Banking
McKinsey Research Shows Big Prospects Ahead In Africa
By Modupe Gbadeyanka
Although Africa’s growth has slowed, the long term fundamentals are strong, big business opportunities lie ahead and the overall outlook is positive. These facts are contained in the latest McKinsey Global Institute Report just released today titled, Lions on the Move II: Realizing The Potentials of Africa’s Economy.
According to the MGI’S new report, four fundamentals are likely to underpin Africa’s economic growth. Firstly, Africa has the fastest urbanization rate in the world. Over the next ten years, 187 million more Africans will live in cities—equivalent to half the US population today.
Secondly, it has the biggest working-age population in the world of 1.1 billion in 2034—larger than in either China or India. Thirdly, it has the largest reserves in the world of many key natural resources (e.g., 60 percent of the world’s unutilized but potentially available cropland, and the largest global reserves of vanadium, manganese, and many others).
Additionally, Africa has the chance to leapfrog old technologies using mobile and digital (e.g., penetration of smartphones expected to hit 50 percent in 2020 vs. 18 percent in 2015).
The new MGI report confirmed that spending by consumers and businesses in Africa today totals $4 Trillion. By 2025, the total could be $5.6 Trillion. Household consumption is expected to grow by 3.3% a year and reach $2.1 Trillion by 2025.
The total could be $5.6 Trillion, reflecting an expanding African consuming class. Business spending is expected to grow from $2.6 Trillion in 2015 to $3.5 Trillion by 2025, and Africa has an opportunity to nearly double manufacturing output from $500 Billion today to $930 Billion in 2025.
AFRICA’S economies are no longer a story about exporting commodities- but about tapping into vibrant domestic demand. Accelerated industrialization could lead to a steep change in productivity and the creation of 6-14 million stable jobs over the next 10 years.
AchaLeke, a McKinsey Senior Partner and Report Co-author, said: “Our new research shows how in coming years Africa will benefit from strong fundamentals including a young and growing population, the world’s fastest urbanization rate, and accelerating technological change. These will help drive rapid growth in consumer markets and business supply chains, and will offer opportunities to build large, profitable industrial and services companies.
“Tapping Africa’s consumer markets will require companies to have a detailed understanding of income, demographic, and category trends.
“Thriving in business markets will require businesses to offer products and develop sales forces able to target the relatively fragmented private sector. But what our research also shows is how much work needs to be done both by companies themselves and by Africa’s governments to translate opportunity into tangible economic benefits.”
To make the most of the opportunities, Africa needs more large companies. MGI’S new database of Corporate Africa, shows that the continent has 700 companies with revenues of more than $500 million, of which 400 companies have revenues of more than $1 Billion.
AFRICA’S companies are growing faster and are generally more profitable than their global peers. “Africa’s top 100 companies have achieved success by developing strong positions at home, staying the course to build their businesses over decades, integrating what other companies would usually outsource, and investing in building and retaining talent.
Further success is possible in six high-potential sectors with high growth, high profitability, and low consolidation. These are: wholesale and retail, food and agro-processing, health care, financial services, light manufacturing, and construction.”
Governments need to play a stronger role in unleashing renewed dynamism. Six priorities emerge from this research. Firstly, mobilize more domestic resources, taking bold steps to mobilize more of its own funding to finance development.
Secondly, aggressively diversify economies, encouraging growth in high-potential sectors in close cooperation with business, based on a clear understanding of their countries’ comparative advantages. Then accelerate infrastructure development and deepen regional integration.
Additionally, create tomorrow’s talent, ensuring that educational and training systems build work-relevant skills, and that students are aware of, and encouraged to enter, these vocations and that the private sector builds on best practice.
Finally, ensure “healthy” urbanization, so that cities grow with the infrastructure required to make the biggest positive economic and social impact possible. Delivering on these six priorities will require the vision and determination to drive far-reaching reforms in many areas of public life—and capable public administration with the skill and commitment to implement such reforms.
By Adedapo Adesanya and Modupe Gbadeyanka
The Central Bank of Nigeria (CBN) has described rumours that Polaris Bank Limited failed to meet the recapitalisation deadline on March 31, 2026, as fake news.
The banking sector regulator in a post via its social media handle on X, formerly known as Twitter, on Thursday also said reports that notable businessman, Mr Razaq Okoya, was planning to acquire the financial institution were false.
There were reports on Wednesday that Polaris Bank, which was created after the operating licence of Skye Bank was revoked by the CBN in 2018, could not meet the deadline to raise its capital base.
The central bank gave banks two years to increase their minimum capital requirements based on their licence coverage.
For lenders with an international licence, they were to boost their capital base from N25 billion to N500 billion, while national banks were asked to have at least N200 billion, with regional lenders N50 billion.
The deadline was March 31, 2026, and according to the CBN, about 33 banks scaled through, raising about N4.65 trillion.
An X user had written that, “Polaris Bank is currently undergoing a liquidation process for not able to comply with the Central Bank of Nigeria recapitalisation requirements, and the bank would be put under NDIC to be liquidated. The bank licence might also be revoked soon. But billionaire Razaq Okoya has made a bid to purchase the bank, reinstate it, [and] also to comply with the CBN requirements. This deal is said to be finalised the moment NDIC and other shareholders agree with what Razaq Okoya is ready to offer.”
While reacting to the above, the CBN said, “This content is fake. Let the public be guided. The Nigerian banking system is safe and secure.”
In 2024, the banking sector regulator appointed new chief executives for three banks, including Polaris Bank, after the dissolution of their boards and managements over the non-compliance of these banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of the Banks and Other Financial Institutions Act, 2020. The others were Union Bank and Keystone Bank.
By Dipo Olowookere
Shareholders of Wema Bank Plc will receive a dividend of N1.25 for the 2025 financial year if approved at the next Annual General Meeting (AGM).
The board proposed the cash reward to investors after achieving record-breaking growth and unparalleled performance across several key metrics in the year under review.
Details of the FY 2025 audited financial results of the lender showed that pre-tax profit went up by 116.4 per cent to N221.9 billion from N102.5 billion, while net profit soared by 125.4 per cent to N194.5 billion from N86.2 billion in 2024.
Last year, the financial institution grew its gross earnings by 52.8 per cent to N660.6 billion from N432.3 billion in the preceding year, driven largely by a 62.7 per cent growth in interest income, reflecting improved yields on earning assets and growth in the loan book.
As for its balance sheet, it was observed that total assets chalked up 41.5 per cent to N5.07 trillion from N3.59 trillion, and customer deposits grew by 30.3 per cent to N3.29 trillion from N2.52 trillion, demonstrating sustained customer confidence.
This growth in deposits provided stable funding for asset growth while supporting liquidity and balance sheet resilience. Net interest income more than doubled, rising by 103.9 per cent to N361.0 billion, supported by improved asset pricing and balance sheet expansion. Non-interest income also grew modestly by 8.3 per cent to N85.3 billion. Net loans and advances increased by 44.7 per cent to N1.74 trillion, up from N1.20 trillion in FY 2024, thus reflecting Wema Bank’s continued support for key sectors of the economy while maintaining a disciplined risk management approach.
“Wema Bank has delivered one of the strongest growth trajectories in its history. From a PBT of N14.75 billion three years ago, we grew to N43.59 billion in 2023 and reached N102 billion in 2024. In 2025, we have taken an even bolder step forward, recording a PBT of N221 billion,” the chief executive of Wema Bank, Mr Moruf Oseni, commented.
“As of September 2025, Wema Bank successfully surpassed the N200 billion recapitalisation minimum threshold for commercial banks with national authorisation.
“Our FY2025 Financial Results only corroborate what has become abundantly clear—Wema Bank is here not just to stay, but to lead the future of banking in Africa,” he added.
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) is considering the recapitalisation and restructuring of Development Finance Institutions (DFIs) to address the significant financing gap facing micro, small, and medium-sized enterprises (MSMEs).
The Deputy Governor of the apex bank in charge of Economic Policy, Mr Muhammad Abdullahi, disclosed this during a panel session at the launch of the Nigeria Development Update by the World Bank in Abuja on Tuesday.
He explained that a recent review by the apex bank found that existing DFIs were too small to meet the credit needs of businesses.
DFIs are specialised, government-backed financial entities designed to promote economic growth by funding critical sectors like agriculture, infrastructure, and SMEs. Key institutions include the Bank of Industry (BOI), Development Bank of Nigeria (DBN), Nigeria Export Import Bank (NEXIM Bank), Bank of Agriculture (BOA), National Credit Guarantee Company Limited, and Nigerian Consumer Credit Corporation, among others.
“We conducted a review last year of the development finance space. Across all the DFIs in Nigeria, the total asset base is slightly above N8 trillion, whereas what is required in development finance for MSMEs is over N130 trillion,” he said.
He said that simply injecting capital would not solve the problem.
“The only way to address this is not only through public sector capital injections into these institutions, but also by making them bankable and investable,” he said.
Abdullahi said the CBN and the Ministry of Finance are reviewing DFI structures to improve their efficiency and risk appetite.
“We are reviewing the entire sector to ensure that we can correct the incentives, improve risk appetite, and also strengthen capital levels,” the deputy governor added.
He also said the reforms aim to introduce stronger market-based principles.
“We are looking at the structure to see how more market fundamentals can be incorporated, because the way it has been done in the past has not delivered the desired results,” Mr Abdullahi said.
On the persistent financing challenge for MSMEs, he said lending to the real sector has always been one of the structural challenges “Nigeria’s economy faces in terms of ensuring that credit reaches businesses that require it”.
Business Post reports that the CBN recently concluded the recapitalisation of the Nigerian banking sector, while the insurance sector is ongoing.
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