boosting capital inflows,” he said.
He pointed out that doing so would support banks and other businesses to list on the Nigerian Exchange Limited and expand the capital market.
The SEC recently released a framework to ensure, transparent, and efficient capital-raising process for banks and holding companies participating in the recapitalisation programme.
The framework specifies criteria for raising capital through private placements, rights issuances, and other authorized mechanisms in the recapitalization period of 2024–2026.
The Central Bank of Nigeria in Mach directed deposit money banks to improve their capitalise base.
According to the CBN recapitalization circular, national banks and commercial banks with international authorization should raise their capital bases to N200 billion and N500 billion, respectively, while banks with regional authorization should reach a capital floor of N50 billion.
