E-Financial
Systemically Weak Banks Put Nigeria’s $1Trillion Ambition at Risk
By Blaise Udunze
Nigeria’s banking sector has just undergone one of its most ambitious recapitalisation exercises in two decades, all thanks to the Central Bank of Nigeria under the leadership of Olayemi Cardoso.
About N4.65 trillion ($3.38) has been raised. Balance sheets have been strengthened, at least the improvement could be said to exist in reports or accounting figures.
Regulators have drawn a new line in the sand, proposing N500 billion for international banks, N200 billion for national banks, and N50 billion for regional players. This is a bold reset.
Meanwhile, as the dust settles, an uncomfortable question refuses to go away, which has been in the minds of many asking, “Has Nigeria once again solved yesterday’s problem, while tomorrow’s risks gather quietly ahead?”
At a period when banks globally are being tested against tougher buffers, cross-border shocks, and higher regulatory expectations, Nigeria’s revised benchmarks risk falling short of what the global system demands.
In a world where scale, resilience, and competitiveness define banking credibility, capital is not measured in isolation; it is judged relative to peers, risks, and ambition.
Because when placed side by side with a far more unsettling reality, that a single South African bank, Standard Bank Group, rivals or even exceeds the valuation and asset strength of Nigeria’s entire banking sector, the celebration begins to feel premature.
The recapitalisation may be necessary. But is it sufficient? The numbers are not just striking, they are deeply revealing. Standard Bank Group, with a market valuation hovering around $21-22 billion and assets approaching $190 billion, stands as a continental giant. In contrast, the combined market capitalisation of Nigeria’s listed banks, even after recent capital raises, struggles to match that scale.
The combined value of the 13 listed Nigerian banks reached N16.14 trillion (11.9 billion) using N1.367/$1 in early April 2026, following the recapitalization momentum.
Even more revealing is the contrast at the top. Zenith Bank is valued at N4.7 trillion ($3.44 billion), Guaranty Trust Holding Company, widely admired for efficiency and profitability, is valued at under N4.6 trillion ($3.37 billion), while Access Holdings, despite managing tens of billions in assets, carries a market value below the upper Tier’s N1.4 trillion ($1.02 billion).
This is not merely a gap. It is a structural disconnect. And it raises a critical point, revealing that recapitalisation is not just about meeting regulatory thresholds; it is about closing credibility gaps.
With accounting figures or reports, Nigeria’s new capital thresholds appear formidable. But paper strength is not the same as real strength.
The naira’s persistent depreciation has quietly undermined the meaning of these figures. What looks like N500 billion in nominal terms translates into a much smaller and shrinking figure in dollar terms.
This is the misapprehension at the heart of Nigeria’s banking reform, as we are measuring financial strength in a currency that has been losing strength.
In real terms, some Nigerian banks today may not be significantly stronger than they were years ago, despite meeting much higher nominal thresholds. So while regulators see progress, global investors see vulnerability. Markets are rarely sentimental. They price risk with ruthless clarity.
The valuation gap between Nigerian banks and their South African counterparts is not an accident; it must be made known that it is strategic intentionality. By this, it truly reflects a deeper judgment about currency stability, regulatory predictability, governance standards, and long-term growth prospects. Investors are not just asking how much capital Nigerian banks have. They are asking how durable that capital is.
Even when Nigerian banks post strong profits, much of it has been driven by foreign exchange revaluation gains rather than core lending or operational efficiency. The CBN’s decision to restrict dividend payments from such gains is telling; it acknowledges that not all profits are created equal. True strength lies not in accounting gains, but in economic impact.
Nigeria has travelled this road before. Under Charles Soludo, the 2004-2006 banking consolidation raised minimum capital from N2 billion to N25 billion, reducing the number of banks dramatically and producing industry champions like Zenith Bank and United Bank for Africa. For a time, Nigerian banks expanded across Africa and became formidable competitors.
But the momentum did not last, emanating with lots of economic headwinds. One amongst all that played out was that the global financial crisis exposed weaknesses in governance and risk management, leading to another wave of reforms under Sanusi Lamido Sanusi. The lesson from that era remains clear, which revealed that capital reforms can stabilise a system, but they do not automatically transform it. Without bigger structural changes, the gains fade.
The real weakness of Nigeria’s current approach is not the size of the thresholds; it is their rigidity. Fixed capital requirements do not adjust for inflation, reflect currency depreciation, scale with systemic risk, or capture the complexity of modern banking.
In contrast, global regulatory frameworks are increasingly dynamic and risk-based. This is where Nigeria risks falling behind again. Because while the numbers have changed, the philosophy has not.
Nigeria’s economic aspirations are bold. The country speaks confidently about building a $1 trillion economy, expanding infrastructure, and driving industrialization, but in dollar terms, many Nigerian banks remain small, too small for the scale of ambition the country now proclaims. Albeit, it must be understood that ambition alone does not finance growth. Banks do.
And here lies the uncomfortable mismatch, which is contradictory in nature because the economy Nigeria wants to build is significantly larger than the banks it currently has.
In South Africa, what Nigerian stakeholders are yet to understand is that large, well-capitalised banks play a central role in financing infrastructure, corporate expansion, and consumer credit. Their scale allows them to absorb risk and deploy capital at levels Nigerian banks struggle to match. Without comparable financial depth, Nigeria’s development ambitions risk being constrained by its own banking system.
At its core, banking is about channeling capital into productive sectors, as this stands as one of its responsibilities if it truly wants to ever catch up to a $1 trillion economy. Yet Nigerian banks have increasingly, in their usual ways, leaned toward safer, short-term returns, particularly government securities. This is not irrational. It is a response to high credit risk, regulatory uncertainty, and macroeconomic instability.
But it comes at a cost. Yes! The fact is that when banks prioritise safety over lending, the real economy suffers. What this tells us is that manufacturing, agriculture, and small businesses remain underfunded, limiting growth and job creation.
Recapitalisation is meant to change this dynamic. Stronger capital buffers should enable banks to take on more risk and finance larger projects. But capital alone will not solve the problem. Confidence will.
One of the most persistent obstacles facing Nigerian banks is currency volatility. Each major devaluation of the naira erodes investor returns and reduces the dollar value of bank capital. This creates a contradiction whereby banks appear profitable in naira terms, but unattractive in global markets.
In contrast, South Africa benefits from a more stable currency environment and deeper capital markets. Without much ado, it is clear that this stability attracts long-term institutional investors that Nigeria struggles to retain. Until this macroeconomic challenge is addressed, recapitalisation alone cannot close the gap because without making it a priority, even the strongest banks will remain constrained.
In a global competitive financial market, one would agree that capital is necessary, but not sufficient. Beyond the capital, one crucial lesson stakeholders in Nigeria’s banking space must understand is that investors’ confidence is heavily influenced by governance standards and operational efficiency, which mainly guarantee more success and capability. Also, another relevant trait to sustainable banking is transparency, regulatory consistency, and accountability, which matter as much as balance sheet strength.
While Nigerian banks have made progress, lingering concerns remain around insider lending, regulatory unpredictability, and complex ownership structures. If policymakers revisit and reflect on the episodes involving institutions like First Bank of Nigeria and the liquidation of Heritage Bank, this will reinforce the perceptions of systemic risk.
Recapitalisation offers an opportunity to reset governance standards, but only if it is accompanied by stricter enforcement and greater transparency, with the key stakeholders seeing beyond the capital growth.
As if traditional challenges were not enough, Nigerian banks are also facing increasing competition from fintech companies. Nigeria has emerged as a leading fintech hub in Africa, reshaping payments, lending, and digital banking.
To remain relevant, banks must invest heavily in technology, an area that requires not just capital, but smart capital, ensuring that digital innovation becomes a core strength rather than an external add-on. The recapitalisation exercise provides the financial capacity. Whether banks use it effectively is another matter entirely.
So, are Nigeria’s new capital thresholds already outdated? Not yet. But they are already under pressure, pressure from inflation, currency weakness, global competition, and Nigeria’s own economic ambitions.
The truth is that the reforms are a step in the right direction, but they may already be systemically weak in the face of global realities. Whilst the actors keep focusing heavily on capital thresholds without addressing deeper structural issues, the reforms risk creating a system that is compliant, but not competitive, stable but not strong.
The recapitalisation exercise has bought Nigeria time. That is its greatest achievement. But time is only valuable if it is used wisely.
If policymakers treat this reform as a destination, the thresholds will age faster than expected. If they treat it as a foundation, Nigeria has a chance to build a banking system capable of supporting its ambitions.
It can either strengthen its financial foundations to match its economic ambitions or continue to pursue growth on a fragile base.
The warning signs are already visible. Systemic weaknesses, if left unaddressed, will not remain contained; they will surface at the worst possible moment, undermining confidence and limiting progress.
Otherwise, the uncomfortable truth will persist; one well-capitalised bank elsewhere will continue to stand taller than an entire banking system at home. Whilst a $1 trillion economy cannot be built on a weak banking system. The sooner this reality is acknowledged, the better Nigeria’s chances of turning ambition into achievement.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
Securities and Exchange Commission (SEC) has banned the marketing and promotion of a purported initial public offering (IPO) by Dangote Petroleum Refinery & Petrochemicals FZE,.
It further warned that no application for such offer has been filed with or approved by the regulator.
In a public notice issued on Tuesday, the Commission said it had become aware of advertisements, flyers, digital banners and targeted electronic mails circulating on social media platforms and investment channels concerning a supposed securities offering by the refinery.
The SEC expressed concern over the involvement of some Registered Capital Market Operators (CMOs) in what it described as an “unwholesome and manipulative exercise” of actively soliciting advance subscriptions for an offering that has not been presented to the Commission.
According to the regulator, “No application for the registration of an IPO or public offer of shares of the Refinery has been filed with or approved by the Commission.”
The Commission added that the ongoing pre-marketing activities were “capable of misleading investors, distorting market expectations, creating information asymmetry and generally undermining the integrity of the capital market.”
It further stated that the marketing campaign and invitations to “create accounts”, “pre-fund,” or “secure guaranteed allocations” amounted to market manipulation and constituted “serious violation of the Investments and Securities Act.”
Consequently, the Commission directed all Registered Capital Market Operators, particularly stockbrokers and digital platform promoters, to immediately stop all promotional activities.
The SEC ordered them to “cease with immediate effect from publishing, reposting, or distributing any promotional material, flyer, or commentary relating to the acquisition or allocation of shares in the Refinery.”
It also directed operators to “remove or take down all such unauthorized marketing materials from websites, social media handles (including X, LinkedIn, Instagram, Facebook etc.), and messaging groups within twenty-four (24) hours of this notice.”
The regulator further instructed operators to desist from accepting deposits, commitments, account openings or expressions of interest from investors for the purported public offering and to “reverse and refund all funds already collected in connection with this purported offering to clients within twenty-four (24) hours of this notice.”
The Commission warned that defaulters would face sanctions as non-compliance would attract penalties under the Investments and Securities Act, 2025 and the SEC Rules and Regulations.
Advising investors to exercise caution, the SEC said members of the public should “rely only on formal, official pronouncements issued directly by the Commission through its official channels.”
It warned that “all such high-pressure marketing tactics, or transfer of funds to any operator for ‘pre-IPO’ placement should be ignored as they did not receive the Commission’s approval.”
The Commission assured that if it eventually receives and clears an application for a public offering by the refinery, an approved prospectus would be made available to investors in line with the provisions of the Investments and Securities Act, 2025.
Fidelity Bank Plc has reaffirmed its commitment to supporting Nigeria’s economic diversification agenda through capacity building and export development, as it hosted the 19th edition of its Export Management Programme (EMP) at the Lagos Business School (LBS), Ajah, Lagos recently.
L-R: Relationship Manager, Fidelity Bank Plc, Murtala Muhammed Road Branch, Kano, Victor Ngwu; Export Management Programme (EMP 19) participant, Abayomi Adewuyi; Facilitator, Gemma Ejiofor; Senior Fellow and Head, Department of Organisational Behaviour and Human Resources Mgt., Lagos Business School (LBS), Dr. Uche Attoh; Director, Export Management Programme, LBS, Prof. Frank Ojadi; and Team Lead, Export & Agriculture, Fidelity Bank Plc, Emmanuel Nwalor, during the closing ceremony of the 19th edition of the Fidelity Bank Export Management Programme (EMP 19) held recently at Lagos Business School, Lagos.
Tagged EMP 19, the programme is an intense hands-on export management workshop, organized as a partnership between Fidelity Bank, Lagos Business School and Nigerian Export Promotion Council, brought together entrepreneurs, professionals, regulators and aspiring exporters for intensive training designed to equip participants with the knowledge, skills and networks required to compete successfully in international markets.
Speaking at the closing ceremony, Divisional Head, Export and Agriculture, Fidelity Bank Plc, Isaiah Ndukwe, said the bank remains focused on empowering Nigerian businesses to leverage emerging opportunities under the African Continental Free Trade Area (AfCFTA) and expand the country’s non-oil export base.
“At Fidelity Bank, we recognize that capacity building is critical to unlocking Nigeria’s export potential. Through the Export Management Programme, we are equipping businesses with practical knowledge, market intelligence and strategic insights required to compete successfully in regional and global markets,” Ndukwe said.
“As AfCFTA continues to open new frontiers for trade across Africa, our goal is to ensure that Nigerian exporters are adequately prepared to seize these opportunities and contribute meaningfully to the country’s economic diversification agenda,” he added.
Nwalor further noted that the bank remains committed to providing exporters with the financial solutions, advisory support and strategic partnerships necessary to expand their businesses beyond Nigeria’s borders.
Also speaking, Director of the Export Management Programme at Lagos Business School, Professor Frank Ojadi, highlighted the need for continuous capacity development as international trade continues to evolve.
“The export market is always evolving. There are changes in policies, improvements in processes and increasing interest from businesses. These developments make it necessary to build the capabilities of our people to compete effectively in export markets,” Ojadi said.
According to him, this year’s programme placed significant emphasis on AfCFTA, exposing participants to both the fundamentals and practical aspects of leveraging the continental trade agreement for business growth.
“Many businesses are still learning how to take advantage of AfCFTA. Through this programme, participants gained practical insights that will help them navigate opportunities across African markets and beyond,” he added.
In his remarks, Senior Fellow and Head of the Department of Organisational Behaviour and Human Resources Management at Lagos Business School, Dr. Uche Attoh, emphasized the importance of negotiation and dispute resolution skills in international trade.
“It is negotiation that enables businesses to establish deals, while arbitration helps resolve disputes when they arise. Once participants understand the principles, they can apply them in any business environment, whether in Africa, Europe or America,” Attoh said.
Participants described the programme as impactful and transformative. Assistant Director at the Nigerian Shippers’ Council, Obinna Oforum, said the training strengthened his resolve to become an “export champion”.
Similarly, Chief Superintendent of Customs, Orji Samuel, praised Fidelity Bank and Lagos Business School for subsidizing the programme and creating an enabling platform for practical learning, noting that the knowledge gained would help participants navigate export challenges and unlock new business opportunities.
The Export Management Programme is Fidelity Bank’s flagship capacity-building initiative aimed at developing export-ready businesses and professionals capable of driving Nigeria’s non-oil export growth. Through strategic partnerships and targeted interventions, the Bank continues to play a leading role in supporting businesses, facilitating trade and creating pathways for sustainable economic development.
Ranked among the best banks in Nigeria, Fidelity Bank Plc is a full-fledged Commercial Deposit Money Bank serving more than 10 million customers through digital banking channels, its 255 business offices in Nigeria and United Kingdom subsidiary, FidBank UK Limited.
The Bank is a recipient of multiple local and international awards, including the 2025 Development Bank of Nigeria (DBN) Innovation Award for MSME support; Best Retail and SME Bank Award from Independent Newspapers; Best Bank for Export & Trade Finance and Most Innovative Bank of the Year at the 2025 BusinessDay Banks and Financial Institutions (BAFI) Awards; and Nigeria’s Best Private Bank at the 2025 Euromoney Awards. The Bank also received the inaugural Most Improved Commercial Bank of the Year award by Nairametrics, the SME Bank of the Year award by NewsDirect, and the Straight-Through Processing (STP) Excellence Award by Citi Group, in addition to recognition by Global Brands Magazine for Excellence in Community Empowerment.
Federal government has engaged the banking community in Abuja to deepen understanding of the Revenue Optimisation Assurance Platform (RevOp), a digital platform designed to improve revenue generation, reduce leakages, and enhance public sector accountability.
Mr Taiwo Oyedele, minister of Finance and coordinating minister of the Economy, told RevOp sensitisation workshop, organised by the Office of the Accountant General of the Federation (OAGF) in Abuja, that RevOp is a centralised digital revenue collection and monitoring system designed to modernise Nigeria’s public finance operations.
Oyedele, who was represented by Mr Mohammed Danjuma, permanent secretary, Special Duties, explained that the platform provides a real-time, automated framework for all federal agencies to raise, collect, and report revenues, replacing fragmented manual processes that have plagued revenue collection for decades.
He reiterated the government’s commitment to improving revenue generation, enhancing transparency, strengthening accountability, and leveraging technology to drive efficiency across public financial management processes.
“RevOp serves as a critical tool in the government’s drive to improve revenue administration, reduce leakages, and enhance public sector accountability,” he said.
According to him, a lot had been achieved since the inception and implementation of the platform and that the successes were not without challenges.
He identified one of the challenges as limited awareness among some banking channels and frontline officers.
The minister explained that some banking channels are not familiar with RevOp, its purpose, or the procedural requirements to support transaction processes through the platform.
“These challenges, though operational in nature, have significant impacts on the overall customer experience and effectiveness of the initiative. This is precisely why we are here today,” he said.
The minister said that the success of RevOp would not be achieved by government alone, adding that it required strong collaboration among all stakeholders, particularly banking institutions, which serve as critical collection and service channels.
He explained that the banking institutions’ role extends beyond merely collecting or processing payments to ensuring that government revenue collection processes are efficient and user-friendly.
“Today’s sensitisation session has, therefore, been organised to deepen understanding of the platform, clarify operational processes, address concerns, and establish stronger communication channels between the project team and participating financial institutions.
“We expect that the knowledge shared here will cascade throughout your respective organisations, especially to branch operations, customer service personnel, and tellers who interact directly with customers on a daily basis,” he said.
Oyedele said the ministry remained committed to working closely with all stakeholders to address identified challenges and continuously improve the platform.
In his speech, Dr. Shamseldeen Ogunjimi, accountant general of the Federation, said that the revenue optimisation portal had been adopted as a strategic platform for improving revenue collection, reconciliation, monitoring, and reporting.
Ogunjimi, represented by Mr Felix Ogundairo, his chief of staff, explained that the platform was designed to provide greater visibility into government revenue, eliminate leakages, improve compliance, and support informed decision-making through real-time data and analytics.
“This engagement, therefore, provides an opportunity for us to discuss implementation challenges, align expectations, clarify operational issues, and strengthen the partnership necessary for the success of the application,” he said.
In his remarks, Mr. Idris Dosunmu, RevOp Product Manager, explained that the platform unifies billing, payment and settlement under one platform and that every transaction passes through secure connections, ensuring complete transparency from bill creation to treasury receipt.
“This will ensure that every penny due to the federal government goes into the coffers of the government,” Dosunmu said.
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