The Central Bank of Nigeria (CBN) has said the completion of the banking sector recapitalisation exercise marks the beginning of a new phase in which financial institutions must channel their stronger balance sheets towards supporting businesses and productive activities.
CBN Governor, Mr. Olayemi Cardoso, said the focus had shifted from raising capital to ensuring that the additional funds strengthened corporate governance, improved risk management and expanded credit access to sectors capable of driving economic growth.
“With recapitalisation now completed, our focus has shifted towards ensuring that stronger capital translates into improved governance, enhanced risk management and support for productive economic activities,” Cardoso said.
The governor spoke while appearing before the Senate Committee on Banking, Insurance and Other Financial Institutions to present an update on the activities of the apex bank since the beginning of the year.
The meeting marked Cardoso’s first engagement with the committee since his last appearance on December 25. During the open session before lawmakers went into a closed-door meeting, he highlighted major developments in the financial sector, including the launch of the Payments System Vision 2028, improvements in Nigeria’s sovereign credit ratings by Fitch, Moody’s and S&P, stronger coordination between fiscal and monetary authorities, and ongoing reforms aimed at safeguarding financial stability.
Cardoso expressed optimism that inflation would continue to ease in the second half of the year, adding that the CBN would intensify supervision of banks after recapitalisation, deepen foreign exchange reforms, expand digital payment systems and strengthen the overall resilience of the financial system.
He also announced that the apex bank had set a target of raising monthly diaspora remittances through official channels to $1 billion before the end of the year.
According to him, achieving the target would improve foreign exchange inflows, strengthen external reserves and support broader macroeconomic stability.
Inflation Trend, FX Reforms and Economic Stability
The CBN governor told lawmakers that Nigeria’s economy had continued to show resilience despite global challenges, including geopolitical conflicts, trade disruptions and supply chain pressures.
He said the first half of 2026 reflected a consolidation of the gains recorded in 2025, driven by sustained monetary reforms and improved collaboration between fiscal and monetary authorities.
Cardoso noted that inflation had returned to a downward path after a temporary increase linked to the Middle East crisis, declining marginally from 15.93 per cent in May to 15.91 per cent in June.
“This outcome demonstrates the effectiveness of our monetary policy stance in containing second-round inflationary pressures and anchoring inflation expectations. We remain fully committed to restoring price stability and achieving single-digit inflation over the medium term,” he said.
He added that reforms introduced in the foreign exchange market had improved transparency, boosted investor confidence and reduced speculative activities.
Among the measures highlighted were the introduction of the fourth edition of the Foreign Exchange Manual, implementation of the Nigeria Foreign Exchange Code and the deployment of the Electronic Foreign Exchange Matching System.
Cardoso disclosed that the average exchange rate strengthened to N1,375.40 per dollar in the first half of 2026, while official diaspora remittances increased from about $200 million monthly to more than $600 million.
“Our target is to increase diaspora remittances to $1 billion monthly before the end of the year,” he reiterated.
He further revealed that Nigeria’s external reserves had risen to $52.73 billion as of July 9, 2026, reflecting improved foreign exchange inflows and stronger economic buffers.
Banks Raise N4.65trn Under Recapitalisation Exercise
Cardoso described the banking sector recapitalisation programme as one of the most successful exercises in Nigeria’s banking history.
He said commercial banks successfully raised N4.65 trillion in fresh capital, with domestic investors accounting for 72.55 per cent of the funds, while foreign investors contributed 27.45 per cent.
According to him, 33 banks had met the revised capital requirements, while discussions remained ongoing with the few institutions that were yet to fully comply.
He assured lawmakers that the CBN would continue to prioritise depositor protection and the stability of the financial system during the transition period.
Senate Demands More Lending to Businesses, SMEs
The Senate committee, chaired by Senator Mukhail Adetokunbo Abiru (Lagos East), acknowledged improvements in several economic indicators since its previous engagement with the CBN.
Abiru recalled that inflation had moderated to 15.06 per cent in February 2026, prompting the Monetary Policy Committee (MPC) to reduce the Monetary Policy Rate (MPR) from 27 per cent to 26.5 per cent.
However, he noted that inflation later increased to 15.93 per cent in May due to global pressures linked to tensions in the Middle East.
While commending the CBN for restoring stability to the foreign exchange market and completing the banking recapitalisation programme, Abiru stressed that the success of the reform would depend largely on whether banks increased lending to sectors that directly contribute to economic expansion.
He listed agriculture, manufacturing, infrastructure, technology and small and medium-sized enterprises (SMEs) as areas that should benefit from the stronger capital position of banks.
The committee expressed concern over reports that private sector credit growth remained below expectations despite the huge capital injection into commercial banks.
Lawmakers questioned why businesses had not yet experienced a significant increase in access to credit following the recapitalisation exercise.
Lawmakers Probe CBN Accounts, OMO Growth and Ways and Means
The Senate panel also questioned the CBN management on its 2025 audited financial statements, particularly the sharp increase in Open Market Operations (OMO).
Members sought explanations over the rise in outstanding OMO balances from about N24.3 trillion in 2024 to N48.7 trillion in 2025, as well as concerns surrounding liquidity management costs, operational expenses and monetary stability expenditures.
The committee further demanded clarification on the decision to offset Federal Government’s Ways and Means advances against the CBN’s operating surplus instead of making direct cash remittances.
Cardoso, who led the CBN delegation, maintained that recent monetary and financial sector reforms had restored confidence among investors, stabilised the foreign exchange market and created conditions for sustainable economic growth.
He said the apex bank would continue implementing policies aimed at maintaining financial stability while ensuring that the benefits of reforms translate into improved economic opportunities for Nigerians.