Feature/OPED
Liberated Africa: Pathways to Self-Transformational Development
By Ehiedu Iweriebor
In the period since independence in the 1950s, Africa has undergone profound social, cultural, economic and political changes. Some inherited and historically rootless colonialist political and social systems have collapsed, been transcended and reconstituted. Different political systems – single party rule, personal rule and military governments have come and gone. New post-independence political and social systems; economic institutions, professional associations and labour unions, various types – traditional and new and varied cultural expressions have all emerged. Creative efforts to foster effective nation-building, develop a sense of belonging and manage diversity productively have also been made. New political systems, different forms of electoral democracy and democratic government; political parties and groups, varied social and intelligentsia organizations, confident youth groups, civil society organizations are also emerging. Disruptive and traumatic political and social crises have occurred. These include civil wars, secessionist wars, famines, elite generated manipulative ethnicity and deadly intergroup conflicts, and recently home grown and imported religious terrorism and their destructive wars, spectacular damaging actions, the creation of refugees and internally displaced peoples and the generation of general feelings of insecurity.
Social development institutions like health and educational facilities that barely existed under colonialism have been built. For example, vast numbers of schools at all levels including universities and other tertiary institutions – conventional and specialized have been established and dot various parts of Africa. They have produced millions of educated Africans as never existed before in African history. New physical infrastructures: roads, railways, water ways and airports have been built. This is a rough profile of profound changes in Africa since the 1950s.
However, given Africa’s size and vast unmet human, social and economic needs there is no question that substantial as what has been built is, the extant physical and social infrastructures are not adequate or abundant enough.
At the same time, it is quite clear that the physical and social landscapes of Africa today are vastly different from what they were 60 years ago such that it is unlikely that people from those times will recognize Africa of today.
Yet it is also true that there are some aspects of African realities that have not changed substantively or for the better during this period because Africa did not regain, recover or assert its ownership and use of its autonomous self-direction capacities in some spheres over the past six decades. These are primarily in the areas of economic sovereignty, development capacitation, self-actuated development and ideological self-direction. This failure is manifested in such conditions as persistent underdevelopment, the pre-eminence of primary commodities production and export in its economic interactions with the world, import dependency, development incapacitation and poverty generation. It is also manifested in Africa’s ideological subordination to external diktat through the acceptance and implementation of the economic management dogmas and prescriptions of the multilateral imperialist agencies – the World Bank, IMF and similar bilateral external agencies. These prescribed non-development dogmas include: privatization, deregulation and African states self-withdrawal from promoting socio-economic development and the simultaneous promotion of the ascendancy of “MARKET FORCES, FOREIGN INVESTORS, FOREIGN DIRECT INVESTMENTS and FOREIGN TECHNOLOGY TRANSFER ” as the primary and indispensable engines of African economic growth.
The forceful application of these disempowering dogmas through the active complicity of psychologically programmed and ideologically defeated African leaders and elite over the past three decades has yielded or in fact consolidated Africa in its status as under- developed, under-equipped and incapable of development self-propulsion. With African economies arrested in primary commodity export and the mass importation of manufactured goods they are mired in the same exocentric rut and this inevitably results in the export of jobs and import of poverty, therefore recurrent poverty-generation.
This condition and its persistence over this period suggest that IT CANNOT BE RESOLVED WITHIN ITSELF. It has to be transcended by African strategies of psycho-cultural recovery and development capacitation. Psycho-cultural recovery will entail the self-conscious efforts of liberated Africans to peel off the layers of self-deceit, self-delusion, psycho-ideological incapacitation, diminution of African self-worth, self-marginalization of African agency in African development. It would also require the expurgation from African leaderships and elite of their worshipful dependence on outsiders and preference for all things foreign including pre-fabricated solutions that have been introduced into Africa as dogmas of disempowerment and mechanisms of control from the slave trade era to the present. In its various incarnations, African disempowerment was partially procured through various seemingly neutral but ultimately destructive external ideological constructs such as “Christianization”, “Islamization”; European “Civilization” during the colonial era; “Modernization” in the neo-colonial period after independence and its latest expression, as multilateral imperialist “globalism” and dictatorial globalization that ideologically and politically dictates a single, global capitalist and liberal democratic system as the only “approved” economic, political and social and order for all times. This would be composite world of the rich and powerful, and the weak and powerless with Africa at the top.
But all these disempowering political, social, cultural and economic constructs and systems of domination were politically and self-consciously created by organized and mission-driven national and racial elites pursuing the objectives of group ascendancy and global domination. They are not divine constructs imposed on the world. In the same way, liberated Africans can self-consciously choose and work to exit from this state of UNFREEDOM AND INDIGNITY by dismantling and reconstituting the extant world order (as Asians have done) and chose to create and enter the realms of FREEDOM AND SELF-DIRECTION through development capacitation, psychological liberation, cultural recuperation, mental freedom and self-actuated development so as to emerge as powerful participants in the world system as actors not subjects. This is the liberatory imperative.
In order for Africa to assume responsibility for its own transformation and elevation, and be able to undertake self-reliant development and create secure domestic prosperity, it has to create its own specific ideology and strategy of self-development. To do this there are a number of irreducible components that have to be designed and put in place. These are: the recovery and application of African agency in African development, the creation of the liberated African state, establishment of an African development capacitation system, the creation and dissemination of the Affirmative Africa Narrative and African comprehensive military empowerment.
The Centrality of African Agency in African Development
The first requirement of this liberated development strategy and process is the emplacement of African Agency at the centre of African thought and action as the primary psycho-cultural foundation, ideological premise and endogenous propellant for Africa’s self-actuated development. In this context African Agency is the endogenously created psycho-cultural software embedded in societies with which African societies train, organize, motivate, self-activate and direct themselves to accomplish desirable ends individually and collectively. It is the absolute psycho-cultural grounding and ideological ownership of the African project devoid of compromises to any external imperatives. African Agency is grounded on the supremacy of African endocentric thought and motive-forces as the propellants of development as a self-directed imperative.
Without contemporary Africans’ psychological internalization of this understanding and ownership of their development vision and their assumption of complete responsibility for self-actuated development, African societies will remain dependent, underdeveloped and insecure. Therefore the new liberated Africa vision must recognize the absolute necessity of the restoration of African Agency to primacy for any successful African actuated process of transformation. This new perspective is critically important because it has to be realized that one of the major challenges and primary impediment to Africa’s development since independence in the 1960s has been the absence of African Agency in African development as the directive force. This was due to the concerted and largely successful efforts of external multilateral imperialist forces (posing as omniscient advisers) working with psycho-ideologically unprepared and even naive African collaborator-leaders to promote exocentric authority and the corresponding marginalization, diminution and de-activation of African Agency in African development. Consequently, without the unquestioned ascendancy, centrality and directive role of African Agency, African development understood as Africans’ self-equipment for total liberation and radical transformation can never occur.
The Liberated African State
Second, is the imperative of the creation of a new Liberated African State through the rigorous ideological cleansing, psychological re-empowerment and administrative reconstruction of the contemporary politically compromised and disabled neo-colonial African states that are more representative of external forces than national interests.
The decolonization of the colonial African state and the evolution and emergence of the liberated state after independence was disrupted in the 1980s when most African states were captured and disabled by the cancerous ideologies, dogmas and prescriptions of the multilateral imperialist agencies – the World Bank and the IMF and their bilateral supporters in the context of the economic crises of the late 1970s and early 1980s. Embodied in various formulations and policy diktats such as the Structural Adjustment Programme (SAP), and its unvarying conditionalities: currency devaluation, subsidy removal, trade liberalization and others like deregulation, privatization, poverty reduction; these prescriptions have transformed African states into disabled, compromised, neo-colonial political-administrative contraptions that are responsible to neo-imperialist multilateral institutions and not to Africans. They therefore cannot serve Africa’s interests
This is why it is imperative to create the new Liberated African state. It will be a strong and interventionist developmental state. Its raison d’ etre would be the representation and promotion of national interests. This Liberated African state will be grounded on the affirmation and militant expression of its untrammeled sovereignty; and the absolute non-compromise of national interests to any external agencies, formulations, dogmas and imperatives. It would self-consciously assume and assert uncontested ideological ascendancy. In fact the new liberated state will represent the completion of the decolonization of the African states and the emergence of truly endogenous states. It is only such Liberated African developmental states that can lead to the realization of the African citizens’ expectations for defence and protection, advanced development, material prosperity and freedom from want and colonialist philanthropy, psychological security and empowerment, dignity and equity with all other groups in the world.
The African Development Capacitation System
The third critical requirement is the development and placement of an African Development Capacitation System as the primary motive-force for Africa’s social and economic transformation and creation of advanced societies. This is proposed against the background of the complete failure of the extant neo-colonial economic system inherited and maintained from colonialism. In over five decades of its use and application as the dominant economic management system and growth strategy it has yielded and maintained Africa in a state of development incapacitation, primary commodity exportation, secondary goods importation, dependency, poverty generation, incapacity for self-propulsion, and subjection to the diktat and control of multilateral imperialist agencies – the World Bank and IMF. It is quite clear that the extant exocentric economic system with its development motive forces externally situated is organically defective, un-reformable and inherently incapable of propelling Africa to the highest levels of development.
Therefore in order for Africa to develop and achieve the highest levels of human development it has to own the instruments and systems of self-actuated development. This perspective is partly based on this author’s succinct definition of Development – as a society’s self-equipment with the resources and capacities for its self-reproduction. Consequently, the African Development Capacitation system is the creation and existence within all African societies of the endogenous capacities to conceive, design, construct, manage and operate projects in ALL sectors of the economy. These include the technological, scientific, managerial and operational capabilities for all facets of modern industrial and agricultural production and development self-propulsion.
Practically, the components of the development capacitation system include the domestic possession and ownership of the following capacities: Project Conception and Design capabilities; Technological Production Capacity or Capital Goods Industries comprising : Engineering Industries for the manufacture of all types and levels of machine tools, industrial machinery and equipment, transport equipment, electrical and power equipment; electronic and professional tools and equipment. Intermediate Goods Industries (Metals, Heavy Chemicals, Petrochemicals, Paper, Rubber etc); Civil Engineering Construction Capabilities for large, medium and small scale projects; and Project management and operation and supervision Capabilities.
This endogenous development capacitation system is found in all successful global examples of societal self-development as the prime movers of any society’s self-actuated transformation from conditions of UN-FREEDOM: material underdevelopment, mass poverty, indignity and colonialist philanthropy to new empowered conditions of FREEDOM: expressed as self-created material abundance and prosperity, psycho-cultural confidence and dignified existence. This is practically expressed in mass industrialization, modernized mass agricultural production, mass mineral exploitation and beneficiation primarily for domestic use; mass employment, mass prosperity generation; cultural elevation, self-actuation, self-agency, human dignity and societal power. This is in effect the enthronement of the strategy and process of endocentricity and its ineluctable creation and production of a state of development.
The Affirmative Africa Narrative
The fourth basic requirement is the creation and permanent dissemination of a self-elevating paradigm or narrative to be known as the Affirmative Africa Narrative. Currently there is no global African created narrative that conceives, presents, projects and widely propagates a truthful, complex and elevating narrative of Africa and Africans. In its absence there exists a universal externally fabricated, pervasive and routinely propagated perverse perspective on Africa that I describe as the Pathological Africa Narrative. This narrative which evolved from the era of the European slave trade; was expansively propagated and consolidated during colonialism and has been fine-tuned and expanded since independence to the present to include other foreign propagators like Asians and even Africans. It presents an image and impression; perception and narrative of Africa as a world of deficits, lack, deprivation, absence, danger, disease, inaction, native incapacity, immobility and a basket charity case that is rescueable only by the self-assigned salvationary efforts of Western multilateral imperialist agencies – World Bank and IMF – their dogmas, experts and prescriptions. This Pathological Africa Narrative is not only inaccurate but it is also dangerous and damaging as it represents the software of African self-denigration, servility, surrender and incapacitation.
In order to pursue the vision of liberated Africa it is imperative to create and propagate the Affirmative Africa Narrative. This would be a robust and unapologetic statement of African accomplishments in all areas of human endeavor since independence despite all internal and external obstacles. It would provide the psychological props and grounding among Africans for their self-representation. The Affirmative Africa Narrative is intended to confront, combat, degrade, pulverize, defeat, eliminate and replace the Pathological Africa Narrative that currently pervades external and internal descriptions and representations of Africa and Africans. In its place, the Affirmative Africa Narrative should become the primary perceptual representation and imagistic projection of an energetic and boundless; resurgent and self-directed Africa.
Consequently, for Africans committed to racial upliftment and continental advancement and empowerment embodied in the new liberated Africa vision, the requisite framework of self-representation, self-projection and self-activation is the Affirmative Africa Narrative. This is thus a necessary and indispensable accompaniment and organic adjunct to the determined pursuit of the liberated African vision and mission.
The Imperative of African Military Empowerment
A fifth requirement of the liberated Africa vision is the imperative of Africa’s military empowerment through deliberate provisions for continent-wide development of military capabilities. In order to meet the defence needs of a self-conscious people and continent determined to assume responsibility for its own self-advancement, self-protection, self-projection and emergence as a powerful and dynamic participant in global affairs, two range of actions are minimally imperative.
First is the establishment and development of military industries throughout Africa to ensure that virtually all military equipment from the most basic to the most advanced are manufactured (not assembled) in Africa. This is will free Africa from its current pathetic situation of dependency for military wares from the countries which participated in the past in Africa’s conquest and colonization as well as from new armament producers and traders. To be militarily none self-equipped and self-reliant is to reside in a state of UNFREEDOM.
The second aspect of African military empowerment is the revival, re-steaming and realization of the long-standing grand visions from the 1960s for continental defence institutions and systems. The founding nationalist and pan Africanist leaders of the 1960s and 1970s, had canvassed and proposed the development a comprehensive continental military defence system. This is was to be known as the African Military High Command. These pioneer leaders envisaged it as a powerful continental defence force for self-protection, internal security issues, intra-continental intervention, conflict resolution, contributions to continental and global peace keeping and management as needed and as a force of self-projection that announces Africa’s global presence. It would also be responsible for the security of African geo-political and oceanic spaces against foreign powers desirous of containing, controlling and constraining Africa by the establishment of their military cordon around the continent.
The over-all rationale for the prescription of Africa’s military empowerment is due to the historical purblindness and psychological incapacitation of African leaderships and dominant elite since independence. In the light of the rapid conquest, colonization and exploitation of African communities after the Berlin Conference between the 1880s-1900s, self-conscious Africans should never have the luxury of forgetting that Africa was conquered primarily because of Western military superiority in arms and armaments. Thus it would seem minimally patriotic, psychologically imperative, behaviourially logical and eminently sensible that such a people and continent should give premium attention to the establishment of a powerful military capacity for defence and offense as indicated by its historical experiences and new status as sovereign states.
Therefore a fulsome strategy for African military self-equipment and a powerful and expansive African Military High Command should be developed and incorporated as part of the liberated development strategy to equip Africa to defend, protect and project itself and to play a dynamic role in global affairs.
Conclusion
The various elements outlined above constitute a new strategy and process of endocentric development or African Liberated Development and their application would produce Liberated Africa. This Africa would be truly self-made: developmentally transformed, ideologically self-directed, politically stable, technologically advanced, industrially developed, socially prosperous, culturally renascent, psychologically assertive, militarily powerful, a globally ascendant continent with self-restored human dignity, an Africa of which all Africans will be duly proud.
Ehiedu Iweriebor, Ph.d (Columbia) is a Professor and former Chair of the Department of Africana and Puerto Rican/Latino Studies, Hunter College, City University of New York, USA.
By Abba Dukawa
Nigeria stands today at a painful and defining crossroads in its security journey. Across the nation, families live with growing fear as insecurity spreads—kidnappings, banditry, and terrorism have become harsh realities in too many communities. These threats do not respect state boundaries. Organised criminal networks move across states, leaving ordinary citizens feeling exposed and abandoned.
Nigerians are facing intertwined challenges. The anger is no longer whispered in private—it is now spoken openly with frustration and worry. Another pressing issue confronting Nigerians is the renewed debate over the creation of state police. When will the federal government strengthen the effectiveness of its security agencies? How much longer must communities endure this uncertainty?
At the same time, another urgent debate rises from the hearts of the people. In the face of this deepening crisis, should state governments be allowed to establish their own police forces to protect their citizens? Or will Nigeria continue to rely solely on a centralised system that many believe is struggling to respond quickly enough to local threats?
These are not just political questions. They are questions of safety, dignity, and the right of every Nigerian to live without fear. The nation is waiting, hoping for bold decisions that will restore trust, strengthen security, and protect the future of its people. State police cannot be the answer to these pressing issues that bedevil federal security agencies.
Recently, the President appealed to the leadership of the National Assembly to consider constitutional amendments that would create a legal framework for state police, arguing that such reform is necessary to address Nigeria’s worsening security challenges. The fragmented policing structure could complicate efforts to combat crime effectively.
Reigniting the debate over state police comes as no surprise, given that he has long been seen as an advocate for the idea since his tenure as Governor of Lagos State. He supported the concept then and has continued to promote it as President. Many Nigerians, particularly in the South-West, have long called for state police as a means to address the country’s growing insecurity. Despite the constitutional considerations, discussions around state police continue to evoke strong emotions nationwide.
How will state police address security breaches committed by local militias or vigilante groups such as the OPC in the Southwestern states? What actions would state police take regarding the Amotekun group, which is openly endorsed by Southwest governors, if it were to commit serious violations of the rights of citizens, especially those from other parts of the country? How quickly have the proponents of state police chosen to erase from memory the horrific atrocities the OPC inflicted on the Northern community in Lagos in February 2002? The scars of that tragedy are still raw, yet some behave as though it never happened—as if the pain and the lives lost meant nothing. It is a bitter betrayal of justice and our collective conscience.
Reintroducing this issue at a time when the federal security apparatus is already strained shows a lack of sensitivity. Proponents overlook that Section 214(1) clearly states there is only one police force for the federation, the Nigeria Police Force and no other police force may be established for any part of the federation. The section does not permit the establishment of state police. Policing is on the Exclusive Legislative List, meaning only the federal government can create or control a police force.
Even today, the Nigeria Police Force, under the centralised command of the Inspector-General, faces accusations of harassment and intimidation of the weak and vulnerable citizens. If such problems persist under federal control, imagine the risks of placing police authority under state governors, who already wield significant influence over state and local structures.
Implications For The State Police Structures In The Hand Of The State Governors
I must state clearly: I do not support the establishment of state police—at least not at this stage of Nigeria’s development. Our institutions remain fragile, and introducing such a system carries significant risks of abuse. History offers reasons for caution: the Native Authority police of the past were often linked to political repression and misuse of power.
Supporters argue that state police would bring law enforcement closer to local communities and improve response to crime. However, there are serious concerns rooted in Nigeria’s social realities.
Nigeria is a diverse nation with multiple ethnic and religious sentiments. If recruitment into state police forces becomes dominated by particular groups, minority communities may feel marginalised or threatened.
State police could deepen divisions and weaken public trust. State-controlled Police could also become instruments of political intimidation, especially during election periods, potentially targeting opposition figures, critics, and journalists.
Financial capacity is another major concern. Establishing and maintaining a professional police force requires substantial investment in training, equipment, salaries, welfare, and infrastructure. Many states already struggle to pay workers and provide essential services. How, then, can they adequately fund a state police? The likely outcome is poorly trained, under-equipped personnel—conditions that often foster corruption and inefficiency.
Even under federal oversight, Nigeria’s police system struggles with weak accountability and abuse of power. Transferring these weaknesses to the state level without safeguards could have severe consequences.
A poorly structured state police force could become loyal to governors rather than the Constitution, serving political interests rather than citizens’ interests. For these reasons, introducing state police, even with the constitutional amendment, could create more problems than it solves. Sustainability, accountability, and adherence to constitutional principles are critical and will likely be violated
Nigeria must strengthen law enforcement while protecting citizens’ rights and preserving national unity. Mr President, please reconsider your decision on state police. Nigerians want a strong, effective, and unified police force, not one that risks further dividing a system already struggling to meet its constitutional obligations.
Dukawa can be reached at ab**********@***il.com
By Kestér Kenn Klomegâh
China’s investments in Africa have primarily been in the agricultural sector, reinforcing its support for the continent to attain food security for the growing population, estimated currently at 1.5 billion people. With a huge expanse of land and untapped resources, China’s investment in agriculture, focused on increasing local production, has been described as highly appreciable.
Brazil has adopted a similar strategy in its policy with African countries; its investments have concentrated in a number of countries, especially those rich in natural resources. It has significantly contributed to Africa’s economic growth by improving access to affordable machinery, industrial inputs, and adding value to consumer goods. Thus, Africa has to reduce product imports which can be produced locally.
The China and Brazil in African Agriculture Project has just published online a series of studies concerning Chinese and Brazilian support for African agriculture. They appeared in an upcoming issue of World Development. The six articles focusing on China are available below:
–A New Politics of Development Cooperation? Chinese and Brazilian Engagements in African Agriculture by Ian Scoones, Kojo Amanor, Arilson Favareto and Qi Gubo.
–South-South Cooperation, Agribusiness and African Agricultural Development: Brazil and China in Ghana and Mozambique by Kojo Amanor and Sergio Chichava.
–Chinese State Capitalism? Rethinking the Role of the State and Business in Chinese Development Cooperation in Africa by Jing Gu, Zhang Chuanhong, Alcides Vaz and Langton Mukwereza.
–Chinese Migrants in Africa: Facts and Fictions from the Agri-food Sector in Ethiopia and Ghana by Seth Cook, Jixia Lu, Henry Tugendhat and Dawit Alemu.
–Chinese Agricultural Training Courses for African Officials: Between Power and Partnerships by Henry Tugendhat and Dawit Alemu.
–Science, Technology and the Politics of Knowledge: The Case of China’s Agricultural Technology Demonstration Centres in Africa by Xiuli Xu, Xiaoyun Li, Gubo Qi, Lixia Tang and Langton Mukwereza.
Strategic partnerships and the way forward: African leaders have to adopt import substitution policies, re-allocate financial resources toward attaining domestic production, and sustain self-sufficiency.
Maximising the impact of resource mobilisation requires collaboration among governments, key external partners, investment promotion agencies, financial institutions, and the private sector. Partnerships must be aligned with national development priorities that can promote value addition, support industrialisation, and deepen regional and continental integration.
By Blaise Udunze
In barely two weeks, Nigeria’s banking sector will once again be at a historic turning point. As the deadline for the latest recapitalisation exercise approaches on March 31, 2026, with no fewer than 31 banks having met the new capital rule, leaving out two that are reportedly awaiting verification. As exercise progresses and draws to an end, policymakers are optimistic that stronger banks will anchor financial stability and support the country’s ambition of building a $1 trillion economy.
The reform, driven by the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso, requires banks to significantly raise their capital thresholds, which are set at N500 billion for international banks, N200 billion for national banks, and N50 billion for regional lenders. According to the apex bank, 33 banks have already tapped the capital market through rights issues and public offerings; collectively, the total verified and approved capital raised by the banks amounts to N4.05 trillion.
No doubt, at first glance, the strategy definitely appears straightforward with the idea that bigger capital means stronger banks, and stronger banks should finance economic growth. But history offers a cautionary reminder that capital alone does not guarantee resilience, as it would be recalled that Nigeria has travelled this road before.
During the 2004-2005 consolidation led by former CBN Governor Charles Soludo, the number of banks in the country shrank dramatically from 89 to 25. The reform created larger institutions that were celebrated as national champions. The truth is that Nigeria has been here before because, despite all said and done, barely five years later, the banking system plunged into crisis, forcing regulatory intervention, bailouts, and the creation of the Asset Management Corporation of Nigeria (AMCON) to absorb toxic assets.
The lesson from that experience is simple in the sense that recapitalisation without structural reform only postpones deeper problems.
Today, as banks race to meet the new capital thresholds, the real question is not how much capital has been raised but whether the reform will transform the fundamentals of Nigerian banking. The underlying fact is that if the exercise merely inflates balance sheets without addressing deeper vulnerabilities, Nigeria risks repeating a familiar cycle of apparent stability followed by systemic stress, as the resultant effect will be distressed banks less capable of bringing the economy out of the woods.
The real measure of success is far simpler. That is to say, stronger banks must stimulate economic productivity, stabilise the financial system, and expand access to credit for businesses and households. Anything less will amount to a missed opportunity.
One of the most critical issues surrounding the recapitalisation drive is the quality of the capital being raised.
Nigeria’s banking sector has reportedly secured more than N4.5 trillion in new capital commitments across different categories of banks. No doubt, on paper, these numbers may appear impressive. Going by the trends of events in Nigeria’s economy, numbers alone can be deceptive.
Past recapitalisation cycles revealed troubling practices, whereby funds raised through related-party transactions, borrowed money disguised as equity, or complex financial arrangements that recycled risks back into the banking system. If such practices resurface, recapitalisation becomes little more than an accounting exercise.
To avert a repeat of failure, the CBN must therefore ensure that every naira raised represents genuine, loss-absorbing capital. Transparency around capital sources, ownership structures, and funding arrangements must be non-negotiable. Without credible capital, balance sheet strength becomes an illusion that will make every recapitalisation exercise futile.
In financial systems, credibility is itself a form of capital. If there is one recurring factor behind banking crises in Nigeria, it is corporate governance failure.
Many past collapses were not triggered by global shocks but by insider lending, weak board oversight, excessive executive power, and poor risk culture. Recapitalisation provides regulators with a rare opportunity to reset governance standards across the industry.
Boards must be independent not only in structure but also in substance. Risk committees must be empowered to challenge executive decisions. Insider lending rules must be enforced without compromise because, over the years, they have proven to be an anathema against the stability of the financial sector. The stakes are high.
When governance fails, fresh capital can quickly become fresh fuel for old excesses. Without governance reform, recapitalisation risks reinforcing the very weaknesses it seeks to eliminate.
Another structural vulnerability lies in Nigeria’s increasing amount of non-performing loans (NPLs), which recently caused the CBN to raise concerns, as Nigeria experiences a rise in bad loans threatening banking stability.
Industry data suggests that the banking sector’s NPL ratio has climbed above the prudential benchmark of 5 per cent, reaching roughly 7 per cent in recent assessments. Many of these troubled loans are concentrated in sectors such as oil and gas, power, and government-linked infrastructure projects, alongside other factors such as FX instability, high interest rates, and the withdrawal of Covid-era forbearance, which threaten bank stability.
While regulatory forbearance has helped maintain short-term stability, it has also obscured deeper asset-quality concerns. A credible recapitalisation process must confront this reality directly.
Loan classification standards must reflect economic truth rather than regulatory convenience. Banks should not carry impaired assets indefinitely while presenting healthy balance sheets to investors and depositors.
Transparency about asset quality strengthens trust. Concealment destroys it. Few forces have disrupted Nigerian bank balance sheets in recent years as severely as exchange-rate volatility.
Many banks still operate with significant foreign exchange mismatches, borrowing short-term in foreign currencies while lending long-term to clients earning revenues in naira. When the naira depreciates sharply, these mismatches can erode capital faster than any credit loss.
Recapitalisation must therefore be accompanied by stricter supervision of foreign exchange exposure, as this part calls for the regulator to heighten its supervision. Banks should be required to disclose currency risks more transparently and undergo rigorous stress testing at intervals that assume adverse currency scenarios rather than best-case outcomes. In a structurally import-dependent economy, ignoring FX risk is no longer an option.
Nigeria’s banking system has long been characterised by excessive concentration in a few sectors and corporate clients, which calls for adequate monitoring and the need to be addressed quickly for the recapitalisation drive to yield maximum results.
Growth in most advanced economies comes from the small and medium-sized enterprises that are well-funded. Anything short of this undermines it, since the concentration of huge loans to large oil and gas companies, government-related entities, and major conglomerates absorbs a disproportionate share of bank lending. This has continued to pose a major threat to the system, as the case is with small and medium-sized enterprises, the backbone of job creation, which remain chronically underfinanced. This imbalance weakens the economy.
Recapitalisation should therefore be tied to policies that encourage credit diversification and risk-sharing mechanisms that allow banks to lend more confidently to productive sectors such as agriculture, manufacturing, and technology rather than investing their funds into the government’s securities. Bigger banks that remain narrowly exposed do not strengthen the economy. They amplify its fragilities.
Nigeria’s macroeconomic conditions, which are its broad economic settings, are defined by frequent and sometimes sharp changes or instability rather than stability.
Inflation shocks, interest-rate swings, fiscal pressures, and currency adjustments are not rare disruptions; but they have now become a normal part of the economic environment. Despite all these adverse factors, many banks still operate risk models that assume relative stability. Perhaps unbeknownst to the stakeholders, this disconnect is dangerous.
Owing to possible shocks, and when banks increase their capital (recapitalisation), it is required that banks adopt more sophisticated risk-management frameworks capable of withstanding severe economic scenarios, with the expectation that stronger banks should also have stronger systems to manage risks and survive economic crises. In Nigeria today, every financial institution’s stress testing must be performed in the face of the economy facing severe shocks like currency depreciation, sovereign debt pressures, and sudden interest-rate spikes.
Risk management should evolve from a compliance obligation into a strategic discipline embedded in every lending decision.
Public confidence in the banking system depends heavily on credible financial reporting.
Investors, analysts, and depositors need to be able to understand banks’ true financial positions without navigating non-transparent disclosures or creative accounting practices, which means the industry must be liberated to an extent that gives room for access to information.
Recapitalisation provides an opportunity to strengthen the enforcement of international financial reporting standards, enhance audit quality, and require clearer disclosure of capital adequacy, asset quality, and related-party transactions. Transparency should not be feared. It is the foundation of trust.
One thing that must be corrected is that while recapitalisation often focuses on financial metrics, the banking sector ultimately runs on human capital.
Another fearful aspect of this exercise for the economy is that consolidation and mergers triggered by the reform could lead to workforce disruptions if not carefully managed. Job losses, casualisation, and declining staff morale can weaken institutional culture and productivity. Strong banks are built by strong people.
If recapitalisation strengthens balance sheets while destabilising the workforce that powers the system, the reform risks undermining its own economic objectives. Human capital stability must therefore form part of the broader reform strategy.
Doubtless, another emerging shift in Nigeria’s financial landscape is the rise of digital financial platforms that are increasingly changing how people access and use money in Nigeria.
Millions of Nigerians are increasingly relying on fintech platforms for payments, microloans, and everyday financial transactions. One of the advantages it offers is that these services often deliver faster and more user-friendly experiences than traditional banks. While innovation is welcome, it raises important questions about the future structure of financial intermediation.
The point here is that the moment traditional banks retreat from retail banking while fintech platforms dominate customer interactions, systemic liquidity and regulatory oversight could become fragmented.
The CBN must see to it that the recapitalised banks must therefore invest aggressively in digital infrastructure, cybersecurity, and customer experience, while cutting down costs on all less critical areas in the industry.
Nigerians should feel the benefits of recapitalisation not only in stronger balance sheets but also in faster apps, reliable payment systems, and responsive customer service.
As banks grow larger through recapitalisation and consolidation, a new challenge emerges via systemic concentration.
Nigeria’s largest banks already control a significant share of industry assets. Further consolidation could deepen the divide between dominant institutions and smaller players. This creates the risk of “too-big-to-fail” banks whose collapse could threaten the entire financial system.
To address this risk, regulators must strengthen resolution frameworks that allow distressed banks to fail without triggering systemic panic, their collapse does not damage the whole financial system, and do not require taxpayer-funded bailouts to forestall similar mistakes that occurred with the liquidation of Heritage Bank. Market discipline depends on credible failure mechanisms.
It must be understood that Nigeria’s banking recapitalisation is not merely a financial exercise or, better still, increasing banks’ capital. It is a rare opportunity to rebuild trust, strengthen governance, and reposition the financial system as a true engine of economic development.
One fact is that if the reform focuses only on capital numbers, the country risks repeating a familiar pattern of churning out impressive balance sheets followed by another cycle of crisis.
But the actors in this exercise must ensure that the recapitalisation addresses governance failures, asset quality concerns, risk management weaknesses, and transparency gaps; and the moment this is done, the banking sector could emerge stronger and more resilient.
Nigeria does not simply need bigger banks. It needs better banks, institutions capable of financing innovation, supporting entrepreneurs, and building economic opportunity for millions of citizens.
The true capital of any banking system is not just money. It is trust. And whether this recapitalisation ultimately succeeds will depend on whether Nigerians see that trust reflected not only in financial statements but in the everyday experience of saving, borrowing, and investing in the economy. Only then will bigger banks translate into a stronger nation.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: bl***********@***il.com
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