Feature/OPED
Africa’s Economic Development: Exploring Geopolitical Complexities and Contradictions
By Kestér Kenn Klomegâh
Within the context of rapid geopolitical changes and the Russia-Ukraine crisis, African leaders have to rethink and take strategies to save their straddling economy. Both situations have created increasing problems across the world. The underlying causes are well-known and therefore allowing its possible effects to largely influence the already-stressed economic development processes will spell disaster and tragedy for Africa and its 1.4 billion population.
Several years have elapsed after the United Nations declared Africa’s political independence. Archival records show that Russia not only supported African countries in liberating themselves from the yoke of colonialism and attaining political independence but also facilitated the UN General Assembly adopting in 1960 the Declaration on the Granting of Independence to Colonial Countries and Peoples. It was precisely May 25, now more than 60 years ago, but still, Africa is far away from attaining its economic freedom despite the huge natural and human resources there. The resources are untapped, development remains shabby and about 60% of the population is impoverished.
Some say leadership attitudes and approaches are holding back development in Africa, while others blame external factors including the opaque relations adopted by foreign players. Without an effort to negotiate and identify development priorities, without an effort to cut off self-centred attitudes, we will be prolonging our economic development and growth for another century. If we attribute our under-development to imperialism and colonialism, why not then primarily blame African leaders, their executive cabinets and the legislative organs? Does Africa need these weak public institutions civil society, and leaders with obsolete and parochial ways of managing our economy?
At this stage of Africa’s development, is it necessary to examine thoroughly how the geopolitical changes are influencing Africa’s unity and development? How it is impacting on African countries across the continent. In practical terms, the time has arrived to look at the development processes and review obstacles, control and monitor the participation of foreign players and now think of our role in the emerging new world order, as well as the implications for Africa.
On the other hand, many external players are swiftly dividing Africa and its desire for sustaining unity that has already been attained these several years by using anti-Western slogans and rhetoric, using political confrontation and consistently urging African countries to employ hatred for some foreign entities’ participation in Africa’s economy. There are glaring indications that Africa is sharply divided, and diverse conflicts are taking a heavy toll on developments there.
African Union simply lacks a unified approach to the continent’s development. Strengthening African unity has long been a sought-after goal that has never been fully achieved. As the need for regional integration and the reasons for past failures become better understood, new efforts are being made to hold economic and political ties between countries. To foster an integrated development, regional organizations have been created in different parts of Africa. But on the whole, they have done little to improve developments in their respective regions. In many cases, African leaders continue to have the most extensive bilateral relationships with their former colonial powers. In the opposite direction, Russia and China are critical of Western and European connections to Africa. At least, China has given appreciably huge support, especially in upgrading infrastructure. Russia has now embarked on fighting “neo-colonialism” which it considers a barrier on its way to regain part of Soviet-era influence in Africa.
In terms of working with Africa, Foreign Ministry Spokeswoman Maria Zakharova, during her weekly media briefing on March 23, indicated that African countries need to consolidate their political independence and sovereignty while overcoming acute socioeconomic issues and development. She expressed appreciation and respect for the sovereign equality of states and non-interference in their internal affairs. But on the other side, lashed at the aggressive policies of the United States, and its approach towards Africa. She also blamed African leaders for their inability to employ “common sense” in their interests and, most importantly, within the principles of the supremacy of international law, especially in the current geopolitical changes rapidly shifting from the unipolar system to a multipolar world order.
She said: “Russia’s active work on the African track is a significant part of the entire scope of measures to develop constructive cooperation with a great number of countries that pursue an open and balanced foreign policy guided by common sense and their interests and, most importantly, within the principles of the supremacy of international law and indivisible security with the central and coordinating role of the United Nations.”
According to her explanation, Russia advocates for a more equitable and democratic international order that will promote reliable security, the preservation of unique cultural-civilizational identity and equal opportunities for the development of all states. This can only be guaranteed within the framework of a multipolar system of international relations and cooperation based on a balance of interests of the developing world. In a nutshell, Africa’s future has to be in line with this overall global development.
Due to its Western and European dreams which it has pursued for the past three decades following the collapse of the Soviet era, Russia is shifting while charting a multipolar configuration and now moving to Africa. It is consistently expressing the desire to fight growing neo-colonial tendencies, obviously the most difficult task reminiscent of the Cold War times, in the continent to win support and sympathy from African leaders and among the 1.4 billion people, while Russia has invested little in the development of infrastructures, in the industrial sector and other employment-generating sectors across Africa.
In the context of development processes, African leaders are aware of the necessity to prevent the revival of neo-colonialism, the destructive attitude towards resources. The fight against neo-colonial tendencies should remain exclusively a challenging task for African leaders, the regional organizations and the African Union. Russia should focus on what it could concretely do in the various economic sectors rather than continue accusing the United States and Europe of the under-development, economic obstacles and political problems across Africa. Experts say African leaders, with the political mandates from their electorates, should take sole responsibility for African problems and find African solutions within their professional skills and competencies.
It implies that Russia is under-rating, and downgrading African leaders and their development policies for allowing the growth of neo-colonialism. By advising African leaders on what political direction is necessary to adopt, Russia is directly interfering in the internal politics of Africa. In practical terms, African leaders are answerable to their electorate, and the electorates have the duty of making objective assessments of their governments’ performance. It is widely acknowledged that state institutions are weak, and most high-level decisions relating to mega-projects first have to be discussed by parliament or get the necessary approval from the cabinet. The system of checks and balances is still questionable in many African countries.
Some experts say the world needs cooperation rather than fragmentation. Cooperation rather than confrontation is the basis for the emerging multipolar world. For instance, Ivan Timofeev, Russian International Affairs Council’s Director of Programs and also Head of the “Contemporary State” program at Valdai Discussion Club, writing under the headline “Can Russia Really Break Away from the West?” argued that long before relations between Russia and the West spiralled into a comprehensive political crisis, Russian leadership and officials were enthusiastically voicing ideas about developing ties with the rest of the world.
After the Soviet collapse, especially in the 1990s, former Foreign Minister Evgeny Primakov pursued most activities within the framework of a multi-vector foreign policy. The gradual growth of contradictions with the West accelerated the formation of ‘pivot to the East’ ideas, although their implementation was slow. However, the current crisis in relations between Russia and the West, for all its appearances, is irreversible and has driven an increase in the number and quality of ties with countries which are outside the control of the United States. Nevertheless, Russia itself is unlikely to be able to cement and consolidate them alone. However, it exemplifies the very possibility of challenging the political West on fundamental issues. Not everyone is ready to follow the same path, but the very fact of its presence is an event which has a global dimension.
The task is to create reliable opportunities for modernisation through interaction with the non-Western world. Here, success is far from guaranteed. The ‘world majority’ is closely embedded in Western-centric globalization, although the existing system has its problems. Russia’s links with its Western neighbours have been accumulating for centuries. Even such a powerful crisis like today’s cannot cut them overnight. Within the West itself, there is both an ideological and a purely material stratification. Behind the facade of general political slogans lies an extremely heterogeneous political and mental space.
According to Ivan Timofeev, it is necessary to take into account the fact that the countries of the world majority which are friendly to Russia, still have their national interests. They are unlikely to sacrifice them simply for the sake of friendship with Russia. Many non-Western countries maintain close relations with the West. A considerable number of them still benefit from Western-centric globalization. Moreover, many use a modernising process according to the Western model, preserving their cultural identity, and if possible, political sovereignty, but do not hesitate to use Western standards in the fields of economics, production, management, education, science, technology, et cetera. Rather, Russia will have to engage with a variety of cultures and ways of life.
Last year, I attempted to have an insightful understanding of the geopolitical changes, the emerging multipolar configuration and its implications for Africa. Whether it mean Africa has to break away from the United States and Europe? During the discussions with Dr Mohamed Chtatou, an experienced professor of Middle Eastern politics at the International University of Rabat (IUR) and Mohammed V University in Rabat, Morocco, told me how Africa can develop itself away from the greed of some developed nations and still maintain contacts with them. He clearly underscored the system of approach, noting further that there is no easy answer to this question, as it is a complex issue that involves many different factors. However, there are some steps that Africa can take to promote sustainable development and reduce the influence of developed nations.
Here are a few of the steps Dr. Mohamed Chtatou suggested:
Promote good governance: African nations should work to establish transparent and accountable systems of governance that promote the rule of law, protect human rights, and combat corruption.
Invest in education and human capital: Developing the skills and knowledge of the African people is crucial to building a sustainable and prosperous future for the continent. Investing in education, health care, and other social services can help to build a strong and healthy workforce.
Support local industries: African nations can promote economic development by investing in local industries, rather than relying solely on exports of raw materials. This can create jobs, generate income, and promote sustainable growth.
Foster regional integration: African nations can work together to promote regional integration and reduce dependency on external actors. This can involve developing common trade policies, investing in regional infrastructure, and promoting cooperation on issues of mutual interest.
Encourage foreign investment on African terms: African nations should strive to attract foreign investment on their terms, by negotiating fair and equitable deals that benefit both the investor and the host country. This can help to promote economic development and reduce dependency on aid.
Given its abundant resources, its ambitious youth, its vibrant society, and its geo-strategic potential, Africa needs to achieve unity and full integration, at once, to face the immense greed of the developed world and to defend its interests in the best possible ways.
Dr. Mohamed Chtatou further discussed the question of increasingly growing neo-colonialism and related tendencies in Africa. The term neo-colonialism first became widespread, particularly in Africa, shortly after the decolonization process following the end of World War II, which came after the struggle of several national independence movements in the colonies. Colonialism is a policy of occupation and economic, political or social exploitation of a territory by a foreign state. Neo-colonialism refers to a situation of dependence of one state on another. This dependence is not official, as is the case between a colony and a metropolis.
The brutal exploitation of the populations as well as the appropriation of the resources of the continent by the countries of the North are at issue. This is what justifies that today, France and other Western countries are implementing actions, notably by helping the development that colonization had slowed down. Neo-colonialism in Africa refers to the indirect and continued domination of African countries by former colonial powers, or by other external powers, through economic, political, and cultural means.
Some aspects of neo-colonialism in Africa include:
Economic exploitation: African countries are often forced to rely on exports of raw materials, while importing manufactured goods at higher prices, leading to a one-sided economic relationship.
Political interference: External powers often interfere in the political affairs of African countries, supporting leaders who are favourable to their interests, and opposing those who are not.
Cultural domination: The cultural influence of former colonial powers can still be felt in Africa, as Western cultural values and norms are often seen as superior to traditional African values.
Debt dependency: Many African countries are burdened by debt, which often originated from loans given by external powers. These debts can lead to dependency and compromise their sovereignty.
Land and resource grabbing: External powers or corporations often acquire large amounts of land or resources in African countries, displacing local populations and leading to environmental degradation.
There may be some contradictions and complexities when discussing and analysing Africa within the context of geopolitical changes. In terms of business, the United States and Europe stand as the traditional markets for Africa’s exports, earn significant revenues from these markets, and therefore difficult to abandon overnight. Most of the European capitals and the cities in the United States are popular holiday destinations for the African elites and the middle-class and business people. The diaspora is closely knitted by family culture. These are the essential features that unite them. The relationships were distinctively different during the political independence struggle, and now much relates to the economy.
In most cases, it is further argued that Africans speak most European languages, and more or less understand the Western and European culture, with all the diversity of the West. This is one greatest ultimate advantages of preserving their cultural identity, and if possible, political sovereignty. It simply facilitates establishing and maintaining ties with friendly ties with Western and European countries.
The design for an alternative has to significantly address development concerns and the population’s living standards, these are the primary tasks of African leaders. Africans are making fundamental decisions in the areas of economic development, thus external players with investment capital and entrepreneurial partnership are likely able to cement and consolidate their desires for a strong society in the global dimension. These have to be located within the frame of the African Union concept.
In other words, the African Union is far from its objectives and, contrary to its reference model, is not prospering. This sad fact raises several questions, both about African integration and about the legitimacy and usefulness of the African Union. The topic seems all the more relevant as African nations see regional integration as an important opportunity to introduce political stability and increase trade. In this regard, Kwame Nkrumah, the first president of Ghana and one of the founding fathers of African unity said: “There can be no real independence and economic independence and true economic, social, political and cultural development of Africa without the unification of the continent”. But how should this unification take place? Is the African Union, based on the European Union model the only solution for Africa? Is it capable of curing Africa of all its ills? What if regional integration under the European model is not adapted to Africa?
Most African experts believe that for Africa global stability is a necessary factor for growth, but it must first take control over its growth agenda. Of course, Africa has to forge an intra-African trade and investment, modern agriculture and focus on industrialising as the basis for the newly created single market. As Jakkie Cilliers, Head, African Futures and Innovation, ISS Pretoria, in April 2023 argued “the continent will suffer if current efforts to instrumentalize Africans in this divided world continue.”
In his view, especially at this new stage, “Africa needs debt relief, Chinese trade and investment, expanded relations with the EU, capital from the US and more trade with the rest of the global south. It needs an agricultural revolution to ensure food security and accelerate trade integration to provide a larger, more attractive domestic and foreign capital market. Fully implementing the African Continental Free Trade Area agreement can unlock more rapid growth than any other scenario.” Meanwhile, as the elephants fight, the grass suffers, according to Jakkie Cilliers, Head of African Futures and Innovation at the Institute of Security Studies, Pretoria in South Africa.
Feature/OPED
Navigating Nigeria’s $1 Trillion Roadmap: Growth Indexes and PR Intelligence That Define Success in 2026
By Nosa Iyamu
As we navigate the threshold of 2026, the Nigerian economic landscape is finally shedding the “survivalist” skin that defined the previous two years. The data from 2025 paints a compelling picture of a nation pivoting toward stability. Headline inflation, which sat at a staggering 34.8% in December 2024, underwent a significant decline through 2025, cooling to 14.45% by November. This disinflationary trend, paired with economic reforms such as the Nigerian Electricity Regulatory Commission’s (NERC) aggressive reforms and strategic shifts in the Oil and Gas sector, has effectively reopened the floodgates for Foreign Direct Investment (FDI). The narrative has shifted from a desperate scramble for survival to a strategic quest for sustainability. Investors who were once hesitant are now looking at Nigeria not as a volatility risk, but as a market undergoing profound structural re-engineering. This transition is marked by a renewed focus on transparency and a commitment to market-driven policies that reward institutional resilience and long-term planning.
Building on the stability achieved last year, 2026 is projected to be a period of “Growth Consolidation.” With GDP expansion forecasted between 4.1% and 4.2% and headline inflation expected to settle into a manageable range of 12.5% to 20%, the mandate for brands should shift. It is no longer about merely surviving the storm of volatility; it is about scaling within high-impact corridors that have been cleared by these macroeconomic reforms. Strategic opportunities are ripening in four key sectors: Energy, driven by the Electricity Act 2023 and NERC’s cost-reflective market reforms; Healthcare, anchored by the landmark $5.1B Bilateral MOU between the U.S. and Nigeria; Financial Services, fueled by post-recapitalization lending power; and the Digital Economy, accelerated by the 5G rollout and the maturity of social commerce. Brands playing in these spaces and other industries must recognize that the consumer of 2026 is more discerning, having been refined by the economic hardships of the past, and will only reward businesses that offer clear value and authentic connection.
Perhaps the most pivotal anchor for 2026 is that $2 billion bilateral health Memorandum of Understanding (MOU) signed between the U.S. and Nigeria. This five-year agreement, which began its full implementation cycle in early 2026, is far more than a healthcare play; it is a massive economic stimulus and a resounding vote of global confidence in Nigeria’s institutional reforms. It signals that Nigeria is ready for high-level international cooperation and that the groundwork for a stable, productive economy is being laid. As we march toward the ambitious goal of a $1 trillion economy by 2030, visibility is no longer the endgame for any serious brand. To survive and thrive during this transition from subsistence to high productivity, brands must be deeply understood. It is about moving from the “top of mind” awareness to “top of heart” resonance, where the brand’s purpose aligns with the aspirations of a nation on the move.
In the fast-evolving communications landscape of 2026, visibility has become a cheap commodity, but clarity is a premium asset. The Public Relations industry has officially entered the era of Narrative Intelligence. Traditional Search Engine Optimization (SEO) is being rapidly superseded by Generative Engine Optimization (GEO). As consumers increasingly rely on AI agents and large language models (LLMs) rather than scrolling through pages of search results, brands must ensure they aren’t just “present” on the web—they must be cited as authoritative, credible voices by AI models. This requires a shift from keyword stuffing to high-context storytelling and data-backed authority. If an AI agent cannot summarize your brand’s value proposition accurately in two sentences, you are effectively invisible to the next generation of digital consumers. Narrative Intelligence is about ensuring your brand’s story is coherent, consistent, and machine-readable across all digital touchpoints.
However, this AI-driven world brings a darker side – the proliferation of Deepfakes and hyper-realistic misinformation. As the 2027 political cycle begins to warm up in late 2026, the Nigerian digital space could become a minefield of synthetic media designed to manipulate public opinion. For brands, this represents a significant reputational risk. PR professionals must now act as “Narrative Bodyguards,” deploying advanced AI detection tools to monitor, detect, and neutralize synthetic media before it erodes brand equity. Authenticity is no longer a buzzword or a marketing slogan; it is a defensive necessity. Brands must lean into “Responsible Communication,” ensuring that every piece of content is verifiable and that their response mechanisms for crisis management are faster than the speed of a viral deepfake. Trust, once lost in this high-speed environment, is nearly impossible to regain.
The era of the “Press Release for the sake of it” is officially dead. In 2026, Nigerian boardrooms are demanding a direct, quantifiable line between PR activity and business impact. This marks the definitive death of vanity metrics. Success is no longer measured by the thickness of a press clipping file or the number of generic “likes” on a social media post. Instead, we are seeing a shift from volume to impact, where the primary KPIs are how a campaign drives customer acquisition, increases investor interest, or improves employee retention. Measurement has shifted focus to quality over quantity; it is about the sentiment of the conversation and the conversion rate of the audience. If your PR strategy does not move the needle on the set measurable objectives, it is considered mere noise. PR is now a performance-driven discipline, integrated deeply into the sales and growth funnels of the modern Nigerian enterprise.
The age of the N100 million celebrity brand ambassador is also rapidly fading. Battle-hardened by years of economic shifts and broken promises, Nigerian consumers are increasingly skeptical of high-gloss, low-substance celebrity endorsements. In 2025, the Creator Economy has professionalized and matured. We will see the ascendancy of Niche Creators—the personal finance expert on TikTok, the sustainable farmer on YouTube, or the tech-policy analyst on Instagram. These voices offer what traditional celebrities cannot: community, deep credibility, and a mastery of their craft. Brands in 2026 will pivot toward long-term “Responsible Communication” partnerships with these creators who speak the hyper-local language of their audience. The “next big creator” is no longer a movie star; they are a subject matter expert with a loyal, high-intent community that values authentic insight over superficial fame.
While we must continue to support and prioritize independent media platforms to maintain democratic health, the reality is that traditional newsrooms continue to shrink under the weight of digital disruption. In response, savvy brands are increasingly becoming their own media houses. “Owned Media”—newsletters, podcasts, proprietary research reports, and custom-built community platforms—is the new frontier for brand storytelling. By owning the platform, brands can ensure their story is not diluted or lost in the noise of a fragmented media landscape. This allows for Direct Empathy, speaking to the consumer’s daily reality without a third-party filter. It provides Narrative Control, which is essential in an era of deepfakes, and grants Data Ownership, allowing brands to deeply understand who is engaging with their story and why. Owned media is the bridge that moves a brand from being seen to being truly understood and must be a strategy for 2026.
The 2026 landscape is a high-stakes arena of immense complexity and opportunity. With the active involvement of global powers like China, Russia, and the USA in trade and commerce, and a renewed national commitment to fighting insecurity to protect the $1 trillion goal, Nigeria is a land of profound transformation. But for a brand to capture this opportunity, it must move beyond the surface-level metrics of the past. Brands must empathize through genuine partnerships, drive cross-sector collaboration, and tell stories that resonate with the Nigerian spirit of resilience. The verdict for the year is clear: Trust is the new currency. In a world of AI-generated noise and economic restructuring, the brands that win will be those that have spent the time to build a foundation of understanding. The mandate for 2026 is simple: Don’t just show up. Ensure your audience knows exactly who you are, what you stand for, and why you are essential to their future.
Nosa Iyamu is the CEO of IVI PR
By Isah Kamisu Madachi
For over a week now, flipping through the pages of Nigerian newspapers, social media, and other media platforms, the dominant issue trending nationwide has been the discovery of significant discrepancies between the gazetted version of the tax laws made available to the public and what was actually passed by the Nigerian legislature.
Since this shocking discovery by a member of the House of Representatives, opinions from tax experts, public affairs analysts, activists, civil society organisations, opposition politicians, and professional bodies have been pouring in.
Many interesting events capable of burying the tempo of the debate have recently surfaced in the media, yet the tax law discussion persists due to how deeply entrenched public interest is in the contested laws.
However, while many view the issue from angles such as a breach of public trust, a violation of legislative privilege by the executive council, the passage of an ill-prepared law and so on, I see it from a different, narrower, and governance-centred perspective.
What brought this issue to public attention was an alarm raised by Abdulsammad Dasuki, a member of the House of Representatives from Sokoto State, during a plenary on December 17, 2025. He called the attention of the House to what he identified as discrepancies between the gazetted version of the tax laws he obtained from the Federal Ministry of Information and what was actually debated, agreed upon, and passed on the floors of both the House and the Senate.
He requested that the Speaker ensure all relevant documents, including the harmonised versions, the votes and proceedings of both chambers, and the gazetted copies, are brought before the Committee of the Whole for careful scrutiny. The lawmaker expressed concern over what he described as a serious breach of his legislative privilege.
Beyond that, however, my concern is about how safe and protected Nigerians’ interests are in the hands of our lawmakers at the National Assembly. This ongoing discussion raises a critical question about representation in Nigeria. Does this mean that if Dasuki had also been indifferent and had not bothered to utilise the Freedom of Information Act 2011 to obtain the gazetted version of the laws from the Federal Ministry of Information, take time to study it, and make comparisons, there would have been no cause for alarm from any of Nigeria’s 360 House of Representatives members and 109 senators? Do lawmakers discard the confidence we reposed in them immediately after election results are declared?
This debate should indeed serve a latent function of waking us up to the reality of the glaring disconnect between public interest and the interests of our representatives. The legislature in a democratic setting is a critical institution that goes beyond routine plenaries that are often uninteresting and sparsely attended by the lawmakers. It is meant to be a space for scrutiny, deliberation, and the protection of public interest, especially when complex laws with wide social consequences are involved.
We saw Ali Ndume in a short video clip that recently swept the media, furiously saying during a verbal altercation with Adams Oshiomhole over ambassadorial screening that “the Senate is not a joke.” The Senate is, of course, not a joke, and either should the entire National Assembly be.
Ideally, it should not be a joke to us or to the legislators themselves. Therefore, we should not shy away from discussing how disinterested those entrusted with the task of representing us, and primarily protecting our interests, appear to be in our collective affairs.
It is not a coincidence that even before the current debate around the tax reform law, it had continued to generate controversy since its inception. It also does not take quantum mechanics to understand that something is fundamentally wrong when almost nobody truly understands the law. Thanks to social media, I have come across numerous skits, write-ups, and commentaries attempting to explain it, but often followed by opposing responses saying that the authors either did not understand the law themselves or did not take sufficient time to study it.
The controversy around the gazetted Tax Reform Laws should not end with public outrage or media debates alone. It should force a deeper reflection on how laws are made, checked, and defended in Nigeria’s democracy. A system that relies on the alertness of one lawmaker to prevent serious legislative discrepancies is not a resilient or reliable system. Representation cannot be occasional and vigilance cannot be optional.
Nigerians deserve a legislature that safeguards their interests, not one that notices breaches only when a few individuals choose to be different and look closely. If this ongoing debate does not lead to formidable internal checks and a renewed sense of responsibility among lawmakers, then the problem is far bigger than a flawed gazette. When legislative processes fail, it is ordinary Nigerians who bear the cost through policies they did not scrutinize and consequences they did not consent to.
Isah Kamisu Madachi is a public policy enthusiast and development practitioner. He writes from Abuja and can be reached via: [email protected]
By Blaise Udunze
By any standard, Nigeria’s ongoing bank recapitalisation exercise is one of the most consequential financial sector reforms since the 2004-2005 consolidation that shrank the number of banks from 89 to 25. Then, as now, the stated objective was stability to have stronger balance sheets, better shock absorption, and banks capable of financing long-term economic growth.
The Central Bank of Nigeria (CBN), in 2024, mandated a sweeping recapitalisation exercise compelling banks to raise substantially higher capital bases depending on their license categories. The categorisation mandated that every Tier-1 deposit money bank with international authorization is to warehouse N500 billion minimum capital base, and a national bank must have N200 billion, while a regional bank must have N50 billion by the deadline of 31st March 2026. According to the apex bank, the objectives were to strengthen resilience, create a more robust buffer against shocks, and position Nigerian banks as global competitors capable of funding a $1 trillion economy.
But in the thick of the race to comply and as the dust gradually settles, a far bigger conversation has emerged, one that cuts to the heart of how our banking system works. What will the aftermath of recapitalisation mean for Nigeria’s banking landscape, financial inclusion agenda, and real-sector development?
Beyond the headlines of rights issues, private placements, and billionaire founders boosting stakes, every Nigerians deserve a sober assessment of what has changed, and what still must change, if recapitalisation is to translate into a genuinely improved banking system.
The points are who benefits most from its evolution, and whether ordinary Nigerians will feel the promised transformation in their everyday financial lives, because history has taught us that recapitalisation is never a neutral policy. The fact remains that recapitalization creates winners and losers, restructures incentives, and often leads to unintended outcomes that outlive the reform itself.
Concentration Risk: When the Big Get Bigger
Recapitalisation is meant to make banks stronger, and at the same time, it risks making them fewer and bigger, concentrating power and risks in an ever-narrowing circle. Nigeria’s Tier-1 banks, those already controlling roughly 70 percent of banking assets, are poised to expand further in both balance sheet size and market influence. This deepens the divide between the “haves” and “have-nots” within the sector.
A critical fallout of this exercise has been the acceleration of consolidation. Stronger banks with ready access to capital markets, like Access Holdings and Zenith Bank, have managed to meet or exceed the new thresholds early by raising funds through rights issues and public offerings. Access Bank boosted its capital to nearly N595 billion, and Zenith Bank to about N615 billion.
In contrast, banks that lack deep pockets or the ability to quickly mobilise investors are lagging. The results always show that the biggest banks raise capital faster and cheaper, while smaller banks struggle to keep pace.
As of mid-2025, fewer than 14 of Nigeria’s 24 commercial banks met the required capital base, meaning a significant number were still scrambling, turning to rights issues, private placements, mergers, and even licensing downgrades to survive.
The danger here is not merely numerical. It is systemic: as capital becomes more concentrated, the banking system could inadvertently mimic oligopolistic tendencies, reducing competition, narrowing choices for customers, and potentially heightening systemic risk should one of these “too-big-to-fail” institutions falter.
Capital Flight or Strategic Expansion? The Foreign Subsidiary Question
One of the most contentious aspects of the recapitalisation aftermath has been the deployment of newly raised capital, especially its use outside Nigeria. Several banks, flush with liquidity from rights issues and injections, have signalled or executed investments in foreign subsidiaries and expansions abroad, like what we are experiencing with Nigerian banks spreading their tentacles to the Ivory Coast, Ghana, Kenya, and beyond. Zenith Bank’s planned expansion into the Ivory Coast exemplifies this outward push.
While international diversification can be a sound strategic move for multinational banks, there is an uncomfortable optics and developmental question here: why is Nigerian money being deployed abroad when millions of Nigerians remain unbanked or underbanked at home?
According to the World Bank, a large number of Nigeria’s adult population still lack access to formal financial services, while millions of SMEs, micro-entrepreneurs, and rural households remain on the edge, underserved by traditional banks that now chase profitability and scale.
Of a truth, redirecting Nigerian capital to foreign markets may deliver shareholder returns, but it does little in the short term to advance domestic financial inclusion, poverty reduction, or grassroots economic participation. The optics of capital flight, even when legal and strategic, demand scrutiny, especially in a nation still struggling with deep regional and demographic disparities.
Impact on Credit and the Real Economy
For the ordinary Nigerian, the most important question is simple: will recapitalisation make credit cheaper and more accessible?
History suggests the answer is not automatic. The tradition in Nigeria’s bank system is mainly to protect returns, and for this reason, many banks respond to higher capital requirements by tightening lending standards, raising interest rates, or focusing on low-risk government securities rather than private-sector loans, because raising capital is expensive, and banks are profit-driven institutions. Small and medium-sized enterprises (SMEs), often described as the engine of growth, are usually the first casualties of such risk aversion.
If recapitalisation results in stronger balance sheets but weaker lending to the real economy, then its benefits remain largely cosmetic. The economy does not grow on capital adequacy ratios alone; it grows when banks take measured risks to finance production, innovation, and consumption.
Retail Banking Retreat: Handing the Mass Market to Fintechs?
In recent years, we have witnessed one of the most striking shifts, or a gradual retreat of traditional banks from mass retail banking, particularly low-income and informal customers.
The question running through the hearts of many is whether Nigerian banks are retreating from retail banking, leaving space for fintech disruptors to fill the void.
In recent years, players like OPAY, Moniepoint, Palmpay, and a host of digital financial services arms have become de facto retail banking platforms for millions of Nigerians. They provide everyday payment services, wallet functionalities, micro-loans, and QR-enabled commerce, areas traditional banks once dominated. This trend has accelerated as banks chase corporate clients where margins are higher and risk profiles perceived as more manageable. The true picture of the financial landscape today is that the fintechs own the retail space, and banks dominate corporate and institutional finance. But it is unclear or uncertain if this model can continue to work effectively in the long term.
Despite the areas in which the Fintechs excel, whether in agility, product innovation, and customer experience, they still rely heavily on underlying banking infrastructure for liquidity, settlement, and regulatory compliance. Should the retail banking ecosystem become split between digital wallets and corporate corridors, rather than being vertically integrated within banks, systemic liquidity dynamics and financial stability could be affected.
Nigerians deserve a banking system where the comforts and conveniences of digital finance are backed by the stability, regulatory oversight, and capital strength of licensed banks, not a system where traditional banks withdraw from retail, leaving unregulated or lightly regulated players to carry that mantle.
Corporate Governance: When Founders Tighten Their Grip
The recapitalisation exercise has not been merely a technical capital-raising exercise; it has become a theatre of power plays at the top. In several banks, founders and major investors have used the exercise to increase their stakes, concentrating ownership even as they extol the virtues of financial resilience.
Prominent founders, from Tony Elumelu at UBA to Femi Otedola at First Holdco and Jim Ovia at Zenith Bank, have all been actively increasing their shareholdings. These moves raise legitimate questions about corporate governance when founders increase control during a regulatory exercise. Are they driven by confidence in their institutions, or are they fortifying personal and strategic influence amid industry restructuring?
Though there might be nothing inherently wrong with founders or shareholders demonstrating faith in their institutions, one fact remains that the governance challenge lies not simply in who holds the shares, but how decisions are made and whose interests are prioritised. Will banks maintain robust internal checks and balances, ensuring that capital deployment aligns with national development goals? The question is whether the CBN is equipped with adequate supervisory bandwidth and tools to check potential excesses if emerging shareholder concentrations translate into undue influence or risks to financial stability. These are questions that transcend annual reports; they strike at the heart of trust in the system.
Regional Disparity in Lending: Lagos Is Not Nigeria
One of the persistent criticisms of Nigerian banking is regional lending inequality. It has been said that most bank loans are still overwhelmingly concentrated in Lagos and the Southwest, despite decades of financial deepening in this region; large swathes of the North, Southeast, and other underserved regions receive disproportionately smaller shares of credit. This imbalance not only undermines inclusive growth but also fuels perceptions of economic exclusion.
Recapitalisation, in theory, should have enhanced banks’ capacity to support broader economic activity. Yet, the reality remains that loans and advances are overwhelmingly concentrated in economic hubs like Lagos.
The CBN must deploy clear incentives and penalties to encourage geographic diversification of lending. This could include differentiated capital requirements, credit guarantees, or tax incentives tied to regional loan portfolios. A recapitalised banking system that does not finance national development is a missed opportunity.
Cybersecurity, Staff Welfare, and the Technology Deficit
Beyond balance sheets and brand expansion, there is a human and technological dimension to the banking sector’s challenge. Fraud remains rampant, and one of the leading frustrations voiced by Nigerians involves failed transactions, delayed reversals, and poor digital experience. Banks can raise capital, but if they fail to invest heavily in cybersecurity, fraud detection, staff training, and welfare, the everyday customer will continue to view the banking system as unreliable.
Nigeria’s fintech revolution has thrived precisely because it has pushed incumbents to become more customer-centric, agile, and tech-savvy. If banks now flush with capital don’t channel a portion of those funds into robust IT systems, workforce development, fraud mitigation, and seamless customer service, then the recapitalisation will have achieved little beyond stronger balance sheets. In short, Nigerians should feel the difference, not merely in stock prices and market capitalisation, but in smooth banking apps, instant reversals, responsive customer care, and secure platforms.
The Banks Left Behind: Mergers, Failures, or Forced Restructuring?
With fewer than half the banks having fully complied with the recapitalisation requirements deep into 2025, a pressing question is: what awaits those that lag? Many banks are still closing capital gaps that run into hundreds of billions of naira. According to industry estimates, the total recapitalisation gap across the sector could reach as much as N4.7 trillion if all requirements are strictly enforced.
Banks that fail to meet the March 2026 deadline face a few options:
– Forced M&A. Regulators could effectively compel weaker banks to merge with stronger ones, echoing the consolidation wave of 2005 that reduced the sector from 89 to 25 banks.
– License downgrades or conversions. Some banks may choose to operate at a lower license category that demands a smaller capital base.
– Exits or closures. In extreme cases, banks that can neither raise capital nor find a merger partner might be forced out of the market.
This regulatory pressure should not be construed merely as punitive. It is part of the CBN’s broader architecture of ensuring that only solvent, well-capitalised, and risk-prepared institutions operate. However, the transition must be managed carefully to prevent contagion, protect depositors, and preserve confidence.
Why Are Tier-1 Banks Still Chasing Capital?
Perhaps the most intriguing puzzle is why some Tier-1 banks, long regarded as strong and profitable, are aggressively raising capital. Even banks thought to be among the strongest, such as UBA, First Holdco, Fidelity, GTCO, and FCMB, have struggled to close their capital gaps. UBA, for instance, succeeded in raising around N355 billion toward its N500 billion target at one point and planned additional rights issues to bridge the remainder.
This reveals another reality that capital is not just numbers on paper; it is investor confidence, market appetite, and macroeconomic stability.
One can also say that the answer lies partly in ambition to expand into new markets, infrastructure financing, and compliance with stricter global standards.
However, it also reflects deeper structural pressures, including currency depreciation eroding capital, rising non-performing loans, and the substantial funding required to support Nigeria’s development needs. Even giants are discovering that yesterday’s capital is no longer sufficient for tomorrow’s challenges.
Reform Without Deception
As the Nigerian banking sector recapitalization exercise comes to a close by March 31, 2026, the ultimate test will be whether the reforms deliver on their transformational promise.
Some of the concerns in the minds of Nigerians today will be to see a system that supports inclusive growth, equitable credit distribution, world-class customer service, and resilient financial intermediation. Or will we see a sector that, despite larger capital bases, still reflects old hierarchies, geographic biases, and operational friction? The cynic might say that recapitalisation simply made big banks bigger and empowered dominant shareholders.
But a more hopeful perspective invites stakeholders, including regulators, customers, civil society, and bankers themselves, to co-design the next chapter of Nigerian banking; one that balances scale with inclusion, profitability with impact, and stability with innovation. The difference will be made not by press releases or shareholder announcements, but by deliberate regulatory action and measurable improvements in how banks serve the economy.
For now, the capital has been raised, but the true capital that counts is the confidence Nigerians place in their banks every time they log into an app, make a transfer, or deposit their life’s savings. Only when that trust is visible in everyday experience can we say that recapitalisation has truly succeeded.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
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