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Richer Banks, Poorer Economy: The Hidden Crisis in Nigeria’s Financial System

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Richer Banks Poorer Economy

By Blaise Udunze

Across Africa, banks are getting bigger but not necessarily better. From South Africa’s Standard Bank to Morocco’s Attijariwafa and Egypt’s National Bank, financial institutions are boasting record balance sheets, higher Tier 1 capital, and growing regional footprints. According to African Business magazine’s 2025 ranking of the continent’s top 100 banks, Africa’s total Tier 1 capital climbed to $126 billion, up from $120 billion in 2024.

But behind this glowing façade of balance sheet expansion lies a troubling irony, especially in Nigeria. Despite being home to some of the continent’s most visible lenders, Nigeria is missing from the International Monetary Fund’s latest list of Africa’s fastest-growing economies. While Nigerian banks such as Access Bank, Zenith Bank, UBA, and FBN Holdings feature among Africa’s top 20 in assets, their impact on real economic growth remains painfully limited.

In simpler terms, Nigeria’s banks are becoming richer without making the economy stronger.

It is one of the defining contradictions of modern Nigerian finance, where a banking sector keeps ballooning in size even as the real economy struggles to breathe. The IMF projects Nigeria’s GDP growth at 3.9 percent in 2025, below the 6-8 percent threshold that defines Africa’s fastest-growing economies. Meanwhile, smaller nations such as Rwanda, Benin, and Côte d’Ivoire are racing ahead, driven by reforms, industrial growth, and investment-friendly policies.

So why is Africa’s largest economy growing so slowly even with “Africa’s biggest banks” at its helm? The answer lies in how these banks make their money and how little of it trickles into productive enterprise.

Nigeria’s leading banks have swollen their balance sheets largely through asset revaluations, foreign currency adjustments, and customer deposits that sit idle or are channeled into risk-free government securities. What looks like growth on paper often reflects inflationary asset repricing, not expanded lending to manufacturers, agribusinesses, or small and medium enterprises (SMEs).

Three quarters of the industry’s celebrated “assets” are actually liabilities owed to the public. These are deposits that banks temporarily hold, not capital they generated or invested productively. This dependency on depositors’ funds reveals a system that looks rich in assets but is, in essence, shallow in innovation and weak in capital depth.

A banking system overly reliant on deposits is inherently fragile. Deposits are short term and confidence sensitive and can flee quickly during periods of policy uncertainty. Unlike equity or long term capital, they offer little cushion against shocks. This overdependence creates a false picture of liquidity but hides structural weakness. Nigeria’s banks may look stable, but their foundations are vulnerable, like a tower built on shifting sands of depositor confidence rather than the rock of sustainable capital formation.

Loans to the manufacturing and agricultural sectors remain a small fraction of total credit, while lending rates often hover above 27 percent. Many small businesses that form the backbone of job creation and innovation still cannot access affordable financing. Instead, banks have mastered the art of financial intermediation without real interconnection, mobilizing deposits but not transforming them into engines of growth.

This disconnect reveals a deeper issue with weak capital efficiency. In a healthy financial system, deposits are converted into productive loans that stimulate investment, create jobs, and boost exports. But in Nigeria, the ratio of bank loans to GDP remains among the lowest in Sub-Saharan Africa. Banks appear more comfortable storing wealth than stimulating enterprise. Treasury bills and government bonds, with minimal risk and decent yields, have become the preferred playground for Nigeria’s banking giants. The result is a financial system that thrives on fiscal inertia rather than productive dynamism.

Contrast Nigeria’s sluggish growth with the dynamism in East Africa, where banks like Kenya’s Equity Group and KCB are expanding aggressively, driving credit to real sectors and supporting regional trade. East Africa now contributes 21 banks to Africa’s top 100, up from just 13 in 2022, reflecting genuine growth in financial inclusion and productive lending. While Nigeria’s banks chase continental rankings, Kenya’s and Rwanda’s banks are quietly fueling economic revolutions.

Nigeria’s exclusion from the IMF’s list of Africa’s fastest-growing economies is symbolic. It tells a story of a giant whose growth is increasingly superficial. The IMF praised countries like Rwanda and Benin for fiscal discipline, macroeconomic stability, and structural reforms, as these are all areas where Nigeria continues to struggle. Despite policy adjustments and modest improvements in non-oil sectors, Nigeria’s economy remains shackled by inflation, currency instability, and policy uncertainty. These same constraints discourage banks from taking real sector risks.

In effect, the financial system mirrors the broader economy and is large in size, yet underperforming in substance. When banks announce trillion-naira asset bases, it makes for good headlines but poor development economics. The irony is that asset expansion without capital productivity is like pumping air into a balloon, which is impressive in size but fragile in substance.

While the Central Bank of Nigeria’s Governor, Yemi Cardoso, insists that the nation’s economic reforms are “yielding visible results” and placing the country “on the path to stability, inclusiveness, and innovation-driven growth,” evidence on the ground paints a more sobering picture. The CBN’s optimism, though politically convenient, contrasts sharply with the structural realities of Nigeria’s financial system and the broader economy.

If reforms were truly delivering inclusive and innovation driven growth, it would be reflected in stronger credit access, industrial productivity, and improved living standards, not just in favourable rhetoric at global meetings. Yet, Nigeria’s banking sector remains dominated by balance sheet expansion rather than productive lending. Three quarters of the industry’s celebrated “assets” are actually liabilities to public deposits temporarily held, not capital generated through innovation or investment in the real economy.

This disconnect between financial growth and real-sector development underscores a deeper fragility. Banks continue to rely heavily on short-term deposits while shying away from financing manufacturing, agriculture, and small enterprises with the engines of inclusive growth. The result is an economy where the numbers look impressive on paper, but households and industries still struggle with high borrowing costs, limited credit, and declining purchasing power.

Far from demonstrating reform-driven resilience, Nigeria’s economic structure remains hollow at the core of a system rich in nominal assets but poor in capital depth and innovation. Macroeconomic stability cannot be claimed when inflation hovers around 18.02 percent, foreign investment inflows stagnate, and job creation lags far behind population growth.

In essence, what the CBN presents as progress is, in many respects, statistically false if stability is achieved through monetary tightening and exchange rate adjustments rather than genuine economic transformation. Until reforms translate into tangible outcomes of affordable credit, industrial renewal, and sustainable job creation, the claims of inclusiveness and innovation-driven growth will remain more aspirational than real.

For Nigeria’s regulators, analysts, and policymakers, the question is no longer how large the banks’ assets appear, but what those assets are doing for the economy. True strength must come from innovation in financial intermediation, capital efficiency, and credit diversification; support for real sector growth; and regional competitiveness on the African and global stage.

For Nigerian banks to translate asset expansion into real economic impact, the next frontier must be purposeful intermediation, where financial growth feeds productive enterprise, not just paper wealth. That begins with rethinking the credit model by lending based on business potential and cash flow viability, not just collateral. By partnering with fintechs and development institutions, banks can use data driven credit assessments to reach small manufacturers, agribusinesses, and innovators who drive job creation.

Beyond lending, true strength will come from building deeper capital bases and reducing dependence on short-term deposits. Banks must raise long-term funds through bonds, equity, and partnerships with pension and insurance institutions so they can finance industrial and infrastructure projects sustainably. Regulators, too, must align incentives with development by rewarding banks that channel credit into productive sectors and penalizing those that merely recycle deposits into government securities.

Ultimately, Nigeria’s banking future depends on a mindset shift from comfort in liquidity to confidence in innovation. The country does not need banks that only count wealth but those that create it. When balance sheet expansion begins to translate into accessible credit, inclusive growth, and industrial renewal, Nigeria’s banks will cease to be symbols of inflated success and become true instruments of national transformation.

Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]

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Directing the Dual Workforce in the Age of AI Agents

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Linda Saunders Trusted AI

By Linda Saunders

We will be the last generation to work with all-human workforces. This is not a provocative soundbite but a statement of fact, one that signals a fundamental shift in how organisations operate and what leadership now demands. The challenge facing today’s leaders is not simply adopting new technology but architecting an entirely new operating model where humans and autonomous AI agents work in concert.

According to Salesforce 2025 CEO research, 99% of CEOs say they are prepared to integrate digital labor into their business, yet only 51% feel fully prepared to do so. This gap between awareness and readiness reveals the central tension of this moment: we recognise the transformation ahead but lack established frameworks for navigating it. The question is no longer whether AI agents will reshape work, but whether leaders can develop the new capabilities required to direct this dual workforce effectively.

The scale of change is already visible in the data. According to the latest CIO trends, AI implementation has surged 282% year over year, jumping from 11% to 42% of organisations deploying AI at scale. Meanwhile, the IDC estimates that digital labour will generate a global economic impact of $13 trillion by 2030, with their research suggesting that agentic AI tools could enhance productivity by taking on the equivalent of almost 23% of a full-time employee’s weekly workload.

With the majority of CEOs acknowledging that digital labor will transform their company structure entirely, and that implementing agents is critical for competing in today’s economic climate, the reality is that transformation is not coming, it’s already here, and it requires a fundamental change to the way we approach leadership.

The Director of the Dual Workforce

Traditional management models, built on hierarchies of human workers executing tasks under supervision, were designed for a different era. What is needed now might be called the Director of the dual workforce, a leader whose mandate is not to execute every task but to architect and oversee effective collaboration between human teams and autonomous digital labor. This role is governed by five core principles that define how AI agents should be structured, deployed and optimised within organisations.

Structure forms the foundation. Just as organisational charts define human roles and reporting lines, leaders must design clear frameworks for AI agents, defining their scope, establishing mandates and setting boundaries for their operation. This is particularly challenging given that the average enterprise uses 897 applications, only 29% of which are connected. Leaders must create coherent structures within fragmented technology landscapes as a strong data foundation is the most critical factor for successful AI implementation. Without proper structure, agents risk operating in silos or creating new inefficiencies rather than resolving existing ones.

Oversight translates structure into accountability. Leaders must establish clear performance metrics and conduct regular reviews of their digital workforce, applying the same rigour they bring to managing human teams. This becomes essential as organisations scale beyond pilot projects and we’ve seen a significant increase in companies moving from pilot to production, indicating that the shift from experimentation to operational deployment is accelerating. It’s also clear that structured approaches to agent deployment can deliver return on investment substantially faster than do-it-yourself methods whilst reducing costs, but only when proper oversight mechanisms are in place.

To ensure agents learn from trusted data and behave as intended before deployment, training and testing is required. Leaders bear responsibility for curating the knowledge base agents access and rigorously testing their behaviour before release. This addresses a critical challenge: leaders believe their most valuable insights are trapped in roughly 19% of company data that remains siloed. The quality of training directly impacts performance and properly trained agents can achieve 75% higher accuracy than those deployed without rigorous preparation.

Additionally, strategy determines where and how to deploy agent resources for competitive advantage. This requires identifying high-value, repetitive or complex processes where AI augmentation drives meaningful impact. Early adoption patterns reveal clear trends: according to the Salesforce Agentic Enterprise Index tracking the first half of 2025, organisations saw a 119% increase in agents created, with top use cases spanning sales, service and internal business operations. The same research shows employees are engaging with AI agents 65% more frequently, and conversations are running 35% longer, suggesting that strategic deployment is finding genuine utility rather than novelty value.

The critical role of observability

The fifth principle, to observe and track, has emerged as perhaps the most critical enabler for scaling AI deployments safely. This requires real-time visibility into agent behaviour and performance, creating transparency that builds trust and enables rapid optimisation.

Given the surge in AI implementation, leaders need unified views of their AI operations to scale securely. Success hinges on seamless integration into core systems rather than isolated projects, and agentic AI demands new skills, with the top three in demand being leadership, storytelling and change management. The ability to observe and track agent performance is what makes this integration possible, allowing leaders to identify issues quickly, demonstrate accountability and make informed decisions about scaling.

The shift towards dual workforce management is already reshaping executive priorities and relationships. CIOs now partner more closely with CEOs than any other C-suite peer, reflecting their changing and central role in technology-driven strategy. Meanwhile, recent CHRO research found that 80% of Chief Human Resources Officers believe that within five years, most workforces will combine humans and AI agents, with expected productivity gains of 30% and labour cost reductions of 19%. The financial perspective has also clearly shifted dramatically, with CFOs moving away from cautious experimentation toward actively integrating AI agents into how they assess value, measure return on investment, and define broader business outcomes.

Leading the transition

The current generation of leaders are the crucial architects who must design and lead this transition. The role of director of the dual workforce is not aspirational but necessary, grounded in principles that govern effective agent deployment. Success requires moving beyond viewing AI as a technical initiative to understanding it as an organisational transformation that touches every aspect of operations, from workflow design to performance management to strategic planning.

This transformation also demands new capabilities from leaders themselves. The skills that defined effective management in all-human workforces remain important but are no longer sufficient. Leaders must develop fluency in understanding agent capabilities and limitations, learn to design workflows that optimally divide labor between humans and machines, and cultivate the ability to measure and optimise performance across both types of workers. They must also navigate the human dimensions of this transition, helping employees understand how their roles evolve, ensuring that the benefits of productivity gains are distributed fairly, and maintaining organisational cultures that value human judgement and creativity even as routine tasks migrate to digital labor.

The responsibility to direct what comes next, to architect systems where human creativity, judgement and relationship-building combine with the scalability, consistency and analytical power of AI agents, rests with today’s leaders. The organisations that thrive will be those whose directors embrace this mandate, developing the structures, oversight mechanisms, training protocols, strategic frameworks and observability systems that allow dual workforces to deliver on their considerable promise.

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Energy Transition: Will Nigeria Go Green Only To Go Broke?

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By Isah Kamisu Madachi

Nigeria has been preparing for a sustainable future beyond oil for years. At COP26 in the UK, the country announced its commitment to carbon neutrality by 2060. Shortly after the event, the Energy Transition Plan (ETP) was unveiled, the Climate Change Act 2021 was passed and signed into law, and an Energy Transition Office was created for the implementations. These were impressive efforts, and they truly speak highly of the seriousness of the federal government. However, beyond climate change stress, there’s an angle to look at this issue, because in practice, an important question in this conversation that needs to be answered is: how exactly will Nigeria’s economy be when oil finally stops paying the bills?

For decades, oil has been the backbone of public finance in Nigeria. It funds budgets, stabilises foreign exchange, supports states through monthly FAAC allocations, and quietly props up the naira. Even when production falls or prices fluctuate, the optimism has always been that oil will somehow carry Nigeria through the storms. It is even boldly acknowledged in the available policy document of the energy transition plan that global fossil fuel demand will decline. But it does not fully confront what that decline means for a country of roughly 230 million people whose economy is still largely structured around oil dollars.

Energy transition is often discussed from the angle of the emissions issue alone. However, for Nigeria, it is first an economic survival issue. Evidence already confirms that oil now contributes less to GDP than it used to, but it remains central to government revenue and foreign exchange earnings. When oil revenues drop, the effects are felt in budget shortfalls, rising debt, currency pressure, and inflation. Nigerians experienced this reality during periods of oil price crashes, from 2014 to the pandemic shock.

The Energy Transition Plan promises to lift 100 million Nigerians out of poverty, expand energy access, preserve jobs, and lead a fair transition in Africa. These are necessary goals for a future beyond fossil fuels. But this bold ambition alone does not replace revenue. If oil earnings shrink faster than alternative sources grow, the transition risks deepening fiscal stress rather than easing it. Without a clear post-oil revenue strategy tied directly to the transition, Nigeria may end up cleaner with the net-zero goals achieved, but poorer.

Jobs need to be considered, too. The plan recognises that employment in the oil sector will decline over time. What should be taken into consideration is where large-scale employment will come from. Renewable energy, of course, creates jobs, but not automatically, and not at the scale oil-related value chains once supported, unless deliberately designed to do so. Solar panels assembled abroad and imported into Nigeria will hardly replace lost oil jobs. Local manufacturing, large-scale skills development, and industrial policy are what make the difference, yet these remain weak links in Nigeria’s transition conversation.

The same problem is glaringly present in public finance. States that depend heavily on oil-derived allocations are already struggling to pay salaries, though with improvement after fuel subsidy removal. A future with less oil revenue will only worsen this unless states are supported to proactively build formidably productive local economies. Energy transition, if disconnected from economic diversification, could unintentionally widen inequality between regions and states and also exacerbate dependence on internal and external borrowing.

There is also the foreign exchange question. Oil export is still Nigeria’s main source of dollars. As global demand shifts and revenues decline, pressure on the naira will likely intensify unless non-oil exports rise in a dramatically meaningful way. However, Nigeria’s non-oil export base remains very narrow. Agriculture, solid minerals, manufacturing, and services are often mentioned, but rarely aligned with the Energy Transition Plan in a concrete and measurable way.

The core issue here is not about Nigeria wanting to transition, but that it wants to transition without rethinking how the economy earns, spends, and survives. Clean energy will not automatically fix public finance, stabilise the currency, or replace lost oil income and jobs. Those outcomes require deliberate and strategic economic choices that go beyond power generation and meeting emissions targets. Otherwise, the country will be walking into a future where oil is no longer dependable, yet nothing else has been built strongly enough to pay the bills as oil did.

Isah Kamisu Madachi is a policy analyst and development practitioner. He writes from Abuja and can be reached via [email protected]

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Why Access Champions Africa’s Biggest Race

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roosevelt ogbonna access bank

On a particular Saturday each February, before dawn breaks over Lagos and thousands of participants prepare for the event, the city is filled with an unmistakable sense of anticipation. Roads typically bustling with traffic become thoroughfares devoted to new possibilities. Whether it is first-time runners adjusting their bibs or elite athletes focusing on the challenge ahead, a recurring question arises in both public discourse and executive meetings: What motivates Access to consistently support Africa’s largest road race year after year?

The response does not lie merely within sponsorship objectives or marketing strategies. Rather, it emanates from a philosophy of leadership, one that recognises institutions as interconnected with society, measuring true success by purpose, people, and enduring social impact, not solely by financial outcomes.

For Access, the Lagos City Marathon is a statement of belief in Africa’s potential, a commitment to collective progress, and a powerful reflection of the values that guide how we build businesses and engage with communities across the continent.

Marathon as Metaphor for Africa’s Journey

A marathon is not won in the first kilometre. It demands patience, resilience, discipline, and an unshakable belief in the finish line, even when it feels impossibly far away. These qualities mirror Africa’s own development journey and the realities of building enduring institutions on the continent.

Access sees the marathon as a living metaphor for what it takes to create sustainable impact. Growth is rarely linear. Progress often comes with setbacks. But those who stay the course, who invest consistently, and who keep moving forward ultimately create lasting change. This philosophy shapes how we approach banking, partnerships, innovation, and leadership.

Supporting Africa’s biggest road race is therefore not incidental. It reinforces the idea that success, whether personal, corporate, or national, is built through long-term commitment rather than short-term wins.

People at the Centre of Progress

What makes the Lagos City Marathon truly special is its inclusivity. On race day, the streets belong to everyone: professionals running for personal bests, young people discovering the joy of movement, families cheering from the sidelines, and communities coming together in shared celebration.

This diversity reflects Access’s people-first philosophy, believing that progress is most powerful when it is inclusive, when platforms are designed to welcome participation rather than privilege exclusivity. By championing the marathon, we invest in a space where people from all walks of life are united by a common goal: to push beyond perceived limits.

Leadership Beyond Profit

Today’s business environment demands more from corporate leaders. Stakeholders increasingly expect institutions to contribute meaningfully to society, not as an afterthought, but as an integral part of strategy. Access embraces this responsibility.

Championing the Lagos City Marathon is one of the ways leadership is projected from Access. It is an opportunity to demonstrate what values-driven leadership looks like in action. The race promotes physical and mental wellness, encourages healthy lifestyles, and reinforces the importance of balance,lessons that are as relevant in the workplace as they are on the road.

More importantly, it shows that leadership is not about standing apart from society, but about standing with it. Running alongside communities. Investing in shared experiences. Creating platforms that inspire confidence and ambition, especially for young Africans who are redefining what is possible.

Economic and Social Impact That Lasts

The impact of the marathon extends far beyond race day. Each edition generates economic activity across multiple sectors, hospitality, transportation, logistics, retail, media, and tourism. Small businesses thrive, jobs are created, and local vendors benefit from increased footfall.

By attracting international runners and visitors, the marathon positions Lagos as a global destination capable of hosting world-class events. It challenges outdated narratives and showcases Nigeria’s ability to deliver excellence at scale. This visibility matters, not just for the city, but for the continent.

Building a Legacy of Inspiration

Perhaps the most enduring value of the marathon lies in inspiration. For many runners, crossing the finish line is a personal victory, proof that they can commit, endure, and succeed. For spectators, it is a powerful reminder of human potential and collective spirit.

These moments matter. They shape mindsets. They encourage people to set bigger goals, whether in health, career, or community. They reinforce the belief that with the right support and determination, progress is possible.

Access champions this race because of the belief that Africa deserves platforms that inspire millions to move, dream, and achieve more.

Leading the Long Race Together

Leadership, like a marathon, is not a sprint. It requires vision, endurance, and the willingness to keep going even when results are not immediate. Access is committed to running this long race with Africa, investing in people, institutions, and platforms that drive sustainable growth.

As runners take their marks every February, we are reminded that progress is built one step at a time. By championing Africa’s biggest road race, Access shows its belief in collective effort, long-term impact, and the power of leadership that moves with society, not ahead of it, and never apart from it.Because when Africa runs, we all move forward.

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