Feature/OPED

Nigerian Elections: A Democratic Deficit

Published

6 years ago

25/11/2019

By Omoshola Deji

First Osun, then Kano and now Kogi and Bayelsa States. The spate of violence during election brings doubt on Nigeria’s ability to get it right. Unlike other nations, Nigeria seems to have no magic formula; no means of solving a problem without creating another.

Democracy initially seemed an opportunity to annihilate tyranny, but has instead increased it. Rule of law, freedom of speech and other democratic ethics are consistently being violated by the ruling elites and “converted democrat”. Nigeria is fast becoming the worst country for democracy as franchise have become an object of attack. This piece appraises the flaws of Nigerian elections, particularly the Kogi and Bayelsa governorship poll, and the pundit’s verdict.

The people of Kogi and Bayelsa trooped out on November 16 to elect their choice for the state’s top job. The exercise which should ordinarily be civil and peaceful was marred by unprecedented violence and electoral fraud. Gun-wielding thugs, aided by the security agencies, disrupted the electoral process from which Nigeria’s democracy is supposed to grow.

Perhaps those in positions of authority misconstrued duty as favour. In a democracy, individuals are morally responsible to vote their conscience, and government is duty-bound to provide the enabling environment, ensuring the wish of the majority prevails. Once the environment is not enabling, the outcome of an important exercise such as election cannot be taken as the wish of the majority. Factoring this in, although Yahaya Bello of Kogi state and David Lyon of Bayelsa were return elected, they did not win the election. This by no means underestimate their ability to win in a credible contest.

Repression of opposition candidates, their supporters and polling agents made the elections a democratic deficit. In Kogi state, incumbent Governor Yahaya Bello of the All Progressives Congress (APC) commanded violence on his contenders. Stalwarts of the People’s Democratic Party (PDP) and Social Democratic Party (SDP) were routinely harassed, injured and killed. Thugs invaded their homes, vandalized them, and set some ablaze. Several cars and valuables were destroyed, forcing the targets to go into hiding. This destabilized PDP and SDP from making last minutes canvassing to woo undecided voters; giving APC an unfair advantage. The attack surprisingly continued even after APC ‘won’. Thugs set the home of a PDP women leader ablaze and callously watch her burn to ashes.

Suppression of voters is also one of the unholy strategies APC employed. The party carefully studied the voting pattern of both states, ignite violence in opposition strongholds, but protected hers. In Kogi, election proceeded smoothly in the Central district where Bello hails from, while the East and West were confronted with extreme violence. In Bayelsa, people were restrained from voting in Southern Ijaw where PDP is likely to garner majority vote. The party was also stifled in Nembe. The outturn of both elections suggests APC has devised different illicit strategies for winning elections. Repression and suppression are autocratic tenets, a breach of the fundamental principle of fairness that must be adhered to in a democracy.

Disenfranchisement made the elections a democratic deficit. Violence and intimidation denied eligible voters the opportunity to cast their ballot. Fear kept people indoor while majority of those who turned up scampered for safety as thugs attack opposition strongholds in Kogi. Many lost their votes via ballot-box snatching. In Bayelsa, the Youth Initiative for Advocacy, Growth & Advancement, popularly called YIAGA Africa reports that INEC announced falsified results and election did not hold in 24 percent of the state’s polling units. Disenfranchising such a significant percentage of the population utterly discredits the outcome of the election. How do we pacify the 24 percent whose preferred candidates lost because they were denied the opportunity to vote? Such inequity makes the election a democratic deficit.

Monetary inducement of voters and electoral officers made the elections a democratic deficit. Agents of the dominant parties, particularly the APC and PDP always offer cash for votes, and did so in Kogi and Bayelsa states. They shared between N500 to N3000, although APC outspend the PDP, being the ruling party at the federal level.

Two categories of persons should be criticized for vote-buying, but Nigerians mostly condemn one; they blame the buyers (politicians) and absolve the sellers (voters). Vote-buying has become so prevalent that majority of the electorate expect to be tipped for voting. But then, should we blame the poor voters for demanding a continuation of what the parties started? Nonetheless, Nigerians need to be enlightened that politicians are descendants of the devil; they have no free gift. Vote-buying is a business and politicians who invest in the trade must recoup their money and make extraordinary profits, hence the prevalence of under-performing governments.

Electoral fraud and INEC’s partisanship made the elections a democratic deficit. An electoral umpire must be impartial to all contending parties, but INEC fell short. In Bayelsa, election materials stolen by APC thugs surfaced during collation and INEC allegedly record the votes. The umpire announced bogus results in favor of APC in Sagbama, Ogbia, Nembe, and Southern Ijaw. It’s baffling how these troubled spots returned high votes; the Borno 2015 template was apparently revived. How could the result of Nembe – a troubled spot where people would naturally abstain from voting – reflect over 80 percent turnout, while the result of a peaceful area such as Yenagoa, the state capital reflects less than 40 percent turnout? Such result is a clear indication of electoral fraud.

Electoral fraud was rife, but INEC lacks the courage to wield the big stick, especially against APC. In Kogi state, armed thugs, aided by the security agencies, manipulated the poll in favour of APC. Ballot boxes were either carted away, destroyed, or changed with already thumb-printed ones. To Nigerians dismay, INEC counted the false votes rather than cancel the results of the affected polling units. To top it all off, bogus figures were awarded in favour of APC in crisis-ridden areas and spaces PDP has fair support. For instance, INEC claimed APC scored 112,764 votes, while PDP only garnered 139 votes in Okene local government of Kogi State. This cannot be true.

A party with structure and spread like the PDP can’t garner such a paltry vote at a time Kogites were determined to sack Bello’s failed government. The bizarre result is a reflection of the extreme rigging perpetrated in almost every area of the state. In a credible contest, even SDP’s Akpoti would garner more than 139 votes in Okene. It is perturbing PDP didn’t score such a paltry vote during the Lagos 2019 governorship election. Please bear in mind that although the revenue generated in Lagos state is incommensurable with its rate of development, Akinwunmi Ambode’s administration performed much better than that of Bello in Kogi. Yet the godfather denied him return ticket, but supported Bello.

Unprofessional and partisan conduct of the security agencies made the elections a democratic deficit. Over 60,000 police officers and crime fighting equipment were deployed for the Bayelsa and Kogi governorship elections. Yet violence prevailed. The military compromised the election in Bayelsa, while police jeopardized the exercise in Kogi. Policemen accosted gun-wielding thugs to polling units across Kogi West and East district to snatch or stuff ballot boxes, attack opposition figures, and distribute money to APC agents. The thugs moved freely with vehicles despite restriction of movement, manipulating and destabilizing the election.

APC agents operated under massive protection while that of PDP and other opposition parties were left in the cold. Recall that prior to the election, candidate of the Social Democratic Party (SDP), Natasha Akpoti’s campaign office was looted and destroyed by alleged APC thugs, but the perpetrators weren’t arrested. Take a breather to imagine how the security agencies, the state government and the presidency would have reacted if such happens to any APC secretariat.

At the venue of the Peace Accord signing meeting, Akpoti and her aides were molested, her campaign vehicles were destroyed by APC thugs, while the police looked on. The raging thugs disrupted the meeting, which had several dignitaries present, including Mohammed Adamu, the Inspector General of Police (IGP). Yet none has been prosecuted. Take another breather to imagine how the IGP would have reacted if the thugs had no state’s backing.

The military’s massacre of Shiite members who obstructed the Chief of Army Staff’s convey should give you a clear sense of how the IGP would have probably reacted, if the thugs were not operating under the authority of the powers that be. However, subjecting the personality of the IGP to ridicule in a bid to win elections is a bad precedence with devastating consequences. Politicians need to desist from sacrificing the image and efficiency of national institutions on the altar of politics.

IGP Adamu stated that the policemen that colluded with thugs to disrupt the Kogi and Bayelsa elections were fake policemen. Nigerians are wondering how fake policemen, if any, overpowered the over 60,000 trained policemen deployed for the elections. Does it imply that fake policemen have better strategy and weapon than the real police? Assuming, but not conceding that fake policemen committed the anomalies, was the police helicopter that dropped canisters and opened fire on voters in PDP strongholds piloted by fake policemen? The IGP should come up with a better excuse or apologize for failing Nigerians.

Police announced making eleven arrests, but none were paraded. Many wonders why the same police that’s always eager to parade criminal suspects is reluctant to parade the electoral offenders. Besides, was it just the eleven persons arrested that perpetrated the extreme violence reported across the 21 local governments in Kogi state? It is most disheartening that the same police that couldn’t provide adequate security in just two states reigned terror on non-violent IPOB members, Shiite devotees and Revolution Now protesters.

INEC and the security agencies failed in every respect. Their inefficiencies significantly make Nigerian elections a democratic deficit. In Kogi and Bayelsa, electoral fraud prevailed despite INEC’s promise of a free, fair and credible election. Violence prevailed despite the deployment of over 60,000 police officers and crime fighting equipment such as armoured tanks and surveillance helicopters.

Vote-buying prevailed despite the deployment of officers of the Independent Corrupt Practices and other Related Offences Commission (ICPC) and the Economic and Financial Crimes Commission (EFCC). Both agencies made no arrest, despite extensive video evidences showing the face of vote buyers and sellers. Clandestine moves to disrupt the electoral process went undetected, and were freely perpetrated, despite the deployment of officers from the Department of State Security (DSS).

Election in Nigeria is one of the most expensive in the world, but far from being the most credible. No less than nine persons met their death during the Kogi and Bayelsa polls. A police officer, a youth corps member, Senator Dino Melaye’s nephew, and Kogi PDP women leader were among those unfortunate. APC needs to caution its members has the opposition parties lack federal might, a major instrument needed to perpetrate violence and electoral fraud.

Elections can’t be credible without the political will to make it happen. Nigerian government must put measures in place to forestall the use of illegal approaches to win elections. Such measures could include reducing the premium on political offices, signing the amended electoral bill into law, revamping the security architecture, and establishing an independent electoral offences commission.

Appraising the Pundit’s Verdict

It is habitual for the writer, hereafter titled Pundit, to foretell the outcome of elections. Notable among his several accurate predictions is foretelling ex-President Jonathan’s defeat in 2015. The Pundit foretold President Buhari’s re-election in 2019, against the prediction of reputable global institutions such as Williams and Associates, and The Economist. He also accurately foretold the outcome of the 2019 governorship election in 23 out of 29 states.

Despite his serial accurate predictions, the pundit’s prognosis of the elections in focus was not a totally good outing. Foreseen, but unprecedented violence and electoral fraud mainly forbid some of his predictions from coming to pass. In a piece titled “Kogi and Bayelsa 2019 Governorship Election: Foretelling the Outcome”, the Pundit predicted Duoye Diri’s (PDP) win in Bayelsa, but he lost. PDP’s Dino Melaye also failed to win the Kogi West senatorial rerun on the first vote as predicted. The election ended inconclusive. However, APC’s Yahaya Bello ‘won’ the Kogi governorship election as predicted, although not by rerun.

In truth, the pundit never saw APC’s win in Bayelsa coming. His prediction was mainly flawed by ex-president Jonathan’s secret endorsement of APC candidate, David Lyon. Although there were words on the street, the pundit believed Jonathan won’t work against his lifelong party, the PDP. This made him assert that “politics is an interest driven game; hence it is not impossible, but most unlikely that Jonathan would support APC. This is premised on the manner the party has disparaged him since he lost power in 2015.”

The pundit was wrong on Jonathan. He assumed the ex-president won’t support APC despite the dispute between him and Governor Seriake Dickson, his estranged godson. Jonathan acted like his erstwhile godfather, ex-president Olusegun Obasanjo. Despite unilaterally bringing Jonathan to power under the PDP, Obasanjo facilitated his defeat in 2015 by backing the APC. The party (APC) praised Obasanjo to high heavens, but abandoned him shortly after forming government. Jonathan’s romance with APC may also not end well. He may also get the Obasanjo treatment.

Another factor the pundit failed to consider during prediction is the (ex)militants endorsement of Lyon. Bayelsa is the den of dreaded militants who have the power to influence the outcome of elections. But then again, PDP has been governing Bayelsa since 1999, hence it is not amiss to think, in structure and strength, “PDP is in Bayelsa, what APC is in Lagos”. Moreover, the judicial invalidation of APC’s candidacy before the election naturally made winning an unattainable height, but the party pulled off a surprise.

INEC declared the Kogi West senatorial poll inconclusive with Smart Adeyemi (APC) leading Dino Melaye (PDP) with over 20,000 votes. As earlier discussed, the Kogi senatorial and governorship poll is a daylight robbery and fiery of public sovereignty. The pundit strongly stands by his prediction analysis and assertion that Melaye (PDP) would defeat Adeyemi (APC) in a free, fair and credible contest.

The pundit foretold Bello’s emergence as governor-elect in Kogi state based on his disposition to violence and electoral fraud. In the prediction piece, the pundit explicitly stated that “In a free, fair and credible contest, PDP’s Musa Wada would defeat APC’s Yahaya Bello. But the election is not going to be free; not going to be fair; and not going to be credible. Thugs would disperse voters and smash ballot boxes in Wada’s stronghold. The security agencies won’t arrest disruptors, and would be grossly partisan.” The lines came to pass exactly as foretold.

Nigerians never assumed Bello could bizarrely unleash violence on those he aspired to govern. The poor performing governor ingeniously took violence from the realm of creating inconclusive elections to straight win. His conduct ratifies the pundit’s argument that “he’s not deserving of governorship or any other position.” Bello’s insatiable thirst for power made him throw caution to the wind. He eventually got the power, but earned negative fame. The 44-year-old ruined his presidential prospect and wrote his name in the wrong page of history. Blessed is the one who defines Nigerian election as a process where thugs decide, police support, INEC declares, and the court affirm.

Omoshola Deji is a political and public affairs analyst. He wrote in via [email protected]

Feature/OPED

From Convenience to Culture: How Streaming Will Shape Entertainment in Nigeria in 2026

Published

23 hours ago

16/01/2026

Business Post Contributor

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:

Deep content libraries that go beyond a handful of popular shows
A healthy mix of live TV, sports and on-demand entertainment
Regular content refreshes that keep audiences engaged month after month
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:

More intuitive recommendations tailored to individual tastes
Smarter content discovery that reduces the time spent searching
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:

Flexible pricing
Bundled services that combine TV and streaming
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.

Feature/OPED

How Compliance through Technology among Banks can Promote Intra-Africa Trade

Published

1 day ago

16/01/2026

Business Post Contributor

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)

Feature/OPED

The Missing Pieces in Nigeria’s Banking Recapitalisation

Published

3 days ago

14/01/2026

Business Post Contributor

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]