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
$40bn Net Reserves, Record Wealth, Relentless Poverty: Who Is Nigeria’s Economy Serving Today?
By Blaise Udunze
No doubt, it was a welcome announcement that Nigeria’s net foreign exchange (FX) reserves have surged by an astonishing 1,233 per cent from about $3 billion to over $40 billion. This would ordinarily be the kind of economic milestone that inspires optimism, coupled with gross external reserves of about $52.52 billion, which are sufficient to finance roughly 11 months of imports of goods and services. Penultimate week, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, presented the development at the end of the 306th meeting of the apex bank’s Monetary Policy Committee (MPC) as evidence that its reforms are working.
It is no surprise that around the same period, one would say that another important economic event occurred with the government sharing more money than ever before with the federal, state, and local governments, as the Federation Account Allocation Committee (FAAC) distributed a record N2.55 trillion, representing an increase of N250 billion over the N2.3 trillion shared in the preceding month.
Of course, the official figures are impressive numbers. Yes, anyone would conclude that the economy is becoming stronger, more stable and better positioned for growth. While this suggests stronger public finances, it also raises the question of whether these larger allocations are producing tangible improvements in the lives of ordinary Nigerians. More interesting is that another set of figures tells a completely different story.
According to the World Bank’s newly approved Country Partnership Framework for Nigeria, 61 per cent of Nigerians now live below the poverty line, while about 79 per cent are either poor or vulnerable to falling into poverty. More than 139 million Nigerians live below the poverty line. Over 86 million people lack access to electricity, while millions of young Nigerians enter the labour market every year with little prospect of decent employment.
The contradiction could not be starker. If reserves are rising, government revenues are increasing, and governments at all levels are receiving record allocations, why are the lives of ordinary Nigerians becoming more difficult?
This is the question policymakers must answer not with statistics, but with tangible improvements in the lives of citizens. If government agencies engineering these figures must know, these are not merely economic statistics; they are the lived realities by which citizens judge any government.
Foreign exchange reserves are not an economic trophy. They are a means to an end. Strong reserves are expected to stabilise the currency, reassure investors, strengthen the country’s ability to withstand external shocks and create an enabling environment for investment, production and employment.
But reserves alone do not feed families nor would they reduce their housing rents. They do not lower transport fares. They do not reduce school fees. They do not make healthcare affordable. Nor do they automatically create jobs.
Ultimately, this is to say that the success of macroeconomic reforms must be measured not by the strength of the CBN’s balance sheet but by the wellbeing of the Nigerian people.
Historically, unlike our dear country, countries that consistently build substantial foreign exchange reserves do so on the back of strong economic fundamentals. The fact is that they maintain sustained trade surpluses, export diversified products, attract large volumes of long-term foreign direct investment (FDI), develop globally competitive manufacturing industries and continuously improve productivity.
Nigeria, unfortunately, still struggles on nearly all these fronts. The country’s export earnings remain overwhelmingly dependent on crude oil. Non-oil exports remain relatively insignificant. Value-added manufacturing exports are weak. Another area that raises concern is agriculture, which continues to export mostly raw commodities rather than higher-value processed products despite being known previously as the country’s mainstay. With all these so-called developments, Nigeria still imports refined petroleum products, machinery, pharmaceuticals, industrial inputs and even food that could be produced locally.
This naturally raises an uncomfortable but legitimate question that requires an answer. Yes, it would be necessary to ask: How exactly has Nigeria grown and accumulated over $40 billion in net foreign exchange reserves without the structural fundamentals that typically support such reserve growth?
The apex bank has continued to credit exchange-rate reforms, improved transparency, stronger investor confidence and increased diaspora remittances. Well, it would be said that these achievements deserve recognition.
However, they do not completely explain the scale or, more importantly, the sustainability of the reserve accumulation.
Nigeria has not consistently recorded the large trade surpluses associated with countries that rapidly accumulate reserves. Oil production remains below historical capacity. Export diversification remains limited. Ease of doing business continues to be constrained by multiple taxation, infrastructure deficits, insecurity, policy uncertainty, logistics bottlenecks and unreliable electricity.
Without addressing these structural deficiencies, reserve accumulation risks becoming more financial than productive.
Equally important is the question of foreign direct investment. Governor Cardoso has argued that improved macroeconomic stability is attracting foreign investors. That may well be true. But confidence alone does not build factories.
The real question is how much fresh FDI has actually entered Nigeria’s productive sectors? How much has gone into manufacturing? How much into agro-processing? How much into export-oriented industries capable of generating sustainable foreign exchange earnings and creating jobs?
If reserve growth is being driven largely by short-term portfolio investments attracted by high interest rates rather than long-term productive investment, then Nigeria remains vulnerable. Portfolio investors can exit as quickly as they entered whenever global financial conditions change.
The unarguable fact is that foreign direct investment, by contrast, creates factories, expands production, develops supply chains and creates lasting employment. Nigeria desperately needs more of the latter.
The CBN also points to diaspora remittances as a growing source of reserve accumulation, projecting inflows of approximately $1 billion every month before the end of the year. Again, this is encouraging.
Again, the country will not be tired of asking questions because several of these questions deserve closer examination. How much of these remittances represent genuinely new inflows rather than funds previously routed through informal channels? Come to think of it, how much of these remittances finance productive investments instead of household consumption? Can diaspora remittances realistically become a permanent substitute for export competitiveness?
No economy has ever industrialised on remittances alone. A nation cannot sustainably depend on the sacrifices of its citizens abroad while failing to create opportunities for them at home.
Beyond the reserve figures lies another troubling contradiction. This is more disturbing because every month, FAAC distributes unprecedented sums to governments across Nigeria. Yet again, with daily regret, the average Nigerian struggles with deteriorating public services.
Honestly speaking, it has become so frustrating that the majority of the people who yearn for pleasant or attractive experiences are struggling as roads remain poor, public hospitals remain overstretched, schools continue to decline, electricity remains unreliable, water infrastructure remains inadequate, and youth unemployment remains widespread. Worst still, think of the cases as the nation continues to grapple with rising inflation, worsening poverty, declining purchasing power, struggling businesses and persistent insecurity.
One major contradiction is that if revenues continue rising while poverty deepens, then one unavoidable question must be asked: Where is the money going? Another pertinent question: How can the citizens be surrounded by water and still suffer from thirst or soap lather in their eyes?
This has been the predominant worry in the minds of many even as the World Bank itself acknowledges this disconnect. While praising recent macroeconomic reforms for improving fiscal stability, strengthening foreign reserves and restoring investor confidence, it concludes emphatically that the gains have not translated into meaningful improvements in living standards.
Ironically, despite the claims of declining inflation, it continues to erode purchasing power. Social protection remains weak. Most Nigerians remain trapped in low-productivity informal employment.
One contradicting and astonishing step taken recently is nowhere more evident than in the Central Bank’s monetary policy. Consider this: despite a marginal decline in headline inflation to 15.91 per cent in June 2026, the Monetary Policy Committee retained the benchmark Monetary Policy Rate (MPR) at 26.5 per cent, alongside a 45 per cent Cash Reserve Ratio (CRR) for commercial banks.
The decision reflects understandable caution. The CBN remains concerned that escalating geopolitical tensions in the Middle East could increase global energy prices, worsen imported inflation and reverse recent gains in price stability.
From a monetary policy perspective, this caution is defensible. But from the standpoint of businesses and households, the consequences are profound. An interest rate of 26.5 per cent inevitably translates into prohibitively expensive bank lending.
The ripple and adverse effects have led to manufacturers struggling to finance expansion. Another tough aspect is seeing the small and medium-sized enterprises, the backbone of employment generation, find access to affordable credit increasingly difficult. Entrepreneurs postpone investments. Factories delay expansion. Potential employers reduce hiring. Economic growth slows.
Ironically, while it is understandable that high interest rates may help stabilise inflation and attract foreign portfolio inflows that support reserves, it should be made known that they simultaneously suppress domestic investment, production and job creation.
In other words, the same policies helping strengthen the country’s macroeconomic indicators may also be constraining the real economy. Even the celebrated decline in inflation deserves closer scrutiny.
The national inflation rate may have eased marginally to 15.91 per cent, but this national average masks severe hardship across much of the country, which continues to create perpetual pain.
How best can this be figured out if data from the National Bureau of Statistics show that 19 states and the Federal Capital Territory recorded inflation rates exceeding 30 per cent, with Niger State above 42 percent and Kogi State exceeding 41 per cent?
Food inflation continues to rise, driven by increases in the prices of tomatoes, pepper, beef, yams, garri and other staple foods.
Businesses themselves remain unconvinced. The Organised Private Sector has welcomed the marginal moderation in inflation but insists that prices remain painfully high for both consumers and businesses.
Leaders of small business associations argue that market realities tell a different story from headline statistics. For millions of Nigerians, inflation is not measured by percentages. It is measured by empty shopping baskets. By reduced meal portions. By businesses shutting their doors. By families withdrawing children from school. By postponed medical treatments.
From a theoretical standpoint, macroeconomic stability is undoubtedly necessary. Without it, sustainable development is impossible. But it would also be agreed that macroeconomic stability alone is not sufficient. It can be argued further that economic reforms must eventually improve household incomes, reduce poverty, expand productive employment and raise living standards.
Otherwise, they risk becoming reforms that look impressive in economic reports but remain invisible in everyday life.
The truth remains that with the current situation, Nigeria therefore stands at a critical pivotal moment and the decisions taken now will determine its future.
The current reserve position should not become a destination for celebration but a foundation for deeper structural transformation. The country must diversify exports beyond crude oil. Strengthen manufacturing. Promote value-added agricultural exports. Improve electricity supply. Reduce the cost of doing business. Expand logistics infrastructure. Attract long-term productive investment.
In addition, support local industries with affordable financing. Strengthen institutions. Improve governance and ensure greater accountability for public spending. Only then will rising reserves translate into rising prosperity. Only then will record FAAC allocations produce visible development. Only then will macroeconomic stability become household stability.
The ultimate measure of economic success is not the number of dollars held in the Central Bank’s vaults. It is whether parents can afford school fees and housing rent. Whether young graduates can find decent jobs. Whether businesses can borrow, produce and expand. Whether families can afford food without sacrificing nutrition. Whether citizens feel that economic growth includes them.
Until those questions receive positive answers, one uncomfortable question will continue to linger. Who Is Nigeria’s Economy Serving Today?
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: bl***********@***il.com
By Henry Obiekea
Nigeria’s banking industry is entering one of the most significant transformation periods since the 2005 banking consolidation exercise. The Central Bank of Nigeria’s (CBN) ongoing recapitalisation programme is more than a regulatory requirement—it is a strategic investment in the country’s financial future. If implemented successfully, it has the potential to strengthen financial stability, deepen credit access, improve investor confidence, and support a more inclusive and resilient economy.
In March 2024, the CBN announced new minimum capital requirements for commercial, merchant and non-interest banks. Under the new framework, international commercial banks are required to maintain a minimum paid-up capital of ₦500 billion, national commercial banks ₦200 billion, and regional commercial banks ₦50 billion. Merchant banks are required to hold ₦50 billion, while national and regional non-interest banks are required to maintain ₦20 billion and ₦10 billion respectively. The policy reflects the realities of today’s economy, where inflation, currency depreciation and expanding financial demands have significantly altered the capital required to support sustainable banking operations.
Many institutions have responded through rights issues, public offers, private placements, mergers and acquisitions in pursuit of the revised capital requirements. Beyond regulatory compliance, the exercise is already encouraging stronger governance, better capital planning and increased investor participation within Nigeria’s financial markets.
The recapitalisation conversation, however, extends beyond deposit money banks. The CBN has also introduced revised capital requirements for microfinance banks, recognising the critical role they play in extending financial services to underserved individuals, nano businesses and small enterprises. As the financial landscape becomes increasingly digital, stronger capital bases will enable these institutions to invest in technology, cybersecurity, risk management and product innovation while maintaining public confidence.
For Nigeria’s rapidly growing fintech ecosystem, although they are subject to different licensing frameworks depending on their operations, the broader regulatory direction is equally clear. Institutions that facilitate payments, tech-enabled banking, lending and savings are expected to maintain governance, capital and consumer protection standards appropriate to their respective licensing frameworks. This evolution is essential as fintechs continue to account for a growing share of financial transactions and provide services to millions of previously underserved Nigerians. Collectively, these reforms present a unique opportunity to reshape Nigeria’s financial ecosystem.
A stronger banking sector creates stronger economic outcomes. Well-capitalised financial institutions are better positioned to finance infrastructure, manufacturing, agriculture, housing and technology. They possess greater capacity to absorb economic shocks, support long-term lending and withstand periods of market volatility. More importantly, they can extend larger volumes of prudently underwritten credit to businesses that create jobs and stimulate economic growth.
For small and medium-sized enterprises, which contribute significantly to Nigeria’s GDP and employment, improved access to financing remains one of the greatest growth enablers. Recapitalisation should not be assessed solely by stronger balance sheets, but also by the extent to which additional capital supports productive economic activity.
Despite remarkable progress over the last decade, millions of Nigerians remain underserved by formal financial institutions. Expanding financial inclusion requires complementary approaches across commercial banks, microfinance banks, fintechs and other regulated financial institutions. Achieving meaningful inclusion requires collaboration across commercial banks, microfinance banks, fintech companies and regulators. Each institution serves different customer segments, yet all contribute towards a common objective: bringing more Nigerians into the formal financial system.
At FairMoney Microfinance Bank, recapitalisation aligns with our continued investment in responsible lending, digital banking capabilities, sound risk management and financial inclusion. We believe technology can complement prudent credit assessment and help extend access to financial services for eligible individuals and businesses.
As the recapitalisation programme progresses, success should ultimately be measured by broader outcomes: stronger institutions, deeper financial inclusion, increased SME financing, enhanced consumer confidence and sustained economic growth. Capital itself does not transform economies; how that capital is deployed does.
The Federal Government and the Central Bank of Nigeria have introduced reforms aimed at strengthening the long-term resilience of the financial sector. Continued implementation of these reforms will be important in supporting financial stability and sustainable sector growth. These decisions require vision, consistency and regulatory discipline. While the adjustment process may present short-term challenges for some institutions, the long-term benefits for financial stability, investor confidence and economic development far outweigh the costs.
Nigeria possesses one of Africa’s most dynamic financial services sectors. With stronger capital foundations, responsible innovation and continued collaboration between regulators and financial institutions, the country is well positioned to build a banking ecosystem capable of supporting its development ambitions, empowering millions more individuals and businesses, and supporting inclusive economic development over the long term.
Henry Obiekea is the Managing Director of FairMoney Microfinance Bank
By Sani Abdulrazak, PhD
People go through watershed moments sometimes when the cacophony of politics attempts to drown the cadence of progress; it becomes more serious when chimaera masquerades as certainty, but it is a known fact after all that the loudest voices are most times not necessarily the wisest.
Kaduna seems to have arrived at one of those moments. The propagandist opposition within the state is trying very hard to burnish manifestoes and criticisms wrapped in hyperbole and rehearsed until it begins to mistake itself for truth.
Yet, history has always been an unforgiving arbiter. It has an uncanny habit of stripping rhetoric naked, leaving only the vestiges of deeds. It is against that backdrop that one is compelled to reflect, not on who shouts the loudest, especially on social media, but on who has quietly altered the landscape of the beautiful crocodile state. That, conceivably, is the choice before Kaduna State.
Education hewn the destiny of a society, long before it is announced in boardrooms. Governor Uba Sani of Kaduna State appears to appreciate this axiom. As if constructing hundreds of classrooms, renovating neglected schools, expanding access to education and reviving projects abandoned to bureaucratic torpor is not remarkably astral, his administration has gone further to make tertiary education more affordable through the reduction of tuition fees in state-owned institutions. That single decision has become a bulwark against hopelessness for thousands of families. Parents breathe easier, students remain in school instead of abandoning their dreams, enrolment has received fresh impetus, and human capital has become a little less hostage to economic adversity.
Even the reconstruction of roads within Ahmadu Bello University, despite its federal status, speaks of governance that refuses to hide behind jurisdictional caveats. Curiously, while lecture halls become fuller, some critics remain engrossed in composing jeremiads, as though hashtags now award degrees and social media threads have replaced convocation ceremonies. If this does not deserve another term, then perhaps Kaduna should entrust its classrooms to keyboard warriors instead?
A sector that defies drama, yet consequentially integral in Kaduna State is healthcare. Primary Healthcare Centres have continued to receive upgrades, sixteen general hospitals have witnessed rehabilitation, the once-abandoned 300-bed Specialist Hospital has emerged from years of limbo, health insurance coverage has expanded considerably, and investments in personnel and equipment continue with assiduity. Yet, one occasionally encounters the strange absurdity wrapped as opposition, that government should be judged not by functioning hospitals but by the virulence of online criticism. It is almost as though some believe ailments or surgeries retreat before social media posts. Should we now replace stethoscopes with microphones or social media posts and call it healthcare?
If there is any sector that more clearly illustrates the difference between governance and grandstanding in Kaduna State, it is agriculture. Mechanisation, dry-season farming, free fertiliser distribution, value addition, the Special Agro-Industrial Processing Zone and renewed support for farmers all point towards a carefully crafted paradigm rather than an accidental policy.
There is a metamorphosis taking place in rural communities indeed. While genuine farmers harvest maize, ginger and tomatoes, critics harvest conspiracy theories with astonishing alacrity. One group tills the soil and produces food; the other tills public resentment. Since when did viral posts become a substitute for fertile fields?
They wouldn’t want to take their ballyhoo to infrastructure for sure, because infrastructure refuses to remain invisible no matter how determined propaganda may be. Roads snake through communities once forgotten, bridges reconnect places long separated, water projects restore hope where scarcity once seemed ineluctable, and abandoned projects have gradually returned from institutional comatose. Yet there exists a peculiar group of disgruntled politicians that notices every pothole repaired only long enough to ask why another one still exists somewhere else. It is a curious predilection, almost quixotic, to dismiss completed projects because perfection has not yet arrived. Must development now apologise for not occurring overnight?
Security remains man’s most delicate labyrinth, and perhaps the easiest subject upon which to score political points. No responsible leader claims absolute victory against insecurity, yet few can deny that many communities once deserted have gradually witnessed the return of farming, commerce and social interaction. Such progress may not satisfy those addicted to political apoplexy, but it certainly matters to the farmer returning to his land after years of displacement. Or should insecurity be preserved simply because it offers better campaign material?
Economic governance, that complex yet rarely glamorous aspect of governance, is not left out. Increased internally generated revenue, prudent expenditure, strategic partnerships, capital investments and fiscal discipline have gradually strengthened Kaduna’s financial architecture. International partners investing in Kaduna State seldom do so because of slogans, but because of credibility. Sadly, the numbers don’t lie as data is a very stubborn thing. Are spreadsheets now expected to consult political parties before balancing their figures, or should economic data also join the opposition?
Youth empowerment deserves equal reflection. With a skills acquisition centre in each of the three senatorial zones of the state, entrepreneurship support, digital innovation and targeted interventions for small businesses, an attempt is being made to replace dependency with productivity. The apotheosis of governance is not the endless distribution of charity but the deliberate creation of opportunity. Young people increasingly seek tools and training against tokenism and expectancy. Still, some measure empowerment only by the number of campaign T-shirts distributed during election season. Have branded caps suddenly become the highest form of economic policy?
The choice before Kaduna State is simpler than it first appears. Shall we exchange reduced tuition fees for recycled promises? Shall rehabilitated hospitals be traded for rehearsed indignation? Shall roads surrender to rhetoric, farms to social media debates, security gains to sensationalism, and fiscal prudence to flamboyant bombast? Shall tangible progress bow before political charlatanry merely because criticism aims to be louder than construction?
For our democracy to grow further, we must come to a non-negotiable conclusion that the ballot is not an instrument for rewarding the most eloquent critic, but for judging the most effective steward. How promising can stewardship be when classrooms are expanding, hospitals are reopening, roads are stretching farther, farmers are receiving greater support, communities are gradually becoming safer, and opportunities are multiplying.
The evidence before us is not ephemerally ethereal, but enduringly concrete. And so, the lingering questions refuse to disappear: if this is not the direction Kaduna should continue, then what is? If these are not the footprints of purposeful leadership, whose are? If measurable progress has become insufficient, what miracle remains outstanding? And if the answer lies somewhere beyond Governor Uba Sani, then who, exactly, has presented Kaduna with a more convincing testament than the one already written across its schools, hospitals, farms, roads and communities?
Sani Abdulrazak, PhD, is a writer, researcher and a public affairs analyst based in Zaria, Kaduna State.
