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: ma***********@***il.com.
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.
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.
