Feature/OPED
Nigeria: Politicians Advocate Comprehensive Review of Constitution
By Kester Kenn Klomegah
Leaders of integrated associations and politicians, mostly from the Eastern region of Nigeria, are calling for a thorough constitutional review that will incorporate the diverse ethno-political interests and also offer equal representation in the Federal Government of Nigeria (FGN).
Several archival reports made available and separate interviews conducted by IDN vividly show rising tensions and the lack of strategic foresight in the current approach towards national integration before 2023, the end of President Muhammadu Buhari’s administration.
Nigeria became a formally independent federation on October 1, 1960. It, however, experienced a civil war from 1967 to 1970. After that, it alternated between democratically-elected civilian governments and military dictatorships until it achieved a stable democracy in 1999, with the 2015 presidential election marking the first time an incumbent president had lost re-election.
In the 2019 presidential election, Muhammadu Buhari was re-elected for a second term in office defeating his closet rival Atiku Abubakar. As historical documents show, the Nigerian constitution was through a military decree adopted in 1999.
Nigeria is divided roughly in half between Christians, whose majority lives in the southern part of the country, and Muslims, who live mostly in the north.
Nigeria has respectively, the fifth-largest Muslim population in the world and the sixth-largest Christian population in the world, with the constitution ensuring freedom of religion. A minority of the population practise religions indigenous to Nigeria, such as those native to the Igbo and Yoruba ethnicities.
Currently, Islam has spread to the Christian dominated Eastern and Southern regions of Nigeria. Right after the Nigeria-Biafra civil war and until now, the Fulani people have dominated the military and politics in Nigeria. All is done for and by the Fulani for Fulani ethnic group, according to Kenneth Onyekachi Ihemekwele, Founding Partner of Imo State Indigenes Association, Executive Secretary of the Association of the Nigerian community and General Secretary of the Indigenous Peoples of Biafra aka IPOB in Swaziland, southern Africa.
After independence, following the military take-overs, the negotiated constitution has primarily remained an unimplemented document. The devastation and the underdeveloped Eastern part of Nigeria is the result of negligence from the federal government following the end of the Nigerian-Biafra civil war. The military regimes introduced a series of decrees that ushered in policies that are believed not to accommodate the development and political interests of the Igbo people.
“Nigeria is one of Africa’s most diverse and deeply divided states in the world today. Colonial rule exacerbated these differences, solidifying religious and ethnic identity as salient political distinction and creating conditions for persistent instability.
“The north-south divide continues and is marked by the serious disparity in economic development and access to basic social services,” Ihemekwele told IDN in an emailed interview.
Competition for control of state institutions, abetted by corruption, and conflict over the spoils of Nigeria’s natural resources, especially oil, have further contributed to these sources of instability.
In pursuit of broad-based political participation, peace and integration, Onyekachi Ihemekwele suggests that “the current constitution is reviewed properly because the constitution was drafted without due consultations with the broad majority of the people of Nigeria.
“It is a one-sided constitution for the selfishness of a certain group of people, who call themselves the ruling class, or better still, the northern politicians. We are free people and have rights to shape our destiny.”
Under the current circumstances, an inclusive economic and political system is the only solution. The contemporary public discourse is focussed on political restructuring along regional lines. The calls for a political arrangement where major ethnic groups will have control over their geographic areas as well as resources therein might help. The danger is rather than uniting Nigeria it would further divide the country along distinctive ethnic and religious lines.
Significantly, the foot-dragging on constitutional review by Buhari’s leadership called for public criticisms, he noted and further explained that what Nigerians need, and are clamouring for, is a country that will accommodate ethnic diversity, a unified country regardless of ethnic or religious creed, but at present, cannot be because Islam defines politics. Nigeria needs political, religious and ethnic tolerance. The constitution has to guarantee public safety in every facet of life, and the need for legitimate, effective political and administrative institutions.
The Nigerian authorities have an emphatically negative attitude to public opinions on ending violence and armed attacks, especially on the inhabitants of Eastern Rivers State.
Despite consistent calls for the constitutional dialogue that will ultimately provide a basis for peace and integration, promote internal sustainable development nationwide and boost a positive image on international arena have, thus far, remains an unchangeable political dream. Opening the chapter as a new dawn for adherence to the ideals of political pluralism has indefinitely eluded millions of broad-minded Nigerians.
Onyekachi Ihemekwele concluded that Nigeria has fallen from grace, and there seems no remedy for Nigeria to regain this past glory.
“We had earlier called for restructuring, the need for the Nigerian government to agree to wholesome restructuring without reservation or grant a referendum for the people in the South-East to strive for self-rule or what is referred to, in politics, as self-determination,” he said.
Professor Nathaniel Aniekwu, Secretary of the Alaigho Development Foundation (ADF) regretted in an interview with IDN that 60 years after independence and 50 years after the Civil War, the growing threats and frequent attacks by northern ethnic groups and deepening pitfalls in the federal governance system have negatively affected the overall development of Biafra and other regions in Nigeria.
According to the ADF, Biafra symbolizes the Igbo people’s longing for freedom, underlining their predicament from the Amalgamation in 1914 to the Biafra Declaration on May 30, 1967. Ever since, Biafrans have been confronting a continuous state of estrangement, brutal attacks and punitive measures against their spiritual, economic and political survival. The world community continuously watches the large-scale atrocities committed in the country. As long as these wars are going on, Nigeria cannot have peace, and therefore, there would be no real significant progress.
All economic indices show that despite the perceived war against them, marginalization and exclusion from participation in the governance of Nigeria, the Biafra States continue to be very competitive and are far from being worse off among the Nigerian States. Although Nigeria is richly endowed with natural and human resources, it has quickly lost all its shine advantages, he said.
Moreover, whatever remained in the past, has been squandered, especially as they seek to exclude Biafrans from participation in political governance. They failed to deploy the appropriate resources, especially human resources, and broad-minded people who can guide and manage the development of the country, simply because most of them come from the Biafra States.
National integration is an obvious possibility, especially for the Biafra States. It is the only hope, not only that internal cohesion is imperative but also integrating into a union of the agreed that is paramount. Leadership must be looked from the point of view of the governed, at the micro-level of the society. This has to be positioned as a guarantor of the preservation of the multi-secular State in Nigeria.
The federal system of government is not working in Nigeria given the unique nature of the Nigerian political space. We must, therefore, return to the solution domain, seek long-term solutions, first by reviewing the constitution. By taking this step, it could make it more receptive to further peace initiatives, offer political opportunities and creating ground for representations instead of depriving them of participating in state management.
Without all-inclusive Federal Government and its related public institutions, efforts to maintain the status quo will result in sharp differences and disintegration. The political division along ethnic lines and the slow peace process will harm development, explained Nathaniel Aniekwu.
Mrs Marie Okwor, President of the Igbo Women Assembly (IWA) and one-time member of Advisory Council of the People’s Democratic Party (PDP) is one of the remaining few Nigerians who have seen Nigeria from the struggle for independence through the development of its democracy.
Mrs Okwor, who is an Associate of the late Dr Nnamdi Azikiwe, narrated her views about the impact of the Civil War, the current politics and the role of the church in Nigeria.
“The War of 1967-1970 war was a pogrom, a war of attrition meant to wipe out a whole race for no just cause. It reminded me of the Holocaust against the Jews. I feel very emotional as I speak about this,” she told IDN.
“Suffice it to say, that the war could have been avoided, had Nigeria kept her end of the agreement at Aburi, in the Republic of Ghana, which came to be called “the Aburi Accord” reached in 1967. This venue offered all the delegates security guarantee, and that meeting was billed to be the last chance of preventing all-out War.
The accord finally broke down because of differences in interpretation on both sides. This led to the outbreak of the War. Markets and places of worship were not spared from bombings and strafing. As a matter of fact, one of my domestic staffs lost her mother in one of the market bombings. She was hurt by shrapnel; she bled to death since medical facilities were scarce. The effect of the War on the State of Biafra was deplorable.
The Government of Nigeria is vehemently opposed to the name Biafra. Many point to the fact that Biafrans have never been re-integrated. The basis for unity no longer exists. Biafrans struggle for their survival without depending on anyone.
Since the Nigerian Government has refused absolutely to accept Biafrans as a part of Nigeria, it stands to reason that they should be allowed to go separately and develop on their own at their own pace. It is pertinent to mention that the north contributes little, rather resources from southern Nigeria are controlled and squandered by northern politicians.
“There’s so much unrest which stems from oppression, square pegs are placed in round holes indeed. Almost all of Nigeria’s intractable problems emanate from the imposition of candidates during elections, there have been no free and fair or credible elections. The situation gets worse with every election. In the first place, the constitution under which elections are held is a fraud. Far from being the “People’s Constitution” in a simple sense of democracy, we have faced these mistakes since the inception of the presidential system of governance in Nigeria. The system under reference is wasteful, encourages corruption and dictatorial tendencies,” she precisely alleged in an interview with IDN.
In an early July IDN interview with the President of the Congress of Igbo Leaders in the UK and Ireland, Mazi Obi Okoli, said that Nigeria has lots of challenges in implementing a system of governance that will guarantee the interests of all within the nation.
According to him, many of the problems, frictions and issues faced today in Nigeria are a direct result of the flawed federal system, the 1979 constitution drafted without consultation and the negative attitudes by the majority of politicians toward development in Nigeria.
The negative dimensions and conditions of ethnic minority alienation and discontent in the federation has been indeed made worse under the present regime, and further tightening of the noose continues unabated.
Therefore, the interpretation and connectivity of ethnicity with the federal system of governance is that of resultant inherent contradictions and tensions in the evolution and operation of the Nigerian federal system.
Many of the problems, frictions and issues faced today in Nigeria are a direct result of the flawed federal system; the problematic 1979 constitution drafted without consultation and the negative under-developmental attitude of the Nigerian politicians.
It has been made worse by the over-centralization of the governance system, the primitive refusal to recognize the complex ethnic configuration and interest. Furthermore, the pragmatic consensual underdevelopment of some regions, especially the Eastern part of the country, the relatively limited development of accommodative, consensual or power-sharing mechanisms, the absence or weakness of key mediatory or regulatory institutions, and the repeated distortion and abortion of democratic institutions. With the above administrative defects, it will be difficult for the nation to progress in contemporary times and be able to compete with other developing nations of the world.
As a matter of facts, Ambassador Uche Ajulu-Okeke, a veteran Diplomat and Development Studies Expert with thirty-years working experience in the Nigerian Foreign Service, explained to IDN from the United States, that “the present-day Federal Republic of Nigeria, several years after its independence, the leaders have not succeeded in rebuilding its state institutions enough to reflect all-inclusive ethnic diversity. Let alone in adopting Western-style democracy that takes cognizance of different public opinions on development issues in the country. The struggle for and misuse of power have brought an absolute stalemate, disrupting any efforts to overcome the deepening economic and social crisis in the country.”
Besides, she tellingly maintains that “several challenges exist, the first of which is a coercive alien hostile occupation of our homeland which have severally subjected Igbo Women to rape, ravaging their homes and farmlands, decapitating their husbands and children and sources of traditional rural livelihoods. Widespread poverty, unemployment and unemployable skill remain a major challenge. State endorsed occupation of large portions of rural and village communal lands by hostile alien Jihadists have hampered the ability of women to provide for their families as supportive income earners.”
With the prevailing socio-economic climate and the steadily dwindling economic fortunes and hostile stance of the Government towards the entrepreneurial endeavour of Easterners, the future is bleak for women and youth. The only glimpse of hope in the horizon is a fallback to the age-old traditional practice of nurtured apprenticeship has been the bulwark of survival and sustenance in the face of the current existential threat facing Easterners.
The situation in the region is dire depicting a derelict lack of infrastructure widespread unemployment, insecurity and youth hopelessness. As a result of decades of State endorsed systemic exclusion since the end of the Civil War, Easterners have found themselves at the brink of socio-economic extermination and had to pull themselves up by sheer perseverance and dint of effort resulting in disenchantment with Nigeria and massive migration to new diasporas and abroad.
As Nigeria is persistently engulfed with so many challenges and problems, so it requires a systematic well-defined approach in order to overcome them: Nepotism at all levels and institutions of Government. Morbid corruption. Endemic kleptocracy. Ethnic cleansing and persecution of Christians and ethnic capture of the military and security apparatus of the State.
The current entrapment of Biafra within the British Nigeria contraption prevents the actualization of its investment and development potential in all ramifications. This is why the Easterners want to delink from this entrapped arrangement called Nigeria. In the face of years of criminal neglect by Nigeria and a firm footing in the Diaspora, Biafra’s emancipation and development will be the Eighth Wonder of the World.
In Ajulu-Okeke’s logical analysis, the way forward in restoring nationalities and bringing sustainable peace and development to the beleaguered peoples of Biafra is through the conduct of plebiscites that will afford the indigenous nationalities the inalienable right to choose how they are governed. The juxtaposition of ancient nationalities with incompatible values presently held together by a coercive military decree in centrist top-down military format federations, fundamental regional autonomies should return to the truly democratic constitution and holding of self-determination autonomy plebiscites for all indigenous nationalities will usher in sustainable development and peace.
According to international organizations, Nigeria is the most populous country in Africa, and the seventh most populous in the world, with an estimated 195.9 million inhabitants as of late 2019. Nigeria has the third-largest youth population in the world, after China and India with more than 90 million of its population under the age of eighteen.
Nigeria has the largest economy in Africa and is the world’s 24th largest economy. The International Monetary Fund (IMF) estimates, worth more than $500 billion and $1 trillion in terms of nominal Gross Domestic Product (GDP) and purchasing power parity, respectively. Nigeria is a federal republic comprising 36 states, with the capital located in Abuja. The country is located in West Africa bordering Niger in the north, Chad in the northeast, Cameroon in the east and Benin in the west. Its southern coast is on the Gulf of Guinea in the Atlantic Ocean.
Not too long ago, streaming in Nigeria was seen as a convenience, an alternative to traditional television, used mostly to catch up on missed shows or explore international content. Today, it has evolved into something far more ingrained. Streaming is now a culture: a daily habit that shapes conversations, influences pop culture, drives fandoms and even dictates how stories are told.
From late-night binge sessions and group watch parties to live-tweeting reality shows and football matches, streaming has become woven into how Nigerians experience entertainment. As mobile devices, smart TVs and affordable data options continue to expand access, the platform has moved from the fringes to the centre of everyday life. In 2026, this cultural shift will become even more pronounced.
Here’s what to expect as streaming continues to evolve in Nigeria and across Africa.
Value Will Define Loyalty in an Overcrowded Streaming Market: As streaming becomes mainstream, Nigerian audiences are becoming more discerning. Subscription fatigue is real, and users are no longer impressed by platforms with limited libraries or infrequent updates.
In 2026, loyalty will belong to platforms that offer sustained value, not just headline titles. This means:
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Deep content libraries that go beyond a handful of popular shows
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A healthy mix of live TV, sports and on-demand entertainment
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Regular content refreshes that keep audiences engaged month after month
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Viewers now understand value, and they will gravitate towards platforms that consistently deliver variety and relevance.
Local Stories Will Drive Cultural Relevance: Streaming has amplified the power of Nigerian storytelling, giving local productions the scale and visibility once reserved for traditional TV. Viewers are showing a clear preference for stories that feel familiar, authentic and culturally grounded.
In Nigeria, titles like Omera, Glass House, Italo, The Real Housewives of Lagos, Nigerian Idol and Big Brother Naija have become shared cultural moments, driving online conversations and real-world buzz. These shows are not just being watched; they are being experienced.
Across the continent, similar patterns are emerging, reinforcing the role of hyperlocal content in building loyalty and identity. In 2026, investment in African creators will remain central to streaming growth.
Streaming Becomes Personal and Predictive: As streaming matures, platforms will increasingly rely on AI to understand viewers on a deeper level. In 2026, Nigerian users can expect:
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More intuitive recommendations tailored to individual tastes
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Smarter content discovery that reduces the time spent searching
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Interactive experiences that respond to viewer behaviour
Beyond content, AI will also enhance advertising relevance and customer support, creating a smoother, more personalised user journey.
Live Sports Will Continue to Anchor Streaming Culture: While binge-worthy series drive daily engagement, live sports remain one of streaming’s biggest cultural anchors. Football, in particular, continues to command passionate followership in Nigeria.
With the 2026 FIFA World Cup scheduled for June–July, live streaming will dominate viewing behaviour once domestic leagues conclude. Nigerian football fans demand quality, reliability and immediacy, making official platforms with full broadcast rights, such as SuperSport, essential destinations during major tournaments.
In 2026, sports will further reinforce the value of legitimate, high-quality streaming experiences.
Security Becomes Non-Negotiable: As streaming cements its cultural relevance, content protection will take on greater importance. Premium sports and entertainment remain prime targets for piracy, but the response is becoming more sophisticated.
Technologies from cybersecurity firms like Irdeto now enable real-time monitoring, rapid takedowns and legal action against illicit streaming networks. These measures protect not just platforms, but creators and the broader creative ecosystem, a critical consideration as local production continues to grow.
Innovation Makes Streaming More Inclusive: One of the most significant shifts in Nigeria’s streaming landscape is how inclusive it has become. Platforms are innovating around:
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Flexible pricing
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Bundled services that combine TV and streaming
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Multi-device access, including mobile-first options
Whether premium or entry-level, users can now find options that suit their lifestyle and budget, reinforcing streaming’s position as an everyday entertainment staple.
A More Conscious Streaming Audience Emerges: As streaming culture matures, so does audience awareness. Nigerian viewers are increasingly able to identify illegal streaming platforms and understand the long-term damage piracy causes to the industry.
In 2026, conscious viewing will continue to gain ground, with users learning to avoid red flags such as “free” premium streams, unofficial apps, VPN-only access and excessive pop-up advertising.
Streaming is no longer simply about watching content, it is about belonging to moments, communities and conversations. In Nigeria, it has evolved into a cultural force that shapes how stories are told, shared and celebrated.
As 2026 unfolds, streaming will continue to thrive at the intersection of technology, culture and creativity, offering entertainment that is accessible, relevant and deeply local.
By Anne Mureithi
Provision of banking services in Africa continues to undergo profound digital transformation where most transactions are conducted virtually via digital devices and cash moved electronically. Mobile banking, fintech innovation, and cross-border digital payments have reshaped how individuals and businesses consume financial services.
In Nigeria and across the continent face, banks face sharp scrutiny from expanding regulatory landscape, including Anti-Money Laundering (AML), combating the financing of terrorism (CFT) and combating the financing of proliferation (CPF) that involves disrupting funds for weapons of mass destruction (WMD) through targeted financial sanctions.
With increased cross border trade, everyone including governments look upon banks to provide Know Your Customer (KYC) services, fraud risk management, and increasingly adhere to stringent data protection and privacy regulations as well as Environmental, Social, and Governance (ESG) reporting standards.
Compliance is no longer a back-office obligation, and this calls for increased investments in technology, particularly Artificial Intelligence (AI) and Machine Learning (ML) to enable banks to meet compliance requirements.
This is important as local traders want a banking partner who offers one-stop shop services on compliance matters. For banks, this is a competitive advantage, a core capability, and a source of differentiation. By embedding compliance into product and process design, banks can meet regulatory obligations efficiently while fostering innovation through a compliance-by-design approach.
In March 2025, the Central Bank of Kenya published the results of a survey on AI adoption in the banking sector, revealing moderate uptake, with 50% of respondents indicating some level of implementation. The survey found that among institutions that had adopted AI and machine learning, the leading applications were credit risk assessment (65%), cybersecurity (54%) and customer service (43%), followed by e-KYC (41%) and fraud risk management (40%).
These findings underscore significant untapped potential for AI to transform customer experience and strengthen risk management, particularly in AML and compliance monitoring. As intra-Africa trade continues to increase, compliance teams within banks must play a leading role in establishing strong governance, ensuring transparency, and preparing institutions for emerging regulatory expectations.
The Central Bank of Kenya has confirmed that it is in the final stages of developing a Guidance Note on Artificial Intelligence, with 95% of surveyed institutions having requested formal regulatory direction. The anticipated principles-based framework will focus on governance, risk management, transparency, and the ethical use of AI, laying the foundation for responsible innovation in the financial sector.
AI and ML models offer practical solutions to compliance challenges by learning and tracking typical behavioural patterns by customer, product, and corridor, flagging anomalies such as unusual counterparties, transaction values, or routing patterns in cross-border flows. These tools can also generate more accurate and complete assessments of ongoing customer due diligence and customer risk, which can be updated to account for new and emerging threats in real time.
By detecting potential violations of normal customer profiles in data or groups of customers with higher-risk characteristics, AI has streamlined priorities towards high-risk cases and reduced the time spent on false positives. This capability is increasingly critical as transaction volumes and complexity grow. Such technological advances transform compliance from a costly obligation into a strategic advantage.
Customers do not need to know one another to execute a transaction since AI-powered identity authenticates customer identity through document scanning, biometric verification and mobile-based identity solutions. These solutions have also enabled banks to onboard new customers remotely without the need to visit a physical bank to fill in registration details.
Accounts are fully secure and only users who pass the mobile-based identity verification are allowed access thereby preventing fraud. This also supports financial inclusion by enabling access to financial services for individuals who struggle to provide adequate identification documents for opening bank accounts.
In addition, Regulatory Technology (RegTech) solutions enable financial institutions to monitor regulatory developments, map obligations across their operations, conduct initial gap assessments, ensure that policies and procedures are always up to date and streamline regulatory reporting.
This capability is particularly valuable for pan-African institutions in ensuring agility while responding to regulatory changes across multiple jurisdictions. With its presence in 34 African countries, Ecobank advocates for harmonised payment systems and regulatory frameworks as a catalyst for accelerating intra-African trade.
Regional regulatory alignment further amplifies these gains. As African regulators work towards greater harmonisation of standards, banks with pan-African footprints are uniquely positioned to bridge local realities with global expectations, enabling smoother cross-border transactions and reducing friction for businesses operating across multiple markets.
The convergence of digital innovation and regulation presents an opportunity to support regional integration and strengthen public confidence. Banks that integrate compliance into their digital strategies, invest in ethical AI, enforce strong governance, and actively engage regulators will be best positioned to compete, facilitate trade, and protect financial integrity.
On an Africa-wide platform, traders from Nigeria want a synchronised platform that provides them with end-to-end solutions. Say Ecobank Group’s AML monitoring and sanctions screening capabilities within its SWIFT payment infrastructure ensure that all cross-border payment messages undergo real-time compliance checks prior to fund settlement.
With increased intra-Africa trade that rides on online platforms, accelerated digitalisation of cross-border transactions, timely, efficient, and secure payment processing is paramount. Real-time compliance monitoring is a non-negotiable cornerstone of safeguarding the integrity of international payment flows.
Ultimately, the future of banking in Africa will be defined by how institutions harness technology to meet regulatory obligations, deter financial crime, and foster trust among businesses, consumers, and public institutions alike. Compliance is no longer a constraint on growth; it is a foundation for sustainable innovation, regional integration, and long-term confidence in Africa’s financial system.
Ms Mureithi is a director in charge of compliance at Ecobank, Central, Eastern and Southern Africa (CESA)
By Blaise Udunze
Nigeria’s economy will be experiencing yet another round of reform; after the new tax implementation, the banking sector recapitalisation exercise will begin within less than three months until the March 31, 2026, deadline. The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, disclosed that 27 banks have tapped the capital market via public offers and rights issues.
The figures show that of 21 the 37 commercial, merchant, and non-interest banks in the country have met or exceeded the revised minimum capital thresholds of N500 billion for internationally authorised banks, N200 billion for national banks, N50 billion for regional banks, and N10-20 billion for non-interest banks. With the developments above, policymakers are betting that stronger balance sheets will help banks withstand macroeconomic shocks, finance growth, and restore confidence in the financial system. On the surface, the logic is sound, capital matters. But history warns us that capital alone is not a cure-all.
Nigeria has been here before, going by the 2004-2005 era of the then-governor of CBN, Charles Soludo, whose banking consolidation dramatically reduced the number of banks from 89 to 25 and created national champions. Yet barely five years later, the system was back in crisis, requiring regulatory intervention, bailouts, and the creation of the Asset Management Corporation of Nigeria (AMCON) to absorb toxic assets. The lesson here is clear, which revealed that recapitalisation that ignores structural weaknesses merely postpones failure.
If the current exercise is to succeed, the CBN must use it not only to raise capital but to repair the deeper fault lines that have long undermined the stability, credibility, and effectiveness of Nigeria’s banking sector.
More Capital isn’t Always Better Capital
The first and most critical issue is the quality of capital being raised. Disclosures made by the banks have shown that the combined capital base of about N5.142 trillion is already locked in by lenders across the different licence categories. Bigger numbers on paper mean little if the capital is not genuinely loss-absorbing. In past recapitalisation cycles, concerns emerged about funds being raised through related parties, short-term borrowings disguised as equity, or complex arrangements that ultimately recycled the same risks back into the system.
This time, the CBN must insist on transparent, verifiable sources of capital. Every naira raised should be traceable, free from conflicts of interest, and capable of absorbing real losses in a downturn. Otherwise, recapitalisation becomes an accounting exercise rather than a resilience-building one.
Why Corporate Governance Remains the Achilles’ Heel
Perhaps the most persistent weakness in Nigeria’s banking sector is corporate governance failure. Many bank crises have not been caused by macroeconomic shocks alone, but by poor board oversight, insider abuse, weak risk culture, and excessive executive power.
Recapitalisation provides a rare regulatory leverage point. The CBN should use it to reset governance standards, not just capital thresholds. Boards must be independent in substance, not just in form. Being one of the critical aspects of the banking challenge, insider lending rules should be enforced without exception. Risk committees in every financial institution must be empowered, not sidelined by dominant executives.
Without the apex bank fixing governance, new capital risks become fresh fuel for old excesses.
The Unresolved Burden of Non-Performing Loans (NPLs)
Data from the CBN’s latest macroeconomic outlook showed that the banking industry’s Non-Performing Loans ratio climbed to an estimated 7 percent, pushing the sector above the prudential ceiling of 5 percent. Nigeria’s banking sector continues to be drowned with high volumes and recurring non-performing loans (NPLs), and this is often concentrated in sectors such as oil and gas, power, and government-linked projects. Though with the trend of events, one may say that regulatory forbearance has helped maintain surface stability in the sector, no doubt it has also masked underlying vulnerabilities.
The truth is that a credible recapitalisation exercise must confront this reality head-on. Loan classification and provisioning standards should reflect economic truth, not regulatory convenience. Banks should not be allowed to carry impaired assets indefinitely while presenting healthy balance sheets to investors and the public.
Transparency around asset quality is not a threat to stability; it is a foundation for it.
How Foreign Exchange Risk Quietly Amplifies Financial Shocks
Few risks have damaged bank balance sheets in recent years as severely as foreign exchange volatility. Many banks continue to carry significant FX mismatches, borrowing short-term in foreign currency while lending long-term to clients with naira revenues.
During periods of FX adjustment, these mismatches can rapidly erode capital, no matter how well-capitalised a bank appears on paper. Recapitalisation must therefore be accompanied by tighter supervision of FX exposure, stronger disclosure requirements, and realistic stress testing that assumes adverse currency scenarios, not best-case outcomes.
Ignoring FX risk is no longer an option in a structurally import-dependent economy.
Concentration Risk and the Narrow Credit Base
Another long-standing weakness is excessive concentration risk. A disproportionate share of bank lending is often tied to a small number of large corporates or government-related exposures. While this may appear safe in the short term, it creates systemic vulnerability when those sectors face stress.
At the same time, the real economy, particularly SMEs and productive sectors, remains underfinanced because, over the years, Nigeria’s banks faced significant concentration risk, particularly in the oil and gas sector and in foreign currency exposure, while grappling with a narrow credit base characterised by limited lending to the private sector. This is due to high credit risk and tight monetary policy. Owing to this trend, recapitalisation should therefore be in alignment with policies that encourage credit diversification, improved credit underwriting, and smarter risk-sharing mechanisms, and not the other way round.
Therefore, it will be right to say that banks that grow larger but remain narrowly exposed do not strengthen the economy; they amplify its fragilities.
Risk Management in a Volatile Economy
The recurring inflation shocks, interest-rate swings, fiscal pressures, and external shocks are frequent features, not rare events, which show that Nigeria is not a low-volatility environment.
Currently, the Nigerian banking sector’s financial performance and investment returns are equally affected by various risks, including credit, liquidity, market, and operational risks.
Today, many banks still operate risk models that assume stability rather than disruption. Time has proven that risk management is essential for mitigating these risks and ensuring stability and profitability.
The apex bank must ensure that the recapitalisation process mandates robust, Nigeria-specific stress testing, and banks must demonstrate resilience under severe but plausible scenarios. This includes sharp currency depreciation, interest-rate spikes and sovereign stress. It must evolve from a compliance function to a strategic discipline.
Transparency and Financial Reporting
Investors, depositors, and analysts must be able to understand banks’ true financial positions without navigating a lack of transparent disclosures or creative accounting. Hence, public trust in the banking sector depends heavily on credible financial reporting.
The CBN should use recapitalisation to strengthen the International Financial Reporting Standard enforcement, disclosure standards, and audit quality. In championing this course, banks’ financial statements should clearly reflect capital adequacy, asset quality, related-party transactions, and off-balance-sheet exposures. Transparency is to enable confidence, not about exposing weakness.
Regulatory Consistency and Credibility
Policy credibility has been one of the greatest challenges for Nigeria’s financial regulators.
Abrupt changes, unclear timelines, and inconsistent enforcement undermine investor confidence and weaken reform outcomes.
Recapitalisation must be governed by clear rules, predictable timelines, and consistent enforcement. Both domestic and foreign investors need assurance that the rules of the game will not change midstream. Regulatory credibility is itself a form of capital.
Consumer Protection and Banking Ethics
While recapitalisation focuses on banks’ balance sheets, the public experiences banking through fees, service quality, dispute resolution, and ethical conduct. Persistent complaints about hidden charges and poor customer treatment erode trust in the system and a stronger banking sector must also be a fairer and more accountable one. It must be noted that strengthening consumer protection frameworks alongside recapitalisation will help rebuild public confidence and reinforce financial inclusion goals.
Too Big to Fail and How to Resolve Failure
Looking at what is obtainable in the system, larger, better-capitalised banks can also become systemically dangerous if failure resolution frameworks are weak. This requires that recapitalisation should therefore be accompanied by credible plans for resolving distressed banks without destabilising the entire system or resorting to taxpayer-funded bailouts, which has been the norm in the Nigerian banking sector today. The cynic might say that recapitalisation simply made big banks bigger and empowered dominant shareholders. However, a more prospective approach invites all stakeholders, including regulators, customers, civil society and bankers themselves, to co-design the next chapter of Nigerian banking; one that balances scale with inclusion, profitability with impact, and stability with innovation.
Clear resolution mechanisms reduce moral hazard and reinforce market discipline.
A Moment That Must Not Be Wasted
Recapitalisation is not merely a financial exercise; it is a governance and trust reset opportunity. If the CBN focuses solely on capital numbers, Nigeria risks repeating a familiar cycle of apparent stability followed by crisis.
The banking sector can lay a solid foundation that truly supports economic transformation if recapitalization is used to address governance failures, asset quality, FX risk, transparency, and regulatory credibility.
Nigeria does not just need bigger banks. It needs better banks, institutions that are resilient, transparent, well-governed, and trusted by the public they serve. Hence, it must be a system that creates a more robust buffer against shocks and positions Nigerian banking as a global competitor capable of funding a $1 trillion economy, as the case may be.
This recapitalisation moment must be about building durability, not just size. The cost of missing that opportunity would be far greater than the cost of getting it right.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
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