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 As historical documents show, the Nigerian constitution was through a military decree adopted in 1999.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.
Feature/OPED
$40bn Net Reserves, Record Wealth, Relentless Poverty: Who Is Nigeria’s Economy Serving Today?
By Blaise Udunze
No doubt, it was a welcome announcement that Nigeria’s net foreign exchange (FX) reserves have surged by an astonishing 1,233 per cent from about $3 billion to over $40 billion. This would ordinarily be the kind of economic milestone that inspires optimism, coupled with gross external reserves of about $52.52 billion, which are sufficient to finance roughly 11 months of imports of goods and services. Penultimate week, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, presented the development at the end of the 306th meeting of the apex bank’s Monetary Policy Committee (MPC) as evidence that its reforms are working.
It is no surprise that around the same period, one would say that another important economic event occurred with the government sharing more money than ever before with the federal, state, and local governments, as the Federation Account Allocation Committee (FAAC) distributed a record N2.55 trillion, representing an increase of N250 billion over the N2.3 trillion shared in the preceding month.
Of course, the official figures are impressive numbers. Yes, anyone would conclude that the economy is becoming stronger, more stable and better positioned for growth. While this suggests stronger public finances, it also raises the question of whether these larger allocations are producing tangible improvements in the lives of ordinary Nigerians. More interesting is that another set of figures tells a completely different story.
According to the World Bank’s newly approved Country Partnership Framework for Nigeria, 61 per cent of Nigerians now live below the poverty line, while about 79 per cent are either poor or vulnerable to falling into poverty. More than 139 million Nigerians live below the poverty line. Over 86 million people lack access to electricity, while millions of young Nigerians enter the labour market every year with little prospect of decent employment.
The contradiction could not be starker. If reserves are rising, government revenues are increasing, and governments at all levels are receiving record allocations, why are the lives of ordinary Nigerians becoming more difficult?
This is the question policymakers must answer not with statistics, but with tangible improvements in the lives of citizens. If government agencies engineering these figures must know, these are not merely economic statistics; they are the lived realities by which citizens judge any government.
Foreign exchange reserves are not an economic trophy. They are a means to an end. Strong reserves are expected to stabilise the currency, reassure investors, strengthen the country’s ability to withstand external shocks and create an enabling environment for investment, production and employment.
But reserves alone do not feed families nor would they reduce their housing rents. They do not lower transport fares. They do not reduce school fees. They do not make healthcare affordable. Nor do they automatically create jobs.
Ultimately, this is to say that the success of macroeconomic reforms must be measured not by the strength of the CBN’s balance sheet but by the wellbeing of the Nigerian people.
Historically, unlike our dear country, countries that consistently build substantial foreign exchange reserves do so on the back of strong economic fundamentals. The fact is that they maintain sustained trade surpluses, export diversified products, attract large volumes of long-term foreign direct investment (FDI), develop globally competitive manufacturing industries and continuously improve productivity.
Nigeria, unfortunately, still struggles on nearly all these fronts. The country’s export earnings remain overwhelmingly dependent on crude oil. Non-oil exports remain relatively insignificant. Value-added manufacturing exports are weak. Another area that raises concern is agriculture, which continues to export mostly raw commodities rather than higher-value processed products despite being known previously as the country’s mainstay. With all these so-called developments, Nigeria still imports refined petroleum products, machinery, pharmaceuticals, industrial inputs and even food that could be produced locally.
This naturally raises an uncomfortable but legitimate question that requires an answer. Yes, it would be necessary to ask: How exactly has Nigeria grown and accumulated over $40 billion in net foreign exchange reserves without the structural fundamentals that typically support such reserve growth?
The apex bank has continued to credit exchange-rate reforms, improved transparency, stronger investor confidence and increased diaspora remittances. Well, it would be said that these achievements deserve recognition.
However, they do not completely explain the scale or, more importantly, the sustainability of the reserve accumulation.
Nigeria has not consistently recorded the large trade surpluses associated with countries that rapidly accumulate reserves. Oil production remains below historical capacity. Export diversification remains limited. Ease of doing business continues to be constrained by multiple taxation, infrastructure deficits, insecurity, policy uncertainty, logistics bottlenecks and unreliable electricity.
Without addressing these structural deficiencies, reserve accumulation risks becoming more financial than productive.
Equally important is the question of foreign direct investment. Governor Cardoso has argued that improved macroeconomic stability is attracting foreign investors. That may well be true. But confidence alone does not build factories.
The real question is how much fresh FDI has actually entered Nigeria’s productive sectors? How much has gone into manufacturing? How much into agro-processing? How much into export-oriented industries capable of generating sustainable foreign exchange earnings and creating jobs?
If reserve growth is being driven largely by short-term portfolio investments attracted by high interest rates rather than long-term productive investment, then Nigeria remains vulnerable. Portfolio investors can exit as quickly as they entered whenever global financial conditions change.
The unarguable fact is that foreign direct investment, by contrast, creates factories, expands production, develops supply chains and creates lasting employment. Nigeria desperately needs more of the latter.
The CBN also points to diaspora remittances as a growing source of reserve accumulation, projecting inflows of approximately $1 billion every month before the end of the year. Again, this is encouraging.
Again, the country will not be tired of asking questions because several of these questions deserve closer examination. How much of these remittances represent genuinely new inflows rather than funds previously routed through informal channels? Come to think of it, how much of these remittances finance productive investments instead of household consumption? Can diaspora remittances realistically become a permanent substitute for export competitiveness?
No economy has ever industrialised on remittances alone. A nation cannot sustainably depend on the sacrifices of its citizens abroad while failing to create opportunities for them at home.
Beyond the reserve figures lies another troubling contradiction. This is more disturbing because every month, FAAC distributes unprecedented sums to governments across Nigeria. Yet again, with daily regret, the average Nigerian struggles with deteriorating public services.
Honestly speaking, it has become so frustrating that the majority of the people who yearn for pleasant or attractive experiences are struggling as roads remain poor, public hospitals remain overstretched, schools continue to decline, electricity remains unreliable, water infrastructure remains inadequate, and youth unemployment remains widespread. Worst still, think of the cases as the nation continues to grapple with rising inflation, worsening poverty, declining purchasing power, struggling businesses and persistent insecurity.
One major contradiction is that if revenues continue rising while poverty deepens, then one unavoidable question must be asked: Where is the money going? Another pertinent question: How can the citizens be surrounded by water and still suffer from thirst or soap lather in their eyes?
This has been the predominant worry in the minds of many even as the World Bank itself acknowledges this disconnect. While praising recent macroeconomic reforms for improving fiscal stability, strengthening foreign reserves and restoring investor confidence, it concludes emphatically that the gains have not translated into meaningful improvements in living standards.
Ironically, despite the claims of declining inflation, it continues to erode purchasing power. Social protection remains weak. Most Nigerians remain trapped in low-productivity informal employment.
One contradicting and astonishing step taken recently is nowhere more evident than in the Central Bank’s monetary policy. Consider this: despite a marginal decline in headline inflation to 15.91 per cent in June 2026, the Monetary Policy Committee retained the benchmark Monetary Policy Rate (MPR) at 26.5 per cent, alongside a 45 per cent Cash Reserve Ratio (CRR) for commercial banks.
The decision reflects understandable caution. The CBN remains concerned that escalating geopolitical tensions in the Middle East could increase global energy prices, worsen imported inflation and reverse recent gains in price stability.
From a monetary policy perspective, this caution is defensible. But from the standpoint of businesses and households, the consequences are profound. An interest rate of 26.5 per cent inevitably translates into prohibitively expensive bank lending.
The ripple and adverse effects have led to manufacturers struggling to finance expansion. Another tough aspect is seeing the small and medium-sized enterprises, the backbone of employment generation, find access to affordable credit increasingly difficult. Entrepreneurs postpone investments. Factories delay expansion. Potential employers reduce hiring. Economic growth slows.
Ironically, while it is understandable that high interest rates may help stabilise inflation and attract foreign portfolio inflows that support reserves, it should be made known that they simultaneously suppress domestic investment, production and job creation.
In other words, the same policies helping strengthen the country’s macroeconomic indicators may also be constraining the real economy. Even the celebrated decline in inflation deserves closer scrutiny.
The national inflation rate may have eased marginally to 15.91 per cent, but this national average masks severe hardship across much of the country, which continues to create perpetual pain.
How best can this be figured out if data from the National Bureau of Statistics show that 19 states and the Federal Capital Territory recorded inflation rates exceeding 30 per cent, with Niger State above 42 percent and Kogi State exceeding 41 per cent?
Food inflation continues to rise, driven by increases in the prices of tomatoes, pepper, beef, yams, garri and other staple foods.
Businesses themselves remain unconvinced. The Organised Private Sector has welcomed the marginal moderation in inflation but insists that prices remain painfully high for both consumers and businesses.
Leaders of small business associations argue that market realities tell a different story from headline statistics. For millions of Nigerians, inflation is not measured by percentages. It is measured by empty shopping baskets. By reduced meal portions. By businesses shutting their doors. By families withdrawing children from school. By postponed medical treatments.
From a theoretical standpoint, macroeconomic stability is undoubtedly necessary. Without it, sustainable development is impossible. But it would also be agreed that macroeconomic stability alone is not sufficient. It can be argued further that economic reforms must eventually improve household incomes, reduce poverty, expand productive employment and raise living standards.
Otherwise, they risk becoming reforms that look impressive in economic reports but remain invisible in everyday life.
The truth remains that with the current situation, Nigeria therefore stands at a critical pivotal moment and the decisions taken now will determine its future.
The current reserve position should not become a destination for celebration but a foundation for deeper structural transformation. The country must diversify exports beyond crude oil. Strengthen manufacturing. Promote value-added agricultural exports. Improve electricity supply. Reduce the cost of doing business. Expand logistics infrastructure. Attract long-term productive investment.
In addition, support local industries with affordable financing. Strengthen institutions. Improve governance and ensure greater accountability for public spending. Only then will rising reserves translate into rising prosperity. Only then will record FAAC allocations produce visible development. Only then will macroeconomic stability become household stability.
The ultimate measure of economic success is not the number of dollars held in the Central Bank’s vaults. It is whether parents can afford school fees and housing rent. Whether young graduates can find decent jobs. Whether businesses can borrow, produce and expand. Whether families can afford food without sacrificing nutrition. Whether citizens feel that economic growth includes them.
Until those questions receive positive answers, one uncomfortable question will continue to linger. Who Is Nigeria’s Economy Serving Today?
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: bl***********@***il.com
By Henry Obiekea
Nigeria’s banking industry is entering one of the most significant transformation periods since the 2005 banking consolidation exercise. The Central Bank of Nigeria’s (CBN) ongoing recapitalisation programme is more than a regulatory requirement—it is a strategic investment in the country’s financial future. If implemented successfully, it has the potential to strengthen financial stability, deepen credit access, improve investor confidence, and support a more inclusive and resilient economy.
In March 2024, the CBN announced new minimum capital requirements for commercial, merchant and non-interest banks. Under the new framework, international commercial banks are required to maintain a minimum paid-up capital of ₦500 billion, national commercial banks ₦200 billion, and regional commercial banks ₦50 billion. Merchant banks are required to hold ₦50 billion, while national and regional non-interest banks are required to maintain ₦20 billion and ₦10 billion respectively. The policy reflects the realities of today’s economy, where inflation, currency depreciation and expanding financial demands have significantly altered the capital required to support sustainable banking operations.
Many institutions have responded through rights issues, public offers, private placements, mergers and acquisitions in pursuit of the revised capital requirements. Beyond regulatory compliance, the exercise is already encouraging stronger governance, better capital planning and increased investor participation within Nigeria’s financial markets.
The recapitalisation conversation, however, extends beyond deposit money banks. The CBN has also introduced revised capital requirements for microfinance banks, recognising the critical role they play in extending financial services to underserved individuals, nano businesses and small enterprises. As the financial landscape becomes increasingly digital, stronger capital bases will enable these institutions to invest in technology, cybersecurity, risk management and product innovation while maintaining public confidence.
For Nigeria’s rapidly growing fintech ecosystem, although they are subject to different licensing frameworks depending on their operations, the broader regulatory direction is equally clear. Institutions that facilitate payments, tech-enabled banking, lending and savings are expected to maintain governance, capital and consumer protection standards appropriate to their respective licensing frameworks. This evolution is essential as fintechs continue to account for a growing share of financial transactions and provide services to millions of previously underserved Nigerians. Collectively, these reforms present a unique opportunity to reshape Nigeria’s financial ecosystem.
A stronger banking sector creates stronger economic outcomes. Well-capitalised financial institutions are better positioned to finance infrastructure, manufacturing, agriculture, housing and technology. They possess greater capacity to absorb economic shocks, support long-term lending and withstand periods of market volatility. More importantly, they can extend larger volumes of prudently underwritten credit to businesses that create jobs and stimulate economic growth.
For small and medium-sized enterprises, which contribute significantly to Nigeria’s GDP and employment, improved access to financing remains one of the greatest growth enablers. Recapitalisation should not be assessed solely by stronger balance sheets, but also by the extent to which additional capital supports productive economic activity.
Despite remarkable progress over the last decade, millions of Nigerians remain underserved by formal financial institutions. Expanding financial inclusion requires complementary approaches across commercial banks, microfinance banks, fintechs and other regulated financial institutions. Achieving meaningful inclusion requires collaboration across commercial banks, microfinance banks, fintech companies and regulators. Each institution serves different customer segments, yet all contribute towards a common objective: bringing more Nigerians into the formal financial system.
At FairMoney Microfinance Bank, recapitalisation aligns with our continued investment in responsible lending, digital banking capabilities, sound risk management and financial inclusion. We believe technology can complement prudent credit assessment and help extend access to financial services for eligible individuals and businesses.
As the recapitalisation programme progresses, success should ultimately be measured by broader outcomes: stronger institutions, deeper financial inclusion, increased SME financing, enhanced consumer confidence and sustained economic growth. Capital itself does not transform economies; how that capital is deployed does.
The Federal Government and the Central Bank of Nigeria have introduced reforms aimed at strengthening the long-term resilience of the financial sector. Continued implementation of these reforms will be important in supporting financial stability and sustainable sector growth. These decisions require vision, consistency and regulatory discipline. While the adjustment process may present short-term challenges for some institutions, the long-term benefits for financial stability, investor confidence and economic development far outweigh the costs.
Nigeria possesses one of Africa’s most dynamic financial services sectors. With stronger capital foundations, responsible innovation and continued collaboration between regulators and financial institutions, the country is well positioned to build a banking ecosystem capable of supporting its development ambitions, empowering millions more individuals and businesses, and supporting inclusive economic development over the long term.
Henry Obiekea is the Managing Director of FairMoney Microfinance Bank
By Sani Abdulrazak, PhD
People go through watershed moments sometimes when the cacophony of politics attempts to drown the cadence of progress; it becomes more serious when chimaera masquerades as certainty, but it is a known fact after all that the loudest voices are most times not necessarily the wisest.
Kaduna seems to have arrived at one of those moments. The propagandist opposition within the state is trying very hard to burnish manifestoes and criticisms wrapped in hyperbole and rehearsed until it begins to mistake itself for truth.
Yet, history has always been an unforgiving arbiter. It has an uncanny habit of stripping rhetoric naked, leaving only the vestiges of deeds. It is against that backdrop that one is compelled to reflect, not on who shouts the loudest, especially on social media, but on who has quietly altered the landscape of the beautiful crocodile state. That, conceivably, is the choice before Kaduna State.
Education hewn the destiny of a society, long before it is announced in boardrooms. Governor Uba Sani of Kaduna State appears to appreciate this axiom. As if constructing hundreds of classrooms, renovating neglected schools, expanding access to education and reviving projects abandoned to bureaucratic torpor is not remarkably astral, his administration has gone further to make tertiary education more affordable through the reduction of tuition fees in state-owned institutions. That single decision has become a bulwark against hopelessness for thousands of families. Parents breathe easier, students remain in school instead of abandoning their dreams, enrolment has received fresh impetus, and human capital has become a little less hostage to economic adversity.
Even the reconstruction of roads within Ahmadu Bello University, despite its federal status, speaks of governance that refuses to hide behind jurisdictional caveats. Curiously, while lecture halls become fuller, some critics remain engrossed in composing jeremiads, as though hashtags now award degrees and social media threads have replaced convocation ceremonies. If this does not deserve another term, then perhaps Kaduna should entrust its classrooms to keyboard warriors instead?
A sector that defies drama, yet consequentially integral in Kaduna State is healthcare. Primary Healthcare Centres have continued to receive upgrades, sixteen general hospitals have witnessed rehabilitation, the once-abandoned 300-bed Specialist Hospital has emerged from years of limbo, health insurance coverage has expanded considerably, and investments in personnel and equipment continue with assiduity. Yet, one occasionally encounters the strange absurdity wrapped as opposition, that government should be judged not by functioning hospitals but by the virulence of online criticism. It is almost as though some believe ailments or surgeries retreat before social media posts. Should we now replace stethoscopes with microphones or social media posts and call it healthcare?
If there is any sector that more clearly illustrates the difference between governance and grandstanding in Kaduna State, it is agriculture. Mechanisation, dry-season farming, free fertiliser distribution, value addition, the Special Agro-Industrial Processing Zone and renewed support for farmers all point towards a carefully crafted paradigm rather than an accidental policy.
There is a metamorphosis taking place in rural communities indeed. While genuine farmers harvest maize, ginger and tomatoes, critics harvest conspiracy theories with astonishing alacrity. One group tills the soil and produces food; the other tills public resentment. Since when did viral posts become a substitute for fertile fields?
They wouldn’t want to take their ballyhoo to infrastructure for sure, because infrastructure refuses to remain invisible no matter how determined propaganda may be. Roads snake through communities once forgotten, bridges reconnect places long separated, water projects restore hope where scarcity once seemed ineluctable, and abandoned projects have gradually returned from institutional comatose. Yet there exists a peculiar group of disgruntled politicians that notices every pothole repaired only long enough to ask why another one still exists somewhere else. It is a curious predilection, almost quixotic, to dismiss completed projects because perfection has not yet arrived. Must development now apologise for not occurring overnight?
Security remains man’s most delicate labyrinth, and perhaps the easiest subject upon which to score political points. No responsible leader claims absolute victory against insecurity, yet few can deny that many communities once deserted have gradually witnessed the return of farming, commerce and social interaction. Such progress may not satisfy those addicted to political apoplexy, but it certainly matters to the farmer returning to his land after years of displacement. Or should insecurity be preserved simply because it offers better campaign material?
Economic governance, that complex yet rarely glamorous aspect of governance, is not left out. Increased internally generated revenue, prudent expenditure, strategic partnerships, capital investments and fiscal discipline have gradually strengthened Kaduna’s financial architecture. International partners investing in Kaduna State seldom do so because of slogans, but because of credibility. Sadly, the numbers don’t lie as data is a very stubborn thing. Are spreadsheets now expected to consult political parties before balancing their figures, or should economic data also join the opposition?
Youth empowerment deserves equal reflection. With a skills acquisition centre in each of the three senatorial zones of the state, entrepreneurship support, digital innovation and targeted interventions for small businesses, an attempt is being made to replace dependency with productivity. The apotheosis of governance is not the endless distribution of charity but the deliberate creation of opportunity. Young people increasingly seek tools and training against tokenism and expectancy. Still, some measure empowerment only by the number of campaign T-shirts distributed during election season. Have branded caps suddenly become the highest form of economic policy?
The choice before Kaduna State is simpler than it first appears. Shall we exchange reduced tuition fees for recycled promises? Shall rehabilitated hospitals be traded for rehearsed indignation? Shall roads surrender to rhetoric, farms to social media debates, security gains to sensationalism, and fiscal prudence to flamboyant bombast? Shall tangible progress bow before political charlatanry merely because criticism aims to be louder than construction?
For our democracy to grow further, we must come to a non-negotiable conclusion that the ballot is not an instrument for rewarding the most eloquent critic, but for judging the most effective steward. How promising can stewardship be when classrooms are expanding, hospitals are reopening, roads are stretching farther, farmers are receiving greater support, communities are gradually becoming safer, and opportunities are multiplying.
The evidence before us is not ephemerally ethereal, but enduringly concrete. And so, the lingering questions refuse to disappear: if this is not the direction Kaduna should continue, then what is? If these are not the footprints of purposeful leadership, whose are? If measurable progress has become insufficient, what miracle remains outstanding? And if the answer lies somewhere beyond Governor Uba Sani, then who, exactly, has presented Kaduna with a more convincing testament than the one already written across its schools, hospitals, farms, roads and communities?
Sani Abdulrazak, PhD, is a writer, researcher and a public affairs analyst based in Zaria, Kaduna State.
