Feature/OPED
Recapitalisation Reality Check: Uncovering the Truth Behind Nigeria’s Banking Boom
By Blaise Udunze
When the Central Bank of Nigeria (CBN) announced a new round of bank recapitalisation in March 2024, many expected the leading banks, especially those boasting record-breaking profits in the hundreds of billions and trillions, to sail through with ease. Their financial statements glistened with prosperity, with expanding balance sheets, rising dividends, and bullish share prices.
Indeed, five of Nigeria’s top 10 banks reported a combined pre-tax profit of N4.6 trillion in 2024, showing a staggering 70 percent increase from the previous year, with Zenith Bank and Guaranty Trust Holding Company crossing the trillion-naira mark for the first time. The results painted a picture of robust profitability and resilience.
Yet, barely months after the profit announcements, the same banks found themselves racing back-to-back to the capital market to raise fresh funds. By the first half of 2025, Nigeria’s banking industry was at a crossroads. Behind the glitter of trillion-naira profits lay a more sobering reality of an industry scrambling to meet the CBN’s recapitalisation directive.
The contradiction is stark: record profits on one hand, desperate fundraising on the other. If the banks were truly as profitable and resilient as they claimed, they wouldn’t be begging investors for fresh equity to meet new thresholds.
Behind the strong showing of the market leaders lies an even deeper concern. The smaller commercial and regional banks are struggling to formulate credible recapitalisation strategies. As the March 31, 2026 deadline looms, the CBN has confirmed that only 14 banks have so far scaled the recapitalisation hurdle. That leaves nearly 19 institutions still in search of capital in a market already skeptical of their true worth.
The recapitalisation push has therefore become the clearest indicator of the sector’s underlying fragility. The CBN’s new capital requirements of N500 billion for international banks, N200 billion for national banks, and N50 billion for regional banks have forced lenders to confront a fundamental question. How much of their reported profits actually represents real financial strength?
Much of Nigeria’s profit boom has been a deception, a mirage built on foreign exchange revaluation gains and arbitrary fees rather than genuine operational efficiency. The unification of exchange rates and subsequent naira depreciation in 2023 and 2024 delivered massive revaluation windfalls on dollar-denominated assets, inflating balance sheets overnight. But these were paper gains, not cash profits, and could not be deployed to strengthen capital or fund new loans.
Beyond FX gains, Nigerian banks have increasingly relied on fees and charges as easy revenue. Despite repeated CBN sanctions for breaching its Guide to Charges, banks continue to extract billions from customers through transfers, withdrawals, ATM fees, SMS alerts, and account maintenance. With over 312 million active bank accounts, these charges now contribute more to profitability than traditional lending or genuine financial intermediation.
It is little surprise, then, that the recapitalisation exercise has exposed the widening gap between declared profitability and true solvency. While five Tier-1 banks together raked in N4.6 trillion in pre-tax profit in 2024, nearly 70 percent higher than in 2023, many mid-tier banks can barely keep pace. The recapitalisation gap across the sector is now estimated at N4.7 trillion.
As of September 2025, only 14 banks had crossed the line, while others scramble for mergers, rights issues, or license downgrades to survive. The CBN’s insistence that only paid-up capital and share premium will count while excluding retained earnings has stripped away the accounting camouflage that once masked weakness.
For the market leaders, the race has been aggressive but achievable. Access Holdings raised N351 billion through a fully subscribed rights issue. Zenith Bank’s N350.4 billion hybrid offer was oversubscribed by 160 percent. Wema Bank, once a mid-tier lender, successfully raised N200 billion and became a national success story. Among specialised institutions, Greenwich Merchant Bank sealed its own recapitalisation, supported by capital injections and debt-to-equity conversions that secured its merchant banking license, while Jaiz Bank rose above the N20 billion target to remain the flagship of Islamic banking. Lotus has met the N10 billion bar, consolidating its place in Nigeria’s fast-growing alternative sector.
Another notable entrant is Globus Bank, which in 2024 raised N52.9 billion to lift its capital to N98.6 billion and followed in 2025 with a further N102 billion via rights issues and private placements. The raise subscribed entirely by existing shareholders took its capital above N200 billion. The bank now awaits final verification from the CBN before being formally recognized as compliant.
For others, however, it has been a painful crawl. Fidelity Bank’s N205.45 billion hybrid offer still leaves a N160 billion gap to the N500 billion benchmark. Guaranty Trust Bank reached its own target through a two-phased approach that started with a rights issue in Nigeria that netted N365.8 billion. Subsequently, GT listed shares on the London Stock Exchange with proceeds of $105 million to reach the required target, while UBA Plc launched a N157 billion rights issue in July 2025, following a N239 billion offer in November 2024 that was oversubscribed at N251 billion, with N240 billion accepted. The new offer, extended to September 19, 2025, helped the bank meet the CBN’s N500 billion capital requirement.
As of September 2025, First Bank has secured N187.6 billion and plans an additional N350 billion in private placements, but it still needs to secure the remaining funds to meet the CBN’s requirements. FCMB Group Plc launched a N160 billion public share offer to meet the CBN’s N500 billion capital requirements for international banks, with the offer closing on November 6, 2025. The offer follows a successful N147.5 billion share sale in 2024.
Fidelity raised N176 billion in fresh capital in 2024 and is moving to get an additional N195 billion via private placement before the end of the year. Sterling Bank has not yet completed its recapitalisation as it commenced an N87.067 public offer. This offer follows completion of a N75 billion private placement and a N28.79 billion rights issue, which was significantly oversubscribed by its shareholders.
Consolidation pressures are once again reshaping Nigeria’s banking landscape. Titan Trust’s acquisition of Union Bank and the completed Providus and Unity Bank’s merger reflect the reality that not every institution will raise sufficient equity alone. More combinations are expected in the months ahead, with smaller lenders likely to be folded into stronger franchises as the recapitalisation deadline approaches.
This trend mirrors the 2005 consolidation era, which trimmed 89 banks down to 25, ushering in a new era of scale and scrutiny. The 2024-2026 recapitalisation may well repeat history, producing fewer but sturdier players, banks large enough to finance Nigeria’s economic transformation.
But history offers a warning that recapitalisation is not reform. Bigger balance sheets may shield banks from global shocks, but they do not guarantee developmental relevance. Unless the philosophy of Nigerian banking itself changes from profit-first to purpose-driven intermediation, the sector will keep producing “giant banks in a fragile economy.”
The real challenge is not size, but substance. Nigeria doesn’t just need bigger banks; it needs better banks. It needs institutions that see SMEs as partners rather than liabilities, that lend to real producers rather than recycle deposits into government securities. It needs lenders that adopt fintech-driven underwriting, regulators that reward productive lending, and policymakers that create the infrastructure, power, and security needed to make risk-taking viable.
Recapitalisation, in this light, should not be seen merely as a regulatory hurdle but as a mirror reflecting both the success and the shame of Nigeria’s banking system. The trillion-naira profits may have dazzled investors, but the scramble for new capital reveals the truth that the sector’s foundations remain fragile, its governance inconsistent, and its contribution to real economic development still limited.
The CBN’s policy, painful as it may be, is a necessary reality check. It forces banks to prove that their wealth is more than paper-deep and that their balance sheets can support Nigeria’s ambitious $1 trillion economy vision. For investors and depositors, it is a wake-up call that what glitters in the financial statements may not always be gold.
In the end, recapitalisation is not just about raising funds; it is about restoring credibility. Because trust, once eroded by profit manipulation and corporate posturing, takes far more than a balance sheet to rebuild.
Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]
By Nafisat Damisa
Introduction
The proliferation of generative AI has transformed Nigeria’s cybercrime landscape, enabling deepfake fraud, automated social engineering, and AI-enhanced phishing at scale. In early 2024, scammers using AI-generated deepfake videos impersonating a company’s CFO defrauded a Hong Kong finance worker of $25.6 million. As similar threats emerge in Nigeria’s fintech sector, this article examines whether the Cybercrimes (Prohibition, Prevention, etc.) Act 2015 (as amended 2024) is legally adequate, or whether Nigeria’s evidentiary and accountability frameworks are too weak to support effective prosecution of AI-driven cybercrime
Current Legal Landscape
Nigeria’s primary legal framework on preventing cybercrime is the Cybercrimes (Prohibition, Prevention, etc.) Act 2015, amended in 2024 to address cryptocurrency transactions, cyberbullying and various forms of digital misconduct. Complementary frameworks include the National Information Technology Development Agency Act 2007, the Nigerian Data Protection Act 2023, and sectoral regulations such as the CBN’s Risk-Based Cybersecurity Framework. However, the majority of these frameworks were issued far before now, and emerging risks like AI-driven threats are not really being addressed. The Act nowhere mentions “artificial intelligence,” “algorithm,” or “autonomous system.” Notably, the National Artificial Intelligence Commission (Establishment) Bill, 2025, is currently pending before the Senate. If passed, it would establish a dedicated commission to coordinate AI strategy, research, and ethical deployment. However, the Bill in its present form focuses primarily on development and innovation promotion, with limited provisions on criminal liability, evidence handling, or enforcement against AI-facilitated cybercrime, leaving the core accountability and evidentiary gaps largely unaddressed.
AI as a Double-Edged Sword
AI paradoxically enables both defence and attack. Nigerian financial institutions deploy AI for real-time fraud detection and pattern recognition. Conversely, cybercriminals exploit generative AI for deepfake creation, automated credential stuffing, and convincing phishing tailored to Nigerian English and Pidgin. The same technology that powers fraud detection systems can be weaponised to evade them. Take justice delivery as an example, the Evidence Act 2011 (as amended 2023) admits computer-generated evidence under Section 84, but remains silent on AI’s capacity to seamlessly generate or alter electronic records, creating “doctored AI-generated evidence”. These and many more issues await Nigeria’s digital space in the coming years.
The Legal Gaps
There are multiple critical gaps that undermine AI governance. For this article, three are considered. First, no framework attributes criminal liability when an autonomous AI commits an offence. The question of whether the developer, user, or owner should bear criminal responsibility for the acts of an autonomous system remains entirely unanswered under Nigerian law, leaving prosecutors without a clear legal theory of culpability.
Second, Section 84 of the Evidence Act 2011 governs computer-generated evidence but does not address AI-generated outputs. The Act’s definition of “computer” excludes AI’s cognitive processing capabilities, creating a statutory blind spot where evidence produced by generative or autonomous systems falls outside the existing admissibility framework.
Third, Nigeria lacks any framework for mandatory AI-generated content labelling, impeding deepfake traceability. Computer-generated evidence under Section 84 of the Evidence Act 2011 remains admissible if unchallenged at trial, a dangerous precedent for AI evidence, as opposing parties may lack the technical capacity to mount any challenge at all.
Comparative Jurisdictions: Rich Laws, Tangible Results
Jurisdictions with advanced AI laws demonstrate clear outcomes. The EU AI Act (Regulation 2024/1689) mandates transparency obligations, requiring synthetic content labelling and informing individuals when interacting with AI systems; non-compliance triggers significant penalties. The US Algorithmic Accountability Act of 2023 is a proposed Act that will require impact assessments for high-risk AI systems in housing, credit, and employment, with FTC enforcement and a public repository. China implemented mandatory measures for the Identification of AI-generated (Synthetic) content. These rules, mandated by the Cyberspace Administration of China (CAC) and others, require explicit (visible labels) and implicit (watermarks/metadata) identification for all AI-generated text, images, audio, video, and virtual scenes to ensure transparency, traceability, and combat disinformation. These laws contribute to measurable results: forensic traceability, expedited prosecution of deepfake fraud, and clear liability chains. Nigeria has none of these.
Hope or Illusion?
Without legislative intervention, AI’s promise against cybercrime remains an illusion. Nigeria requires the following to boost its hope:
- Amendment of the Cybercrimes Act to include AI-specific offences and mandatory content provenance standards;
- Revision of Section 84 of the Evidence Act 2011 to address AI-generated evidence credibility, not merely admissibility;
- Investment in digital forensic capabilities is currently hampered by inadequate enforcement, weak forensic capabilities, and a lack of specialised personnel; and
- A risk-based framework drawing from EU and US models.
- Review of both secondary and tertiary education curricula to address the knowledge gap in AI and prepare the next generation for the AI-driven future.
Conclusion
AI can help curb cybercrime in Nigeria, but only if legal capacity catches up with technical capability. The Cybercrimes Act 2024 amendments were a step forward, but they did not address AI accountability, algorithmic transparency, or evidentiary credibility. The pending National Artificial Intelligence Commission Bill, 2025, signals legislative awareness, but without substantive provisions on liability, evidence, and enforcement, it cannot fill the existing gaps. The effectiveness of existing frameworks remains a question. An optimistic but cautious path exists, but until Nigeria enacts AI-specific legislation, whether through amending the Cybercrimes Act, revising the Evidence Act, or strengthening the pending Bill, weak laws will remain unable to support strong technology.
Nafisat Damisa is a Legal Research Associate in Olives and Candles – Legal Practitioners. For further information, enquiries, or clarification, please contact Nafisat via: [email protected] or [email protected]
By Isah Kamisu Madachi
As of April 30, 2026, the crude price is said to have reached $125 in the global market. The all-time high price per barrel was recorded in 2008, when it surged to $147. It is obvious that the price is heading in that direction or even towards what experts have predicted — crude reaching a new all-time high of $150 in the near future if crude passages remain closed in the Middle East, which would ultimately come with several disproportionate challenges for businesses and households.
In Nigeria, what began as a mild adjustment in the price of gasoline and other refined crude products has not stopped anywhere until it reached N1,400 per litre of petrol at filling stations. When the price was surging, experts in energy, economics, marketing, business and other relevant fields tried to come up with explanations for how Nigeria, despite housing the largest petrochemicals refinery in Africa and being one of the largest oil-exporting countries on the continent, would continue to absorb this shock.
Despite our advantages, Nigeria recorded the world’s second-highest surge in petrol prices following the escalating geopolitical tension in the Middle East. In Africa, Nigeria has the highest spike, with many sources citing it at 39.5% and above. Even non-oil-producing countries in Africa, and countries that do not refine a drop of oil, did not experience this surge. Also, African countries like South Africa at 1%, Morocco at 2.1%, and Tanzania at 2.7% experienced far smaller increases that are nowhere near Nigeria’s.
To put it in context, South Korea, Japan, and China are among the foremost dependents on the Strait of Hormuz, whose closure escalated the crude price, but none of these countries has recorded even a 20% increase in their petrol prices. Nigeria does not import its crude through the Strait of Hormuz. Yet, as an oil-exporting nation, we have suffered some of the sharpest petrol price increases in Africa.
What went wrong in Nigeria to warrant this surge is not the primary focus of this piece. What lies ahead is. As a result of the increase in petrol prices, Nigerians have been disproportionately affected. Life has become unbearably difficult, with sharp increases in transportation costs, rising food prices, and higher costs of goods and services. Even charging points that used to collect N150 for charging a phone or battery now charge N300 or more.
As it stands, the gap between the current crude price and the predicted new all-time high is about $25. This means that if the passages continue to remain closed, we are not far from another historic price peak. It is even said that reopening the passages may not immediately stabilise prices, as crude tankers would still take time to reach their destinations.
What this means for Nigeria is another sharp increase in refined petroleum product prices, which could trigger another wave of stagflation. Already struggling, Nigerians do not deserve this. They are only just adapting to the post-subsidy era, yet are being hit again by another round of global geopolitical tensions. Many are already in deep energy poverty, with businesses struggling due to unstable electricity supply.
Therefore, as crude oil prices hover above $125 per barrel and threaten to reach the predicted $150 if disruptions in the Strait of Hormuz persist, Nigeria must act decisively to shield its citizens. The Dangote Refinery exists. Nigeria refines oil. What the federal government owes Nigerians at this point is a deliberate policy decision to make that the refinery serve domestic needs first, with pricing that does not mirror whatever is happening in the global market. That is not complicated; other oil-producing countries do exactly this.
The NMDPRA has the authority to act on this. The question is whether there is a political will to act before another price wave hits and Nigerians are once again left to absorb what their counterparts elsewhere never have to.
Sub-national governments also have something to do. Commercial motorcyclists and small business owners are the people who feel every petrol price increase the hardest and the fastest. Pushing CNG and LPG adoption among this group beyond the FCT and Lagos, with genuine support, would cushion a significant part of the next shock. Expanding solar access in underserved communities would do the same. A shop owner running on solar is not at the mercy of the next diesel price spike.
These solutions are quite feasible. Nigeria has attempted versions of them before. Where we often seem to get it wrong is in execution, and Nigeria has to treat this with the same urgency and seriousness as given to elections, for the well-being of its citizens. The only thing that has never matched the problem is the seriousness of the response.
Isah Kamisu Madachi is a policy analyst and development practitioner. He writes via [email protected]
By Gbolahan Oluyemi
In 2025, the National Pension Commission (PenCom) directed all Licensed Pension Fund Operators (LPFOs) to demand a Pension Clearance Certificate (PCC) from service providers before engaging their services. This new policy typically affects various types of entities, including small and medium-scale enterprises, most of which are not usually compliance-driven. Following this directive, the PCC has become an essential compliance document for both large, medium and small-scale firms. This article provides a guide on what a PCC is, why it matters, and how it can be obtained.
What is a Pension Clearance Certificate (PCC)?
A Pension Clearance Certificate (PCC) is an official document issued by PenCom confirming that an organisation has complied with the provisions of the Pension Reform Act. It is an annual document that must be renewed every year at no cost. The yearly renewal is intended to ensure that organisations treat compliance as a continuous activity rather than a one-off act.
Why is a PCC Important?
The PCC is important because it demonstrates that an organisation is compliant with the provisions of the Pension Reform Act, especially as it relates to employee pension contributions under Section 4 (1) of the Pension Reform Act and subscription to group life insurance under Section 4 (5) of the Pension Reform Act. It is also required for certain transactions, such as government contracts and engagements with compliance-sensitive partners. In essence, a PCC assures investors, partners, and clients that your business is properly structured and compliant with regulatory requirements.
Who Needs a Pension Clearance Certificate?
Under Nigerian law, companies with three or more employees are required to participate in the Contributory Pension Scheme (CPS). If your organisation employs at least three staff members and provides or intends to provide services to Licensed Pension Fund Operators (LPFOs) or other regulated entities, you are expected to obtain a PCC annually.
How Do I Obtain a PCC?
PenCom issues the PCC electronically and at no cost through its web portal: https://pcc.pencom.gov.ng/. Please note that Applicants who are just beginning compliance and remitting employees’ pensions are required to first obtain an employer code from a Pension Fund Administrator (PFA). This code is necessary to initiate the PCC application on the PenCom portal.
Upon logging into the portal, you will be required to complete your company profile by providing your date of incorporation, contact details, and website (if applicable), as well as uploading your CAC documents.
Next, you will upload an Excel schedule (using the template provided on the website) containing your employee list. After this, you will be required to upload Excel sheets detailing pension contributions. You will also need to upload your organisation’s group life insurance documentation and payment instrument.
Finally, you will review your application and submit it for further processing by PenCom. Before commencing an application, ensure you have the following:
- Certificate of Incorporation (CAC documents)
- Group Life Insurance Policy for employees
- Evidence of Pension Fund Administrator (PFA) registration for employees
- Three years’ proof of monthly pension remittances, including penalties for any defaults (where applicable). For companies less than three years old, provide proof of remittances from the date of incorporation
- A valid Tax Identification Number (TIN)
- An employee schedule showing staff details and contributions (usually in Excel format) Templates are available on the PenCom portal
Also note that for the portal to accept employee details and remittance records, employees must have completed their data capture with their respective Pension Fund Administrator and updated their records to reflect their current employer.
Conclusion
Obtaining a Pension Clearance Certificate in Nigeria may seem technical at first, but once proper processes are established, it becomes routine. The key is consistency in remittance, maintenance of accurate records and prioritisation of compliance in overall operations.
For many Nigerian businesses, the PCC is more than a regulatory requirement; it is a mark of credibility. In a competitive environment, that credibility can make all the difference.
Gbolahan Oluyemi is a Legal Practitioner and currently leads Olives and Candles – Legal Practitioners. For further information, enquiries, or clarification, please contact Gbolahan via: [email protected] or [email protected]
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