Feature/OPED
Candidates from Djibouti, Kenya, Madagascar and Mauritius Contesting for AUC Chairperson’s Position
By Professor Maurice Okoli and Dr Ken Onyeali Ikpe
The African Union Chairperson is an important position within the African Union. The Chairperson serves as the head of the (AU) African Union elected by the assembly of heads of state and government. As the African Union stands at a crossroads and a critical juncture, effective leadership is essential for addressing the myriad challenges facing the African continent.
After several months of conscientious search for potential contestants to take over the African Union Commission chairperson’s position, which expires next February 2025, four (4) candidates have emerged representing Djibouti, Kenya, Madagascar and Mauritius.
With these candidates already confirmed following the deadline set for submission of applications and all the necessary supporting documents, four senior African politicians are engaged in an intensive campaign and strategic lobbying across Africa. The deadline for candidacies closed on August 6, at the African Union, which is headquartered in Addis Ababa, Ethiopia.
The African Union, a continental organization consisting of 55 African Member States, is scheduled to hold elections at its summit in February 2025 to choose a successor to Moussa Faki Mahamat, chairperson of the African Union Commission. The election is conducted by secret ballot, and the winner must secure a majority of two-thirds of the vote among eligible member states.
According to the stipulated guidelines, the chairperson of the African Union Commission (AUC) is the chief executive officer who exercises administrative, legal, and financial functions. It also includes pursuing a leadership role in delivering the continental vision of an integrated transformative economy, consistently working for a prosperous and peaceful Africa. The current geopolitical situation requires engaging in beneficial relations with external development partners for the continent.
Considered Africa’s economic engine since its establishment as OAU and later transformed into AU, the head of the AUC, which is an executive body, is elected on a rotational basis between the regions of the continent for every four years and the elected chairperson can be re-elected for two terms as incorporated in the constitution. Africa has five distinctive regions: northern, western, central, southern and eastern. Quite apart from regional origin, the candidates are required to have serious educational qualifications and, most importantly, experience to handle effectively the multiple tasks as the chairperson of the AUC. (See AU report: African Union Commission Elections 2025).
Contesting Candidates
From preliminary research and monitoring, the central, western, and southern regions of Africa have already served as chairpersons, this implies it is the turn of southern and eastern candidates of Africa. Concretely, it therefore includes Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Mauritius, Rwanda, Seychelles, Somalia, South Sudan, Sudan, Tanzania, and Uganda. These countries can now, by geographical definition, produce candidates for the position of chairperson. One of the basic key criteria is the candidate must be a former president, former prime minister, or former foreign minister to take up the job which mostly includes the undertaking of “measures aimed at promoting and popularizing the objectives of the Union” and the execution of “such other functions as may be determined by the Assembly or the Executive Council.”
According to an African Union report, in early August 2024, the four confirmed candidates for this top AUC position, and to ultimately take over from the current chairperson Moussa Faki Mahamat, are Mahamoud Ali Youssouf of Djibouti, Raila Odinga of Kenya, Richard Randriamandrato of Madagascar and Anil Gayan of Mauritius.
(i) Raila Odinga is a veteran Kenyan opposition leader, who now at 79, has tried and failed five times to become president, most recently losing the 2022 election to William Ruto. Odinga spent his years in politics, fighting for democracy during the autocratic rule of President Daniel Arap Moi. “We are focused on bringing the seat home for Kenya and serving the African people,” Odinga said on X while announcing his formal candidacy.
A media report released in March 2024, titled “Museveni Endorses Raila Odinga’s AU Chairperson Bid” and circulated in the East African region showed the publicity campaign and erratic steps at promoting Kenyan Raila Odinga to take over as Chairman of the AU Commission. Interestingly, Raila Odinga, Kenya’s opposition leader, has readily accepted Ugandan President Yoweri Museveni’s endorsement of his candidacy for African Union Commission chairperson.
In a flagship statement posted via his social media platforms, Odinga said Museveni endorsed him during a joint meeting with President William Ruto. The Azimio alliance’s leader stated that the joint meeting with President Museveni and President Ruto was organized at the Ugandan president’s invitation. Odinga has an unmistakable political influence. Born into a modest political family and grew up in politics. His profound perspectives suggest he operates as a pivotal figure within power dynamics and his decision-making capacity is perceived as absolute pragmatic. Odinga, most observers say, possesses an assertive leadership style and always expresses steadfast interest in the complexity of a development-oriented society. These leadership skills echo his deep-seated affection for a genuine communal, regional, and continental tradition. Odinga as a suitable candidate underscores the perfect choice to embrace and settle for the best administrator for Africa.
(ii) Richard Mahitsison Randriamandrato studied in Paris, France. Randriamandrato was Madagascar’s foreign minister from March to October 2022 but was fired after voting at the United Nations to condemn Russia’s annexations of four Ukrainian regions. Madagascar has followed a non-aligned position on the war in Ukraine. He is a prominent Malagasy politician known for his role in the government of Madagascar.
He served also as a minister of economy and finance from 2019 until 2021 where he focused on economic policies aimed at stabilizing and developing Madagascar’s economy. Beyond his ministerial roles, he has been involved in strategic foresight and economic intelligence advising on regional infrastructure and development projects.
(iii) Anil Gayan, 76, served as foreign minister of the Indian Ocean island nation of Mauritius between 1983 and 1986, and again from 2000 to 2003. After this, he has since held other posts including at the tourism and health ministries. His biography says Anil Gayan’s ancestors migrated from India when the island was a British colony. He studied law at the London School of Economics and the University of London until 1974. As a politician, he formed a political group called FNM (Front National Mauricien) in 2009. Along the line, in 2008, he was part of United Nations mediation in Guinea-Bissau. Gayan also led a 20-member African Union group of observers during the 2010 Rwanda elections.
(iv) Mahamoud Ali Youssouf, in April 2024, was nominated by Djibouti for the position of chairperson. His biography says that between 1985 and 1990, he studied foreign languages at the Lumière University Lyon and then studied business management at the University of Liverpool in the United Kingdom. He was, however, unsuccessful with his thesis at the Université libre de Bruxelles, Belgium.
Nevertheless, as a staunch politician, Youssouf believes that although Djibouti is a small country with a sizable port, his government hopes to develop its economy along the same lines as Dubai. Its strategic location serves as a conduit to the whole world. “I am the only candidate capable of bridging the gap between the different regions of Africa, being French-speaking, but also English-speaking and Arabic-speaking,” said Djibouti’s Youssouf, the 58-year-old has been the foreign minister of the tiny but strategic Horn of Africa nation since 2005. “My primary objective if I am elected is to silence the guns” on the continent, he told AFP in an interview in July.
Employment Implications
Bridging the gap between different regions implies that this AUC leadership will address the development dynamics in the continent. That further emphasizes creating a conducive environment and atmosphere for potential external investors and stakeholders within the geopolitical parameters, a mixed economy, speeding up the most industrialization processes, and working towards technological advancement in Africa. (See African Leaders Extraordinary Summit report, Feb. 2024)
Noticeably the republics of Burkina Faso, Chad, Niger and Mali have established governments, accused their previous political leaders of manipulation by external powers, economic under-developments and the deepening instability (that is un-quantify-able failure to stem the Islamist insurgency) in the Sahel-Saharan region, an elongated landlocked territory located between North Africa (Maghreb) and West Africa, to the Atlantic coast of West Africa.
During a series of summits, conferences and meetings that proliferated these years, the AUC reiterated the continuing growth of multiple democratic challenges with a wider negative impact across the continent and particularly itemized military takeovers that have become a distinctive feature (or accepted norm) of regime change in West Africa. Some experts pointed to the rising neo-colonial tendencies perpetrated by the former colonies and their indiscriminate scramble for resources on the continent. In addition, there are also overarching narratives of growing crisis and explicit signs of weaknesses on the side of regional economic blocs in the continent, to say the least, and appropriately under the direct confines of the African Union.
Researchers have reminded the African Union and the Economic Community of West African States (ECOWAS) to invoke the African Convention for the Elimination of Mercenary, which went into effect in 1985, prohibiting states from allowing mercenaries into their territories. The researcher further called for addressing promptly ‘malign influences’ and ‘political manipulations’, and bringing back the well-designed legislative measure broadly worded by the Assembly of the African Union which adopted as a strategic document known as the “AU Master Roadmap (AUMR) of Practical Steps to Silencing the Guns in Africa” in 2017. (See African Union report, April 2017)
A peaceful continent is possible. This aspiration inspired the ‘Silencing the Guns in Africa’ agenda, a flagship initiative of the AU Agenda 2063 that aspires to end all wars, conflict and gender-based violence, and to prevent genocide. As a long-standing partner, the United Nations Development Programme (UNDP), for instance, has seriously recommitted its partnerships and opportunities to further the Silencing the Guns agenda as a necessary condition for Africa’s transformative development. This focuses on the people, prosperity and peace as a basis for its contributions to AU’s aspirations across Africa, according to the UNDP’s report re-issued in February 2022.
Professor Sergiu Mișcoiu at the Faculty of European Studies, Babes-Bolyai University in Cluj-Napoca (Romania), where he serves as a Director of the Centre for International Cooperation and as Director of the Centre for African Studies, noted in an article to Global Research, that African countries are bound to wake up to a common understanding of the true meaning of their colonial past for the present and determine their future existence. In fact, the leaders and the elites have to engage in development decision-making processes, and at the same time have to play their roles as autonomous actors instead of being pawns in global politics.
Mahamat’s Strengths and Weaknesses
In my view, analyzing most of the media reports and arguments, indicated this year the role is reserved for a representative from East Africa to replace Moussa Mahamat, a veteran politician from the Republic of Chad in West Africa, who has served two terms since 2017. Before taking up this position, he was the foreign minister of Chad. As the history of the procedures indicates, the elected chairperson becomes the head of the African Union Commission. Mahamat, born on 21 June 1960, was for the first time elected as the chairperson on 30 January 2017 but assumed office in March 2017. The chairperson is elected by the Assembly for a four-year term, renewable once. During his eight years of leadership, holding executive powers, needed internal structural reforms that have popularly been called for were not simply carried out, and a record of publicly announced accomplishments grossly lacked probity and transparent accountability.
Despite that as mentioned above, the African Union under Moussa Mahamat has made several achievements including raising the continental external relations profile and its ascension into the Group of Twenty (G20). In September 2023, Prime Minister Narendra Modi of India, chairing the G20 summit, the G20 nations agreed to grant the African Union permanent membership status in an appreciable move aimed at offering the continent a stronger voice on important questions and to uplift its unto the higher stage. In its final declaration in New Delhi, the G20 granted the African Union a full-fledged membership. The G20 consists of 19 countries and the European Union, making up about 85 per cent of the global GDP and two-thirds of the world’s population.
Under the administration of Moussa Mahamat, the African Continental Free Trade Area (AfCFTA), the single continental market has the potential to unite an estimated 1.4 billion people in a $2.5 trillion economic bloc. The AfCFTA opens up more tremendous opportunities for both local African and foreign investors from around the world. It aims at making Africa the largest common market in the world and accelerating continental integration. It is expected to reinforce the measures taken in terms of the free movement of persons, goods, and services across borders. But much depends on the collective determination and solidarity demonstrated, to face the challenges in a united and resolute manner, by the African leaders. It depends on the strong mobilization of African leaders and the effective coordination provided by the African Union.
Essential Leadership Attitudes
In mid-July 2024, Business & Financial Times wrote that the candidates were discreetly campaigning for the top position. The B&FT media indicated further that, despite the general qualification being former foreign ministers, and in the case of Odinga being an experienced politician and readily preferred by the majority of African leaders, some other distinguishing leadership attitude and approach are necessary and required of the candidate. Education is the cornerstone for awareness, but one of the crucial qualities that a leader must possess is the inherent positive notion of servitude, in addition to commitment to the organization’s future aspirations.
As the incoming chairperson prepares to take on the baton, it is important to look forward with optimism, eager to continue making an impact in new ways, within the geopolitical context, and be ready to strategize broadly with key stakeholders and external powers. Pragmatism should be the catch-word while ensuring pragmatic acknowledgement of the potential to drive progress and actionable initiatives. Step away from excessive symbolism and superficial (shallow) influence instead of an invaluable and impactful engagement or relations.
AU is a multilateral body, and in this critical moment for the continent plagued by high youth unemployment, weak institutions and political instability, the new leader must have the spirit of innovation, dynamism and a forward-thinking vision. Professor (Ambassador) Edward Boateng, business executive and politician, in an opinion article, listed some of the criteria for the ideal AU head as follows: (i) Inter-generational bridge: Capability to bridge generational divides within the AU, fostering inter-generational dialogue and including the perspectives of all age groups in policy-making processes.
(ii) Conflict resolution: Strong leadership in addressing conflicts and crises effectively, with a coherent strategy for conflict resolution across the continent.
(iii) Institutional reforms: Commitment to spearheading institutional reforms, enhancing financial sustainability and streamlining decision-making processes to address the AU’s bureaucratic challenges.
(iv) Economic development: Drive economic reforms, attract investment and foster a business-friendly environment to tap into Africa’s vast resources and young population.
(v) Empowerment of women and youth: Promotion of policies that enhance gender equality and provide opportunities for young people to participate in governance and economic activities.
Opening New Chapter
A new chapter characterizing plethoric changes is, however, expected under the next chairperson beginning in March 2025. Arguments for several changes are necessary to make the continental organization work more effectively and produce tangible results especially now within the context of global reconfiguration. Africa is too diverse to fit together. But there are many more interests in uniting the continent. But the political, economic, and cultural diversities have to be transformed into continental strength to ensure development and growth, instead of a noticeable display of weaknesses and passive actions. It is often repeatedly claimed that the African Union needs urgent realistic reforms and some kind of rebranding of its structure as an effective instrument for rapid development, new economic architecture, and substantial growth.
In late January 2024, Rwandan President Paul Kagamé was appointed to lead the AU institutional reforms process. It was an important step towards implementing its institutional reforms, setting the Pan-African organization’s objectives under the leadership of the Heads of State who meet once a year at the Assembly. As Africa faces a multitude and multitude of crises, so also unstoppable debates have dominated inside Africa and on international platforms over the performance of the 55-member organization, its existing challenges, and the way forward in the fast-changing world.
Appropriately four candidates were short-listed for the position based on the fact that East and Southern Africa now have their turn. But at a glance, Odinga seemingly envisions carving out a new distinctive image for the African Union. His high-value knowledge and experiences, corporate business entrepreneurialism combined with pragmatic new economic development thinking would probably save Africa. Narratives too indicated that Odinga would adopt a far-reaching overhauled approach and take unshakable measures toward most significant issues across Africa. These are essential conditions for re-imaging the AU’s future.
An in-depth analysis shows us that there should be four structural directions, in particular, to address by the next AUC chairperson: (1) investment in the economic sphere; (2) increased cooperation in the security field, and; (3) a shared vision of international and regional issues, and (4) on the social and humanitarian sphere. These represent the significant aspects of the Sustainable Development Goals (SDGs) in Africa. Therefore, the AU has to take up the task of developing collective approaches to the problems of maintaining peace and security, strengthening democratic processes, developing human potential, and ensuring socio-economic growth.
In a final summary, the AU’s vision is to accelerate progress, and spearhead development and integration in close collaboration with all members. These are incorporated into a single continental development program often referred to as the AU Agenda 2063.
Professor Maurice Okoli is a fellow at the Institute for African Studies and the Institute of World Economy and International Relations, Russian Academy of Sciences. He is also a fellow at the North-Eastern Federal University of Russia. He is an expert at the Roscongress Foundation and the Valdai Discussion Club. As an academic researcher and economist with a keen interest in current geopolitical changes and the emerging world order, Maurice Okoli frequently contributes articles for publication in reputable media portals on different aspects of the interconnection between developing and developed countries, particularly in Asia, Africa and Europe. With comments and suggestions, he can be reached via email: [email protected].
Dr Ken Onyeali Ikpe is the former Group CEO of Insight Redefini Group, Sub-Saharan Africa’s biggest Marketing Communications & Consumer Consulting Group. He holds a Ph.D and was trained at IESE Business School in Barcelona, Spain.
Not too long ago, streaming in Nigeria was seen as a convenience, an alternative to traditional television, used mostly to catch up on missed shows or explore international content. Today, it has evolved into something far more ingrained. Streaming is now a culture: a daily habit that shapes conversations, influences pop culture, drives fandoms and even dictates how stories are told.
From late-night binge sessions and group watch parties to live-tweeting reality shows and football matches, streaming has become woven into how Nigerians experience entertainment. As mobile devices, smart TVs and affordable data options continue to expand access, the platform has moved from the fringes to the centre of everyday life. In 2026, this cultural shift will become even more pronounced.
Here’s what to expect as streaming continues to evolve in Nigeria and across Africa.
Value Will Define Loyalty in an Overcrowded Streaming Market: As streaming becomes mainstream, Nigerian audiences are becoming more discerning. Subscription fatigue is real, and users are no longer impressed by platforms with limited libraries or infrequent updates.
In 2026, loyalty will belong to platforms that offer sustained value, not just headline titles. This means:
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Deep content libraries that go beyond a handful of popular shows
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A healthy mix of live TV, sports and on-demand entertainment
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Regular content refreshes that keep audiences engaged month after month
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Viewers now understand value, and they will gravitate towards platforms that consistently deliver variety and relevance.
Local Stories Will Drive Cultural Relevance: Streaming has amplified the power of Nigerian storytelling, giving local productions the scale and visibility once reserved for traditional TV. Viewers are showing a clear preference for stories that feel familiar, authentic and culturally grounded.
In Nigeria, titles like Omera, Glass House, Italo, The Real Housewives of Lagos, Nigerian Idol and Big Brother Naija have become shared cultural moments, driving online conversations and real-world buzz. These shows are not just being watched; they are being experienced.
Across the continent, similar patterns are emerging, reinforcing the role of hyperlocal content in building loyalty and identity. In 2026, investment in African creators will remain central to streaming growth.
Streaming Becomes Personal and Predictive: As streaming matures, platforms will increasingly rely on AI to understand viewers on a deeper level. In 2026, Nigerian users can expect:
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More intuitive recommendations tailored to individual tastes
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Smarter content discovery that reduces the time spent searching
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Interactive experiences that respond to viewer behaviour
Beyond content, AI will also enhance advertising relevance and customer support, creating a smoother, more personalised user journey.
Live Sports Will Continue to Anchor Streaming Culture: While binge-worthy series drive daily engagement, live sports remain one of streaming’s biggest cultural anchors. Football, in particular, continues to command passionate followership in Nigeria.
With the 2026 FIFA World Cup scheduled for June–July, live streaming will dominate viewing behaviour once domestic leagues conclude. Nigerian football fans demand quality, reliability and immediacy, making official platforms with full broadcast rights, such as SuperSport, essential destinations during major tournaments.
In 2026, sports will further reinforce the value of legitimate, high-quality streaming experiences.
Security Becomes Non-Negotiable: As streaming cements its cultural relevance, content protection will take on greater importance. Premium sports and entertainment remain prime targets for piracy, but the response is becoming more sophisticated.
Technologies from cybersecurity firms like Irdeto now enable real-time monitoring, rapid takedowns and legal action against illicit streaming networks. These measures protect not just platforms, but creators and the broader creative ecosystem, a critical consideration as local production continues to grow.
Innovation Makes Streaming More Inclusive: One of the most significant shifts in Nigeria’s streaming landscape is how inclusive it has become. Platforms are innovating around:
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Flexible pricing
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Bundled services that combine TV and streaming
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Multi-device access, including mobile-first options
Whether premium or entry-level, users can now find options that suit their lifestyle and budget, reinforcing streaming’s position as an everyday entertainment staple.
A More Conscious Streaming Audience Emerges: As streaming culture matures, so does audience awareness. Nigerian viewers are increasingly able to identify illegal streaming platforms and understand the long-term damage piracy causes to the industry.
In 2026, conscious viewing will continue to gain ground, with users learning to avoid red flags such as “free” premium streams, unofficial apps, VPN-only access and excessive pop-up advertising.
Streaming is no longer simply about watching content, it is about belonging to moments, communities and conversations. In Nigeria, it has evolved into a cultural force that shapes how stories are told, shared and celebrated.
As 2026 unfolds, streaming will continue to thrive at the intersection of technology, culture and creativity, offering entertainment that is accessible, relevant and deeply local.
By Anne Mureithi
Provision of banking services in Africa continues to undergo profound digital transformation where most transactions are conducted virtually via digital devices and cash moved electronically. Mobile banking, fintech innovation, and cross-border digital payments have reshaped how individuals and businesses consume financial services.
In Nigeria and across the continent face, banks face sharp scrutiny from expanding regulatory landscape, including Anti-Money Laundering (AML), combating the financing of terrorism (CFT) and combating the financing of proliferation (CPF) that involves disrupting funds for weapons of mass destruction (WMD) through targeted financial sanctions.
With increased cross border trade, everyone including governments look upon banks to provide Know Your Customer (KYC) services, fraud risk management, and increasingly adhere to stringent data protection and privacy regulations as well as Environmental, Social, and Governance (ESG) reporting standards.
Compliance is no longer a back-office obligation, and this calls for increased investments in technology, particularly Artificial Intelligence (AI) and Machine Learning (ML) to enable banks to meet compliance requirements.
This is important as local traders want a banking partner who offers one-stop shop services on compliance matters. For banks, this is a competitive advantage, a core capability, and a source of differentiation. By embedding compliance into product and process design, banks can meet regulatory obligations efficiently while fostering innovation through a compliance-by-design approach.
In March 2025, the Central Bank of Kenya published the results of a survey on AI adoption in the banking sector, revealing moderate uptake, with 50% of respondents indicating some level of implementation. The survey found that among institutions that had adopted AI and machine learning, the leading applications were credit risk assessment (65%), cybersecurity (54%) and customer service (43%), followed by e-KYC (41%) and fraud risk management (40%).
These findings underscore significant untapped potential for AI to transform customer experience and strengthen risk management, particularly in AML and compliance monitoring. As intra-Africa trade continues to increase, compliance teams within banks must play a leading role in establishing strong governance, ensuring transparency, and preparing institutions for emerging regulatory expectations.
The Central Bank of Kenya has confirmed that it is in the final stages of developing a Guidance Note on Artificial Intelligence, with 95% of surveyed institutions having requested formal regulatory direction. The anticipated principles-based framework will focus on governance, risk management, transparency, and the ethical use of AI, laying the foundation for responsible innovation in the financial sector.
AI and ML models offer practical solutions to compliance challenges by learning and tracking typical behavioural patterns by customer, product, and corridor, flagging anomalies such as unusual counterparties, transaction values, or routing patterns in cross-border flows. These tools can also generate more accurate and complete assessments of ongoing customer due diligence and customer risk, which can be updated to account for new and emerging threats in real time.
By detecting potential violations of normal customer profiles in data or groups of customers with higher-risk characteristics, AI has streamlined priorities towards high-risk cases and reduced the time spent on false positives. This capability is increasingly critical as transaction volumes and complexity grow. Such technological advances transform compliance from a costly obligation into a strategic advantage.
Customers do not need to know one another to execute a transaction since AI-powered identity authenticates customer identity through document scanning, biometric verification and mobile-based identity solutions. These solutions have also enabled banks to onboard new customers remotely without the need to visit a physical bank to fill in registration details.
Accounts are fully secure and only users who pass the mobile-based identity verification are allowed access thereby preventing fraud. This also supports financial inclusion by enabling access to financial services for individuals who struggle to provide adequate identification documents for opening bank accounts.
In addition, Regulatory Technology (RegTech) solutions enable financial institutions to monitor regulatory developments, map obligations across their operations, conduct initial gap assessments, ensure that policies and procedures are always up to date and streamline regulatory reporting.
This capability is particularly valuable for pan-African institutions in ensuring agility while responding to regulatory changes across multiple jurisdictions. With its presence in 34 African countries, Ecobank advocates for harmonised payment systems and regulatory frameworks as a catalyst for accelerating intra-African trade.
Regional regulatory alignment further amplifies these gains. As African regulators work towards greater harmonisation of standards, banks with pan-African footprints are uniquely positioned to bridge local realities with global expectations, enabling smoother cross-border transactions and reducing friction for businesses operating across multiple markets.
The convergence of digital innovation and regulation presents an opportunity to support regional integration and strengthen public confidence. Banks that integrate compliance into their digital strategies, invest in ethical AI, enforce strong governance, and actively engage regulators will be best positioned to compete, facilitate trade, and protect financial integrity.
On an Africa-wide platform, traders from Nigeria want a synchronised platform that provides them with end-to-end solutions. Say Ecobank Group’s AML monitoring and sanctions screening capabilities within its SWIFT payment infrastructure ensure that all cross-border payment messages undergo real-time compliance checks prior to fund settlement.
With increased intra-Africa trade that rides on online platforms, accelerated digitalisation of cross-border transactions, timely, efficient, and secure payment processing is paramount. Real-time compliance monitoring is a non-negotiable cornerstone of safeguarding the integrity of international payment flows.
Ultimately, the future of banking in Africa will be defined by how institutions harness technology to meet regulatory obligations, deter financial crime, and foster trust among businesses, consumers, and public institutions alike. Compliance is no longer a constraint on growth; it is a foundation for sustainable innovation, regional integration, and long-term confidence in Africa’s financial system.
Ms Mureithi is a director in charge of compliance at Ecobank, Central, Eastern and Southern Africa (CESA)
By Blaise Udunze
Nigeria’s economy will be experiencing yet another round of reform; after the new tax implementation, the banking sector recapitalisation exercise will begin within less than three months until the March 31, 2026, deadline. The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, disclosed that 27 banks have tapped the capital market via public offers and rights issues.
The figures show that of 21 the 37 commercial, merchant, and non-interest banks in the country have met or exceeded the revised minimum capital thresholds of N500 billion for internationally authorised banks, N200 billion for national banks, N50 billion for regional banks, and N10-20 billion for non-interest banks. With the developments above, policymakers are betting that stronger balance sheets will help banks withstand macroeconomic shocks, finance growth, and restore confidence in the financial system. On the surface, the logic is sound, capital matters. But history warns us that capital alone is not a cure-all.
Nigeria has been here before, going by the 2004-2005 era of the then-governor of CBN, Charles Soludo, whose banking consolidation dramatically reduced the number of banks from 89 to 25 and created national champions. Yet barely five years later, the system was back in crisis, requiring regulatory intervention, bailouts, and the creation of the Asset Management Corporation of Nigeria (AMCON) to absorb toxic assets. The lesson here is clear, which revealed that recapitalisation that ignores structural weaknesses merely postpones failure.
If the current exercise is to succeed, the CBN must use it not only to raise capital but to repair the deeper fault lines that have long undermined the stability, credibility, and effectiveness of Nigeria’s banking sector.
More Capital isn’t Always Better Capital
The first and most critical issue is the quality of capital being raised. Disclosures made by the banks have shown that the combined capital base of about N5.142 trillion is already locked in by lenders across the different licence categories. Bigger numbers on paper mean little if the capital is not genuinely loss-absorbing. In past recapitalisation cycles, concerns emerged about funds being raised through related parties, short-term borrowings disguised as equity, or complex arrangements that ultimately recycled the same risks back into the system.
This time, the CBN must insist on transparent, verifiable sources of capital. Every naira raised should be traceable, free from conflicts of interest, and capable of absorbing real losses in a downturn. Otherwise, recapitalisation becomes an accounting exercise rather than a resilience-building one.
Why Corporate Governance Remains the Achilles’ Heel
Perhaps the most persistent weakness in Nigeria’s banking sector is corporate governance failure. Many bank crises have not been caused by macroeconomic shocks alone, but by poor board oversight, insider abuse, weak risk culture, and excessive executive power.
Recapitalisation provides a rare regulatory leverage point. The CBN should use it to reset governance standards, not just capital thresholds. Boards must be independent in substance, not just in form. Being one of the critical aspects of the banking challenge, insider lending rules should be enforced without exception. Risk committees in every financial institution must be empowered, not sidelined by dominant executives.
Without the apex bank fixing governance, new capital risks become fresh fuel for old excesses.
The Unresolved Burden of Non-Performing Loans (NPLs)
Data from the CBN’s latest macroeconomic outlook showed that the banking industry’s Non-Performing Loans ratio climbed to an estimated 7 percent, pushing the sector above the prudential ceiling of 5 percent. Nigeria’s banking sector continues to be drowned with high volumes and recurring non-performing loans (NPLs), and this is often concentrated in sectors such as oil and gas, power, and government-linked projects. Though with the trend of events, one may say that regulatory forbearance has helped maintain surface stability in the sector, no doubt it has also masked underlying vulnerabilities.
The truth is that a credible recapitalisation exercise must confront this reality head-on. Loan classification and provisioning standards should reflect economic truth, not regulatory convenience. Banks should not be allowed to carry impaired assets indefinitely while presenting healthy balance sheets to investors and the public.
Transparency around asset quality is not a threat to stability; it is a foundation for it.
How Foreign Exchange Risk Quietly Amplifies Financial Shocks
Few risks have damaged bank balance sheets in recent years as severely as foreign exchange volatility. Many banks continue to carry significant FX mismatches, borrowing short-term in foreign currency while lending long-term to clients with naira revenues.
During periods of FX adjustment, these mismatches can rapidly erode capital, no matter how well-capitalised a bank appears on paper. Recapitalisation must therefore be accompanied by tighter supervision of FX exposure, stronger disclosure requirements, and realistic stress testing that assumes adverse currency scenarios, not best-case outcomes.
Ignoring FX risk is no longer an option in a structurally import-dependent economy.
Concentration Risk and the Narrow Credit Base
Another long-standing weakness is excessive concentration risk. A disproportionate share of bank lending is often tied to a small number of large corporates or government-related exposures. While this may appear safe in the short term, it creates systemic vulnerability when those sectors face stress.
At the same time, the real economy, particularly SMEs and productive sectors, remains underfinanced because, over the years, Nigeria’s banks faced significant concentration risk, particularly in the oil and gas sector and in foreign currency exposure, while grappling with a narrow credit base characterised by limited lending to the private sector. This is due to high credit risk and tight monetary policy. Owing to this trend, recapitalisation should therefore be in alignment with policies that encourage credit diversification, improved credit underwriting, and smarter risk-sharing mechanisms, and not the other way round.
Therefore, it will be right to say that banks that grow larger but remain narrowly exposed do not strengthen the economy; they amplify its fragilities.
Risk Management in a Volatile Economy
The recurring inflation shocks, interest-rate swings, fiscal pressures, and external shocks are frequent features, not rare events, which show that Nigeria is not a low-volatility environment.
Currently, the Nigerian banking sector’s financial performance and investment returns are equally affected by various risks, including credit, liquidity, market, and operational risks.
Today, many banks still operate risk models that assume stability rather than disruption. Time has proven that risk management is essential for mitigating these risks and ensuring stability and profitability.
The apex bank must ensure that the recapitalisation process mandates robust, Nigeria-specific stress testing, and banks must demonstrate resilience under severe but plausible scenarios. This includes sharp currency depreciation, interest-rate spikes and sovereign stress. It must evolve from a compliance function to a strategic discipline.
Transparency and Financial Reporting
Investors, depositors, and analysts must be able to understand banks’ true financial positions without navigating a lack of transparent disclosures or creative accounting. Hence, public trust in the banking sector depends heavily on credible financial reporting.
The CBN should use recapitalisation to strengthen the International Financial Reporting Standard enforcement, disclosure standards, and audit quality. In championing this course, banks’ financial statements should clearly reflect capital adequacy, asset quality, related-party transactions, and off-balance-sheet exposures. Transparency is to enable confidence, not about exposing weakness.
Regulatory Consistency and Credibility
Policy credibility has been one of the greatest challenges for Nigeria’s financial regulators.
Abrupt changes, unclear timelines, and inconsistent enforcement undermine investor confidence and weaken reform outcomes.
Recapitalisation must be governed by clear rules, predictable timelines, and consistent enforcement. Both domestic and foreign investors need assurance that the rules of the game will not change midstream. Regulatory credibility is itself a form of capital.
Consumer Protection and Banking Ethics
While recapitalisation focuses on banks’ balance sheets, the public experiences banking through fees, service quality, dispute resolution, and ethical conduct. Persistent complaints about hidden charges and poor customer treatment erode trust in the system and a stronger banking sector must also be a fairer and more accountable one. It must be noted that strengthening consumer protection frameworks alongside recapitalisation will help rebuild public confidence and reinforce financial inclusion goals.
Too Big to Fail and How to Resolve Failure
Looking at what is obtainable in the system, larger, better-capitalised banks can also become systemically dangerous if failure resolution frameworks are weak. This requires that recapitalisation should therefore be accompanied by credible plans for resolving distressed banks without destabilising the entire system or resorting to taxpayer-funded bailouts, which has been the norm in the Nigerian banking sector today. The cynic might say that recapitalisation simply made big banks bigger and empowered dominant shareholders. However, a more prospective approach invites all 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.
Clear resolution mechanisms reduce moral hazard and reinforce market discipline.
A Moment That Must Not Be Wasted
Recapitalisation is not merely a financial exercise; it is a governance and trust reset opportunity. If the CBN focuses solely on capital numbers, Nigeria risks repeating a familiar cycle of apparent stability followed by crisis.
The banking sector can lay a solid foundation that truly supports economic transformation if recapitalization is used to address governance failures, asset quality, FX risk, transparency, and regulatory credibility.
Nigeria does not just need bigger banks. It needs better banks, institutions that are resilient, transparent, well-governed, and trusted by the public they serve. Hence, it must be a system that creates a more robust buffer against shocks and positions Nigerian banking as a global competitor capable of funding a $1 trillion economy, as the case may be.
This recapitalisation moment must be about building durability, not just size. The cost of missing that opportunity would be far greater than the cost of getting it right.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
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