President Bola Tinubu on Tuesday challenged Nigerian banks to move beyond balance-sheet expansion and profitability by deploying more capital to productive businesses capable of driving investment, job creation, and economic growth.
Tinubu spoke at the opening of the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja.
The conference had the theme, “Building a Resilient Economy in an Era of Disruptions: Strategic Imperatives for the Banking and Financial Services Industry.”
Tinubu declared that the banking industry must shift from financial intermediation to economic transformation.
Represented by Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, the president said the country’s improving macroeconomic stability should not be mistaken for prosperity, stressing that the ultimate objective of the ongoing reforms is to translate stability into investment, production, jobs, and improved living standards.
Governor of Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, said the country’s economic recovery could not be sustained without a strong and high-performing banking sector.
Cardoso, who spoke at the CIBN conference, acknowledged the sacrifices made by banks and other stakeholders during the reform process, saying the reforms would soon yield concrete benefits.
CBN stepped up its focus on terrorism financing risks across the financial sector, making it a supervisory priority as it moves to strengthen safeguards against the misuse of the financial system.
That was as the Economic Management Team (EMT), the federal government’s principal platform for economic management and coordination, approved the establishment of a dedicated inter-agency committee to harmonise the macroeconomic assumptions underpinning government’s budgeting and economic planning.
At the CIBN event, also, World Bank Country Director for Nigeria, Mr. Mathew Verghis, challenged banks to redirect capital from government securities towards businesses capable of creating jobs.
Verghis warned that the current structure of bank profitability could come under pressure as interest rates declined.
President/Chairman of Council of CIBN, Dr. Dele Alabi, said the ultimate test of economic reforms would be whether improved macroeconomic indicators translated into tangible improvements in the lives of citizens.
Tinubu told the audience at the conference, “A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit. Manufacturing that is struggling cannot expand, and millions of productive companies remain outside the formal financial system.”
He said the current phase of the country’s reform journey was accelerating the conversion of stability into investment, investment into production, production into jobs, and growth into improved living standards.
Tinubu said the banking and financial services industry was central to the current transformation process.
“Therefore, we need to move from intermediation to transformation,” he stated.
The president explained, “For years, we have measured financial institutions by balance sheet growth, profitability, and shareholder returns. These remain important, but we must increasingly ask: what is the financial system doing for the real economy?
“A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit.
“Manufacturing that is struggling cannot expand, and millions of productive companies remain outside the formal financial system.”
Tinubu urged banks to reassess how they allocated capital, stressing that the success of the recently concluded banking recapitalisation exercise should be measured by its impact on the real economy rather than merely by larger balance sheets.
“A bigger bank that does not finance a more productive economy is a suboptimal outcome,” he said.
The president said the federal government was strengthening guarantees, risk-sharing arrangements, blended finance and credit enhancement mechanisms, with the National Credit Guarantee Company at the centre of efforts to crowd private capital into productive investments.
He explained that the government’s measure of success should increasingly shift from the volume of public spending to the amount of productive private capital it could catalyse.
Tinubu identified growth facilitation, financial inclusion, technology, long-term capital, and trust as five imperatives for building a resilient financial system.
On inclusion, he said access to a bank account was not enough, stating that genuine financial inclusion should enable small businesses to obtain affordable working capital while allowing young entrepreneurs to borrow based on viable cash flows rather than collateral they might not possess.
The president called for greater deployment of patient capital to infrastructure, industry, housing, and energy, stressing that long-term development cannot be financed predominantly with short-term funds.
He said the government’s reforms were already producing stronger macroeconomic indicators, citing 4.43 per cent real GDP growth in the second quarter of 2026, headline inflation of 15.43 per cent, and foreign reserves of more than $54 billion.
Tinubu also pointed to Nigeria’s removal from the Financial Action Task Force grey list, its exit from European Union’s AML/CFT deficiency list, the planned reclassification of the country by FTSE Russell as a Frontier Market, and improving investor confidence, as evidence of progress.
However, he cautioned that the gains represented the foundation rather than the final objective.
Tinubu said, “Stability is the foundation; prosperity is the destination,” adding that the next phase of reforms must accelerate the conversion of “stability into investment, investment into production, production into jobs, and growth into improved living standards”.
The president urged banks to move away from excessive reliance on government securities, which he said had made lending to productive businesses comparatively less attractive.
He envisaged a cycle in which stronger fiscal discipline would reduce government borrowing pressure; lower inflation; support lower interest rates and affordable capital; stimulate investment and production; and generate jobs, incomes, and tax revenues.
Tinubu also challenged banks to see Nigerian businesses as potential regional champions, particularly with access to the African Continental Free Trade Area market of more than 1.4 billion people.
He said the next chapter of Nigeria’s development should not merely produce larger financial institutions but “a bigger and more productive economy where capital reaches and gets”.
Cardoso: No Economy Can Thrive with Weak Banks
Speaking at the conference, Cardoso said the country’s economic recovery could not be sustained without a strong and high-performing banking sector, while acknowledging the sacrifices made by banks and other stakeholders during the reform process.
Represented by CBN Deputy Governor, Economic Policy Directorate, Mr. Philip Ikeazor, Cardoso said the macroeconomic stability achieved by the central bank was the product of unprecedented collaboration between the monetary and fiscal authorities.
He credited Tinubu for granting CBN the independence to focus on its mandate, while commending the fiscal authorities, led by the Coordinating Minister of the Economy, for their cooperation.
According to him, the major question now should be when ordinary Nigerians would begin to feel the full benefits of the reforms.
“That is on its way,” he said, explaining that some of the fiscal reforms underway, alongside monetary policy measures, would soon begin to translate into tangible benefits.
Cardoso said banks deserved recognition for their role in supporting the economy and for successfully completing the recapitalisation exercise.
He said the exercise demonstrated both the depth of Nigeria’s domestic capital market and investors’ confidence in the economy. He disclosed that banks raised about N4.65 trillion from the domestic market.
Cardoso stated, “Charity began at home. Our people put their money down — N4.65 trillion. So, when you see the confidence outside, it was also driven by that.”
The CBN governor also acknowledged the cost of the monetary adjustment undertaken to contain inflation, saying the central bank has deployed substantial liquidity management measures while returning to orthodox monetary policy.
He added that the fiscal authorities also bore significant financing costs during the adjustment period.
Cardoso said the country was now moving towards disinflation, adding that the CBN is working with the fiscal authorities and state governments to bring inflation under control and, ultimately, push it towards single digits.
World Bank: Banks Must Redirect Capital Towards Job-creating Sectors
World Bank Country Director for Nigeria, Mr. Mathew Verghis, challenged banks to redirect capital from government securities towards businesses capable of creating jobs, warning that the current structure of bank profitability could come under pressure as interest rates decline.
Verghis said Nigeria’s financial system faced three critical challenges: creating an enabling business environment, meeting the demand for finance, and improving the supply of finance.
Represented by Senior Private Sector Specialist, World Bank, Bertine Kamphuis, the country director said while there was no shortage of businesses seeking capital, there was a shortage of bankable businesses, particularly among micro, small and medium enterprises (MSMEs).
According to him, fewer than one in 20 MSMEs can access bank credit, while about nine out of 10 operate informally. He described this segment as the “missing middle” — businesses too large for microfinance institutions but still considered too small or risky by commercial banks.
The World Bank official said the segment was particularly important because it contained many of the businesses with the potential to grow and create jobs.
He also highlighted Nigeria’s infrastructure financing gap, putting annual financing needs at about $100 billion, with energy and transport alone accounting for almost 60 per cent of the requirement.
Verghis called for greater use of blended finance, guarantees, credit enhancement, and risk-sharing facilities to make private-sector investments more attractive.
He said development finance institutions, sovereign wealth funds, pension funds, and insurers could play catalytic roles by absorbing part of the risks and helping commercial investors enter underserved markets.
But he warned that banks could no longer depend heavily on government securities for yields.
Verghis said, “Banks can no longer rely solely on government securities for yields. You have to start redirecting the capital towards job-creating firms.”
He stated that declining interest rates would eventually test the sustainability of bank profitability derived from government securities and wide interest margins.
He said, “Stability was the platform that we had to aspire for, but in the end, jobs are the destination.”
Dele Alabi: True Test of Reforms is Lower Living Costs, More Jobs
President/Chairman of Council of CIBN, Dr. Dele Alabi, said the ultimate test of Nigeria’s economic reforms would be whether improved macroeconomic indicators translated into tangible improvements in the lives of citizens.
Alabi said the country’s stronger economic fundamentals, recapitalised banks, and improving investor confidence were important milestones, but not the destination.
He stated, “The true test is whether stronger fundamentals translate into lower living costs, more jobs, higher real incomes, affordable credit, reliable public services and reduced poverty.”
He urged policymakers and industry stakeholders to ensure that macroeconomic progress was felt at the level of households, small businesses, and communities.
Alabi also commended Cardoso for what he described as visionary leadership of CBN, particularly in driving the banking recapitalisation programme.
He stated that 33 banks had met the revised minimum capital requirements, with N4.65 trillion raised in fresh capital.
According to him, recent improvements in economic indicators, including the positive outlook assigned by Moody’s, the forthcoming FTSE Russell Frontier Market reclassification, and 4.43 per cent Q2 GDP growth, offer evidence of improving stability and investor confidence.
He stressed that the next phase of reform must focus on “transmission” — moving the benefits of macroeconomic stability from national balance sheets to business balance sheets and household budgets.
As part of that effort, Alabi said CIBN was advocating the establishment of scalable SME hubs nationwide to provide shared infrastructure, business advisory services, skills development, technology support, market linkages, and improved access to finance.
He said the proposed hubs would help reduce operating costs, improve the bankability of MSMEs, and connect recapitalised financial institutions more effectively to the real sector.
Alabi said the initiative formed part of the institute’s IMPACT Vision, introduced after he assumed office as the 24th President/Chairman of Council in May 2026, with the objective of moving CIBN from identifying industry challenges to developing practical solutions.
Alabi urged participants at the conference to translate their deliberations into concrete measures capable of strengthening the financial system and advancing inclusive economic growth.
CBN Tightens the Noose on Terrorism Financing
CBN stepped up its focus on terrorism financing risks across the financial sector, making it a supervisory priority as it moves to strengthen safeguards against the misuse of the financial system.
The apex bank said its increased supervisory attention would cover how financial institutions identified and managed terrorism financing risks, monitored transactions, implemented targeted financial sanctions, and reported suspicious transactions linked to terrorism financing.
In a statement signed by CBN’s Acting Director, Corporate Communications and Investor Relations Department, Hakama Sidi-Alli, the central bank stated that the move was part of its broader efforts to ensure that banks and other regulated financial institutions maintained effective anti-money laundering, counter-terrorist financing, and counter-proliferation financing controls.
The statement said, “The CBN has elevated terrorism financing supervision to a current supervisory priority, as part of its ongoing commitment to protecting the Nigerian financial system from abuse by illicit actors.
“This supervisory priority covers, at a high level, terrorism financing risk management, terrorism financing transaction monitoring, targeted financial sanctions implementation, and terrorism financing-related suspicious transaction reporting.
“The bank will continue to apply a risk-based supervisory approach, including on-site and off-site engagement, to support effective AML/CFT/CPF controls across the financial sector in line with existing legal and regulatory obligations.”
CBN added that the supervisory priority would support the country’s ongoing cooperation on counter-terrorism financing, counter-proliferation financing, and the broader protection of the financial system.
It stated, “This supervisory focus also supports Nigeria’s ongoing domestic and international cooperation on counter-terrorism financing, counter-proliferation financing, financial integrity, and the protection of the financial system.”
Economic Team Harmonises Key Macroeconomic Assumptions
The Economic Management Team (EMT) approved the establishment of a dedicated inter-agency committee to harmonise the macroeconomic assumptions underpinning government’s budgeting and economic planning.
It also reviewed progress across the economy, agriculture, trade, and investment, manufacturing, and Nigeria’s preparations to host two major continental trade events.
The team, which met in Abuja, approved the setting up of a committee to harmonise macroeconomic assumptions, including crude oil price and production volumes, exchange rate, inflation, and non-oil revenue projections used by fiscal and monetary authorities across government ministries, departments and agencies (MDAs).
The decision followed a joint budget retreat and technical validation workshop, which traced budget under-performance, in part, to inconsistent assumptions used by different agencies, and to occasional divergence between key projections by various authorities responsible for economic policies.
The committee would also work to resolve inconsistencies in how key indicators were reported within government, to external parties and the public.
A statement issued by the Federal Ministry of Finance, the secretariat of EMT, said the team reviewed the state of the economy. It stated that real gross domestic product (GDP) growth reached 4.43 per cent year-on-year in the second quarter of 2026, its strongest quarterly outturn since Q3 2024.
It added, “This translates to about 17 percent growth rate for half-year 2026 in US$ terms. External reserves rose to over $54 billion in early September 2026, the highest level in nearly 18 years according to Central Bank of Nigeria (CBN) data, comfortably above 2026 official projections.
“The naira has strengthened to its firmest levels in about two years, trading in the N1,300s per US dollar range in early September 2026, alongside the reserve build-up.
“FTSE Russell has reclassified Nigeria from ‘Unclassified’ to ‘Frontier Market’ status, effective from the market open on Monday, 21 September 2026 — the country’s return to the index after roughly three years, expected to improve visibility for Nigerian equities among international investors.”
At the meeting, EMT was told public debt remained below 40 per cent of GDP and Nigeria’s sovereign credit outlook by Moody’s had moved from stable to positive.
The team stated that Nigeria’s economy, measured in purchasing-power-parity (PPP) terms at over $2.2 trillion, was substantially larger than its nominal dollar GDP, and indicative of the growth potential of the economy towards the $1 trillion nominal GDP mark by 2030.
The team agreed to a revised Terms of Reference, expanding its remit to include macroeconomic performance review, stronger fiscal–monetary coordination, monitoring of Renewed Hope Agenda priorities, and periodic review of federal government financing needs, alongside a move to a monthly meeting cadence with at least two strategic sector reviews per sitting.
To improve the reliability of official statistics, the Ministry of Finance was designated as the coordinating custodian for national economic data, with line agencies responsible for their respective datasets as inputs into coordinated public releases.
EMT reviewed a strategy to grow agriculture’s contribution toward Nigeria’s $1 trillion economy ambition by 2030, including measures to reduce post-harvest losses, expand processing and mechanisation, strengthen export compliance and improve the timing of capital releases ahead of planting seasons.
The team also reviewed financing measures for the sector, including a planned recapitalisation of the Bank of Agriculture and a new smallholder credit window, alongside a target to raise agriculture’s share of private-sector credit toward 10 per cent by 2030.
It reviewed Nigeria’s readiness to host the Creative Africa Nexus (CANEX) in November 2026 and the Intra-African Trade Fair (IATF) in November 2027 in Lagos, both expected to draw large numbers of exhibitors, international buyers and, for IATF, African heads of state, with organisers projecting substantial trade and investment deal flow.
The Ministry of Finance was tasked with coordinating funding and customs facilitation, working with the Ministry of Industry, Trade and Investment on a consolidated action plan with named ministerial owners.
Speaking on the meeting, Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele said, “Today’s decisions tighten the link between the numbers we plan with and the actual outturns. A single, harmonised set of assumptions across the fiscal and monetary authorities means fewer surprises in the budget and more credible planning for investors and all Nigerians.”
Ndubuisi Francis, James Emejo and Nume Ekeghe
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