Cardoso: CBN Has Taken Decisive Actions to Ensure Safety, Resilience of Banking Sector

Adedayo Akinwale in Abuja

The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, yesterday said that the apex was taking key decisions that would ensure the safety, resilience and soundness of the country’s banking sector.

 He disclosed this in Abuja during an interactive session with the House Committee on Banking Regulations, chaired by Hon. Mohammed el-Rufai.

He also expressed optimism that the proposed banks’ recapitalisation policy would support the country’s $1 trillion economy ambition by the year 2030. Cardoso also revealed that the country’s foreign exchange reserves had grown significantly, with remittance flows currently representing 9.4 per cent of total external reserves.

“One of the key measures includes the recapitalisation of the banking sector by raising the minimum capital base to support the $1 trillion economy envisioned by the Federal Government of Nigeria (FGN) by 2030.

“Banks are required to meet these new thresholds by March 31, 2026, with several options available for reaching these targets. These options include issuing new equities, engaging in mergers and acquisitions, or adjusting their operational licenses.

“The Bank also revoked the licence of Heritage Bank, facilitated the successful merger of Unity Bank and Providus Bank, revised Cybersecurity Rules for Banks and PSPs, suspension of processing fees on cash deposits, and enhanced AML/CFT supervision, amongst others,” the CBN governor stated.

He added that  the reserves rose by 12.74 per cent to $39.12 billion as of October 11, 2024, from $34.70 billion at end-June 2024, driven largely by foreign capital inflows, receipts from crude oil related taxes and third-party.

According to him, In Q2 2024, we maintained a current account surplus and saw remarkable improvements in our trade balance.

Speaking on the macroeconomic performance in 2024, the Cardoso stressed that projections indicated a growth rate of 3.2 per cent and 3.3 per cent for 2024 and 2025 respectively, adding that Nigeria is projected to maintain a more robust 4.3 percent growth rate.

The CBN governor said the non-oil sector maintained strong performance, by contributing 94.30 per cent to Gross Domestic Product (GDP) with a steady 2.80 per cent growth rate; while the oil sector’s growth rate has almost doubled to 10.15 per cent in Q2, 2024 from 5.70 per cent in Q1, 2024, due mainly to improved security surveillance which resulted in increased production of crude oil and natural gas

He noted: “The services sector continues to be the primary economic driver, contributing 58.76 per cent to GDP with a robust growth rate of 3.79 per cent, while the Industrial sector has shown remarkable improvement, with its growth rate surging to 3.53 per cent from 0.31 per cent.”

He pointed out that the contribution of agriculture to total GDP also increased, in addition to the growth rate of the sector rising from a negative territory of -0.90 per cent to 1.41 per cent, indicating a substantial turnaround in productivity.