By Blaise Udunze

The Central Bank of Nigeria’s recapitalisation exercise, which is scheduled for a March 31, 2026, deadline, has continued to reignite optimism across financial markets and is designed to build stronger, more resilient banks capable of financing a $1 trillion economy. With the ongoing exercise, the industry has been witnessing bank valuations rising, investors are enthusiastic, and balance sheets are swelling. However, beneath these encouraging headline numbers, unbeknownst to many, or perhaps some troubling aspects that the industry players have chosen not to talk about, are the human cost of consolidation and the infrastructure deficit.

Recapitalisation often leads to mergers and acquisitions. Mergers, in turn, almost always lead to job rationalisation. In Nigeria’s case, this process is unfolding against an already fragile labour structure in the banking industry, one where casualisation has become the dominant employment model.

One alarming fact in the Nigerian banking sector is the age-old workforce structure raised by the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), which says that an estimated 60 percent of operational bank workers today are contract staff. This reality raises profound questions about the sustainability of Nigeria’s banking reforms and the credibility of its economic ambitions.

A $1 trillion economy cannot be built on insecure labour, shrinking institutional knowledge, and an overstretched financial workforce.

Recapitalisation and the Hidden Merger Trap

History is instructive. Referencing Nigeria’s 2004-2005 banking consolidation exercise, which reduced the number of banks from 89 to 25, and no doubt, it produced larger institutions, while it also triggered widespread job losses, branch closures, and a wave of outsourcing that permanently altered employment relations in the sector. The current recapitalisation push risks repeating that cycle, only this time within a far more complex economic environment marked by inflation, currency volatility, and rising unemployment.

Mergers promise efficiency, but efficiency often comes at the expense of people. Speaking of this, duplicate roles are eliminated, technology replaces frontline staff, and non-core functions are outsourced. The troubling part of it is that this is already a system reliant on contract labour; mergers could accelerate workforce instability, turning banks into balance-sheet-heavy institutions with shallow human capital depth.

ASSBIFI’s warning is therefore not a labour agitation; it is a macroeconomic red flag.

Casualisation as Structural Weakness, Not a Cost Strategy

It has been postulated by proponents of job casualisation that it is a cost-control mechanism necessary for competitiveness. Contrary to this argument, evidence increasingly shows that it is a false economy. In reaction to this, ASSBIFI President Olusoji Oluwole, who kicked against this structural weakness, asserted that excessive reliance on contract workers undermines job security, suppresses wages, limits access to benefits and blocks career progression while affirming that over time, this erodes morale, loyalty, and productivity.

More troubling are the systemic risks. Casualisation creates operational vulnerabilities, higher fraud exposure, weaker compliance culture, and lower institutional memory.

One of the banking regulators, the Nigeria Deposit Insurance Corporation (NDIC), has not desisted from repeatedly cautioning that excessive outsourcing and short-term staffing models increase security risks within banks. On the negative implications, when employees feel disposable, ethical commitment weakens, and reputational risk grows.

Banking is not a factory floor. It is a trust business. And trust does not thrive in insecurity.

Inside Outsourcing Web of Conflict of Interest

Beyond cost efficiency, Nigeria’s casualisation crisis is also fuelled by a deeper governance problem, conflicts of interest embedded within the outsourcing ecosystem.

In many cases, bank chief executives and executive directors are reported to own, control, or have beneficial interests in outsourcing companies that provide services to their own banks. Invariably, it is the same firms supplying contract staff, cleaners, security personnel, call-centre agents, and even IT support. Structurally, this arrangement allows senior executives to profit directly from the same outsourcing model that strips workers of job security and benefits.

The incentive is clear. Outsourcing enables banks to maintain lean payrolls, bypass strict labour protections associated with permanent employment, and reduce long-term obligations such as pensions and healthcare. But when those designing outsourcing strategies are also financially benefiting from them, the line between efficiency and exploitation disappears.

This model entrenches casualisation not as a temporary adjustment tool, but as a permanent business strategy, one that externalises social costs while internalising private gains.

Exploitation and Its Systemic Consequences

The human impact is severe because the contract staff employed through executive-linked outsourcing firms often face poor working conditions, low wages, limited or no health insurance, and zero job security, which is demotivating. Many perform the same functions as permanent staff but without benefits, voice, or career prospects.

ASSBIFI has warned that prolonged exposure to such insecurity leads to psychological stress, declining morale, and reduced productive life years. Studies on Nigeria’s banking sector confirm that casualisation weakens employee commitment and heightens anxiety, conditions that directly undermine service quality and operational integrity.

From a systemic standpoint, exploitation feeds fragility. High staff turnover erodes institutional memory. Disengaged workers weaken internal controls. Meanwhile, this should be a sector where trust, confidentiality, and compliance are paramount; this is a dangerous trade-off if it must be acknowledged for what it is.

Why Workforce Numbers Tell a Deeper Story

It is in record that as of 2025, Nigeria’s banking sector employs an estimated 90,500 workers, up from roughly 80,000 in 2021. The top five banks today, such as Zenith, Access Holdings, UBA, GTCO, and Stanbic IBTC, account for about 39,900 employees, reflecting moderate growth driven by digital expansion and regional operations.

At face value, truly, these figures suggest resilience. But when viewed alongside the 60 percent casualisation rate, they paint a different picture, revealing that employment growth is without employment quality. A workforce dominated by contract staff lacks the stability required to support long-term credit expansion, infrastructure financing, and industrial transformation.

This matters because banks are expected to be the engine room of Nigeria’s $1 trillion economy, funding roads, power plants, refineries, manufacturing hubs, and digital infrastructure. Weak labour foundations will eventually translate into weak execution capacity.

Nigeria’s Infrastructure Financing Contradiction

Nigeria’s infrastructure deficit is estimated in the hundreds of billions of dollars. Power, transport, housing, and broadband require long-term financing structures, sophisticated risk management, and deep sectoral expertise. Yet recapitalisation-induced mergers often lead to talent loss in precisely these areas.

As banks consolidate, specialist teams are downsized, project finance units are merged, and experienced professionals exit the system, either voluntarily or through redundancy. Casual staff, by design, are rarely trained for complex, long-term infrastructure deals. The result is a contradiction, revealing that larger banks have bigger capital bases but thinner technical capacity.

Without deliberate workforce protection and skills development, recapitalisation may produce banks that are too big to fail, but too hollow to build.

South Africa Offers a Useful Contrast

South Africa offers a revealing counterpoint. As of 2025, the country’s “big five” banks, such as Standard Bank, FNB, ABSA, Nedbank, and Capitec, employ approximately 136,600 workers within South Africa and about 184,000 globally. This is significantly higher than Nigeria’s banking workforce, despite South Africa having a smaller population.

More importantly, South African banks maintain a far higher proportion of permanent staff. While outsourcing exists, core banking operations remain firmly institutionalized compared to the Nigerian banking system. For this reason, South Africa’s career progression pathways are clearer, labour regulations are more robustly enforced, and unions play a more structured role in workforce negotiations.

The result is evident in outcomes. South Africa’s top six banks are collectively valued at over $70 billion, with Standard Bank alone boasting a market capitalisation of approximately $30 billion and total assets nearing $192 billion. Nigeria’s top 10 banks, by contrast, held combined assets of about $142 billion as of early 2025, even with a much larger population and economy, and its 13 listed banks reached a combined market capitalisation of about N17 trillion ($11.76 billion at an exchange rate of N1,445) in 2026.

Though this gap is not just about capital. It is about institutional depth, workforce stability, and governance maturity.

Bigger Valuations, But a Weaker Foundations?

Nigeria’s 13 listed banks reached a combined market capitalisation of about N17 trillion in 2026. It is no surprise, as it is buoyed by investor anticipation of recapitalisation and higher capital thresholds. Yet market value does not automatically translate into economic impact. Without parallel investment in people, systems, and long-term skills, valuation gains remain fragile.

South Africa’s experience shows that strong banks are built not only on capital adequacy, but on human capital adequacy. Skilled, secure workers are better risk managers, better innovators, and better custodians of public trust.

Labour Law and its Regulatory Blind Spots

ASSBIFI’s call for a review of Nigeria’s Labour Act is timely, and this is because the current framework lags modern employment realities, particularly in sectors like banking, where technology and outsourcing have blurred traditional employment lines. Regulatory silence has effectively legitimised casualisation as a default model rather than an exception.

The Central Bank of Nigeria cannot afford to treat workforce issues as outside its mandate. Prudential stability is inseparable from labour stability. Regulators must begin to view excessive casualisation as a risk factor, just like liquidity mismatches or weak capital quality.

Recapitalisation Without Inclusion Is Incomplete

If recapitalisation is to succeed, it must be inclusive; therefore, the industry must witness the enforcement of career path frameworks for contract staff, limiting the proportion of outsourced core banking roles, and aligning capital reforms with employment protection. It also means recognising that labour insecurity ultimately feeds systemic fragility.

South Africa’s banking sector did not avoid consolidation, but it managed it alongside workforce safeguards and institutional continuity. Nigeria must do the same or risk building banks that look strong on paper but crack under economic pressure.

True Measure of Reform

Judging by the past reform in 2004-2005, it has shown that Nigeria’s banking recapitalisation will be judged not by the size of balance sheets, but by the resilience of the institutions it produces. As part of the recapitalisation target for more resilient banks capable of financing a $1 trillion economy, it demands banks that can think long-term, absorb shocks, finance infrastructure, and uphold trust. None of these goals is compatible with a workforce trapped in perpetual insecurity.

Casualisation is no longer a labour issue; it is a national economic risk. If mergers proceed without deliberate workforce stabilisation, Nigeria may end up with fewer banks, fewer jobs, weaker institutions, and a slower path to prosperity.

The lesson from South Africa is clear, as it shows that strong banks are built by strong people. Until Nigeria’s banking reforms fully embrace that truth and the missing pieces are addressed, recapitalisation will remain an unfinished project. and the $1 trillion economy, an elusive promise.

Blaise, a journalist and PR professional, writes from Lagos, can be reached via: [email protected]

By Prince Charles Dickson PhD

In Nigeria, the road has become a stage where power performs its most absurd theatre. The siren—once a tool of emergency—now plays the soundtrack of ego. The convoys, longer than a bride’s procession, louder than a market quarrel, move through our streets like small invading armies. And every time that blaring, violent sound slices through the air, a simple truth echoes behind it: one day monkey go go market… and e no go return.

Because power, especially Nigerian power, has a short memory. And even shorter patience.

These leaders who move as though the sun itself must pause when they pass were once ordinary Nigerians. They once queued at bus stops, once waited under the rain for taxis, once navigated potholed streets with the same caution as every other citizen trying not to die by negligence. But somewhere between election and inauguration, ambition and arrogance, something snapped. Their feet left the ground. Their humanity blurred. And their ears, now accustomed to sirens; forgot how silence feels.

The bizarre culture of convoys in Nigeria has metastasized into something theatrical, violent, and deeply offensive. What began as protocol has become performance. Sirens scream not just to clear the road, but to announce hierarchy. Vehicles speed not just to meet schedules but to demonstrate superiority. And the citizens, the people in whose name this power is supposedly held, scatter like startled chickens. Or worse, end up dead under tires that never brake.

The irony is painful. The same leaders who demand absolute obedience from citizens once walked among those same citizens unnoticed. Once upon a time they lived without outriders, without black-tinted SUVs, without pickup vans carrying heavily armed security men who point guns at commuters as though Lagos traffic is a battlefield. They were once people. Now they behave like a species apart.

But the road remembers. The people remember. And power always forgets that it is a tenant, never a landlord.

Escorts in Nigeria don’t just move with urgency; they move with intimidation. They shove, push, threaten, and roar through roads where ordinary Nigerians are merely trying to survive the day. The siren becomes a weapon, the convoy a declaration of dominance. The message is clear: “Your life must move aside. My importance is passing.”

In what country should this be normal?

Even emergency vehicles; ambulances carrying dying patients, fire trucks racing to burning buildings, sometimes cannot pass because a government official’s convoy has occupied the road with the entitlement of royalty.

This isn’t governance; it’s theater of the absurd.

And the casualties are not metaphorical. Nigerians have died—pregnant women hit by convoys, okada riders knocked off the road, children flung away like debris. Drivers in these convoys behave like warhorses let loose, sworn not to slow down regardless of what or who is ahead.

But who will hold them accountable? Who dares question power that sees questions as disrespect and disrespect as rebellion?

The institutions meant to regulate these excesses are the same institutions that created them. Protocol offices treat speed like divinity. Security details mistake aggression for duty. Schedules are treated as holy commandments. Every meeting becomes urgent. Every movement becomes life-or-death. Every road must clear.

But the truth sits quietly behind all this noise: no meeting is that important, no leader is that indispensable, and no road should require blood to make way.

Somewhere, a child grows up believing public office means public intimidation. A young man sees the behavior of convoys and dreams not of service but of dominance. A young woman imagines that leadership means never waiting in traffic like the rest of society. And so, the cycle of arrogance reproduces itself. A country becomes a laboratory where entitlement multiplies.

In Nigeria, the convoy culture reveals a deeper sickness: a leadership class that has disconnected from the lived realities of the people they claim to govern.

When did proximity to power become justification for violence?

When did schedules become more sacred than lives?

When did we normalize leaders who move like emperors, not elected representatives?

But more importantly: how do these leaders forget so quickly where they came from?

Many of them grew up in the same chaos their convoys now worsen. They once asked why leaders were insensitive. Now they have inherited the same insensitivity and advanced it.

The convoy is more than metal and noise. It is a metaphor. It illustrates how Nigerian governance often operates: pushing the people aside, demanding unquestioned obedience, prioritizing position over responsibility.

And yet, the proverb whispers:

One day monkey go go market… e no go return.

Not because we wish harm on anyone, but because history has its own logic. Power that forgets compassion eventually forgets itself. Leadership that drives recklessly, morally, politically, and literally—will one day crash against the boundaries of public patience.

This metaphor is a quiet mirror for every leader who believes their current status is divine permanence. One day, the sirens will go silent. The tinted windows will roll down. The outriders will be reassigned. The road will no longer clear itself. Reality will return like harmattan dust.

And then the question will confront them plainly:

When your power fades, what remains of your humanity?

The tragedy of Nigeria’s convoy culture is that it makes leadership look like tyranny and renders citizens powerless in their own country. It fosters a climate where ordinary people live in perpetual startle. It deepens distrust. It fuels resentment. It reinforces the perception that leadership is designed to intimidate rather than serve.

And what does it say about us as a nation that we accept this?

We accept the absurdity because we assume it cannot be overturned. We accept arrogance because we assume it is the price of power. We step aside because we assume there is no alternative.

But nations are not built on assumptions. They are built on accountability.

The temporary nature of political power should humble leaders, not inflate them. Four or eight years or whatever time they spend clinging to office cannot compare to the lifetime they will spend as private citizens once the convoys disappear.

When the noise stops, will they walk among us head high or with their face hidden?

When the sirens lose their voice, will they find their own?

What if true leadership was measured not by how loudly you move through society but by how gently you walk among the people?

Imagine a Nigeria where power travels quietly. Where convoys move with the dignity of service, not the violence of entitlement. Where leaders move with humility, not hysteria. Where the streets do not tremble at the approach of authority. Where citizens do not shrink to the roadside, waiting to survive the thunder of tinted SUVs.

It is possible. It is necessary. It begins with leaders remembering that every journey through Nigeria’s roads is a reminder of their accountability, not their dominion.

Because one day, and it will come—monkey go go market.

The convoy will stop.

The siren will fade.

The power will dissolve into yesterday.

And the road will ask the only question that matters:

While you passed through, did you honor the people… or terrorize them?

History will remember the answer.

And so will we—May Nigeria win!

By Blaise Udunze

The Olayemi Cardoso-led Central Bank of Nigeria’s 24-month compliance timeline for the recapitalization of Nigeria’s banking system is about to conclude on March 31, 2026, which is framed as an unavoidable solution to systemic fragility, weak balance sheets, and the demands of a larger, more complex economy. Bigger capital, regulators argue, will produce stronger banks. Though First Bank may have met the CBN’s N500 billion minimum requirement, the latest financials from Femi Otedola-led First HoldCo Plc, which is the parent of Nigeria’s oldest commercial bank, offer a sobering counterpoint, revealing that capital alone cannot cure structural weakness, governance failure, or deep-rooted risk management flaws. If capital is the answer, what exactly is the problem?

What is truly astonishing to many is that beneath the headline growth in earnings lies a financial institution struggling with collapsing earnings quality, surging credit impairments, volatile fair-value exposures, and rising operating inefficiencies. First HoldCo’s numbers are not merely a company-specific disappointment; they are a mirror reflecting the deeper fault lines within Nigeria’s financial system and a warning that recapitalisation, in its current form, risks becoming another cosmetic reset rather than a genuine reform.

On the surface, the topline appears encouraging. The figures showed that gross earnings rose by 17.1 percent to N2.64 trillion in the nine months to 2025, while interest income surged by over 40 percent to N2.29 trillion. Figuring it out, investors, depositors, and analysts understand that these figures, however, are largely the product of a high-interest-rate environment driven by aggressive monetary tightening. They reflect repricing, not necessarily improved lending quality or superior balance-sheet strength. In an economy under strain, rising interest income often signals the transfer of macroeconomic stress from borrowers to banks, rather than sustainable growth.

This becomes evident once attention shifts from revenues to profitability. The performance disclosed that profit before tax declined by 7.3 percent to N566.5 billion, while profit after tax fell nearly 13 percent to N458 billion. Earnings per share dropped by a steep 27.7 percent, a sharper decline than headline profit suggests, pointing to dilution pressures and reduced value accruing to shareholders. More striking still is the full-year picture, where profit after tax from continuing operations collapsed by about 92 percent, plunging to N52.7 billion from N663.5 billion in the prior year. Such a dramatic fall cannot be explained by temporary volatility; it is the consequence of long-suppressed risks finally surfacing.

The most damaging of these risks is asset quality. The most critical figure is the impairment charges that rose by nearly 69 percent in the nine months to N288.9 billion, and by over 75 percent on a full-year basis to N748 billion, and invariably, these numbers tell a story of borrowers buckling under FX exposure, weak cash flows, and a deteriorating operating environment. They also raise uncomfortable questions about credit underwriting standards, concentration risk, and the effectiveness of internal risk controls in earlier lending cycles. After impairments, much of the benefit from higher interest income evaporated, exposing the fragility of earnings built on stressed credit.

Compounding this weakness was a sharp reversal in fair-value accounting. First HoldCo recorded a net loss of N87 billion on financial instruments measured at fair value, a stark contrast to the N549 billion gain recorded a year earlier. Due to this outcome, larger chunks of shareholders’ value were wiped out because this single swing accounted for a negative variance of over N636 billion year-on-year.

The episode highlights a dangerous dependence on market revaluations and FX-driven gains to prop up earnings, as seen that the moment conditions turn, paper profits vanish just as quickly, raising questions about the transparency, sustainability and economic substance of reported results.

Non-interest income provided little cushion. In the nine months to 2025, it declined by 44.5 percent, falling from N618.7 billion to N343.7 billion. While net fees and commission income rose by about 25 percent, the increase was too small to offset the collapse in other income lines. The result is a revenue base that is narrow, volatile, and overly exposed to market swings. Recapitalising banks without addressing this lack of income diversification simply amplifies vulnerability.

At the same time, operating costs surged. Operating expenses climbed by nearly 40 percent to N942.7 billion, while other operating expenses jumped over 43 percent on a full-year basis. Inflation, FX depreciation, energy costs, and technology spending all played a role, but the deeper issue is efficiency. Costs are rising far faster than sustainable income, eroding margins and weakening internal capital generation at precisely the moment banks are being asked to shore up capital buffers. Injecting fresh capital into institutions with broken cost structures does not resolve inefficiency; it merely postpones the inevitable days.

These financial stresses revive longstanding concerns about governance and risk culture in Nigeria’s banking system. Large impairment charges and valuation reversals do not emerge overnight. They accumulate through years of weak credit governance, excessive sector and obligor concentration, insider-related exposures, inadequate stress testing, and regulatory forbearance. Recapitalisation does not answer the most important questions: who gets credit, how risks are approved, how boards exercise oversight, and whether management is truly accountable. Without reform in these areas, more capital simply provides a thicker cushion for future losses.

Foreign exchange risk remains the system’s most dangerous and least resolved fault line. Currency devaluation inflates asset values and boosts interest income on paper, while simultaneously crushing borrowers with FX-denominated obligations. Banks may book translation or revaluation gains even as credit quality deteriorates beneath the surface. This contradiction fuels earnings volatility and undermines confidence in financial reporting. A stronger capital base does not neutralise FX mismatch risk; only disciplined risk management, credible macro policy, and transparent reporting can.

Perhaps most troubling is what First HoldCo’s results imply about regulatory credibility. Many of the impairments and valuation losses reflect risks that were visible long before they crystallised in the income statement. When losses arrive suddenly and in clusters, concerns from different quarters are raised and markets begin to question whether supervision is proactive or merely reactive. Recapitalisation without restoring trust in regulatory oversight risks being interpreted as an admission that deeper problems remain unaddressed and by extension, this erodes trust in the system and a stronger banking sector must also be a fairer and more accountable one.

Nigeria has travelled this road before. Bigger banks and higher capital thresholds have previously delivered reassuring headlines, only for familiar weaknesses to resurface in new forms. First HoldCo’s numbers demonstrate that capital adequacy, while necessary, is far from sufficient. Without the CBN confronting governance failures, asset quality deterioration, concentration risk, FX exposure, transparency gaps, and weak risk culture, recapitalisation risks will become another exercise in delay rather than reform.

The uncomfortable truth is that real stability requires more than fresh equity. It demands honest loss recognition, credible financial reporting, disciplined credit practices, diversified income streams, and regulators willing to enforce standards consistently. Until these missing pieces are addressed, recapitalisation will remain what it too often has been in Nigeria’s financial history, as a larger buffer for the same old problems, and a temporary comfort masking unresolved fragilities.

Blaise, a journalist and PR professional, writes from Lagos, can be reached via: [email protected]