Feature/OPED
The Politics of Ministerial Appointment and Senate’s Screening
By Omoshola Deji
After several knocks and post-inaugural countdown by Nigerians and the media, President Muhammadu Buhari bowed to pressure. He sent 43 ministerial nominees name to the Senate for screening.
This action relit the Buhari leadership competence debate. The Buhari apologists applaud the president for making such crucial nominations in almost two months of his second term; a radical improvement from the first term which took him six months.
On the other hand, the opposition contends that Buhari’s ministerial nominees list is uninspiring and untimely. They knock Buhari for not imitating Cyril Ramaphosa of South Africa and Boris Johnson of the United Kingdom who constituted their cabinets immediately after swearing-in.
Without further ado, the Buharists averred that the Nigerian political climate and workings is different from that of South Africa, the United Kingdom, or any other country.
Weighing in, this piece examines the factors that influenced Buhari’s choice and the nominee’s capacity to accomplish the Next Level agenda. It also appraises the quality of Senate’s screening and the relevance of the bow-and-go tradition.
The Lucky 43
Most of the political heavyweights in Nigeria survive on politics. Subtract all they’ve acquired through politics from their asset and you’ll realize why they spare nothing to perpetuate themselves in power.
Those who lose elections and those who’ve served their term lobby for appointments. The Minister position is the most sought after. Not many lobby to be Ambassadors. They refrain from residing outside the country in order not to lose their political relevance and structures.
The president’s declaration that he would appoint only those he knows sent shivers down the spine of the hundreds lobbying for ministerial appointment. Many of them have not more than a distant political relationship with the president, but they were not deterred. They all intensified their lobbying through the first lady, the party chairman, and powerful presidential aides, but only 43 got selected.
Facts from 43
The 43 nominees comprise of 36 males and 7 females. Buhari didn’t fulfil his promise of giving 35 percent appointments to women. The youths are not represented as all the nominees are above 35 years.
Per geopolitical zone, Buhari nominated 9 persons from the North West, 7 from the North East; 7 from the North Central; 7 from the South West; 7 from the South South; and 6 from the South East. Note that four zones has 7 nominees each, while the Northwest and Southeast has the highest (9) and lowest (6) nominees. The southeasterners are displeased with the margin. They are upset that Buhari selected nominees based on the votes he garnered per region.
During the last presidential election, Buhari scored 5,995,651 votes in the Northwest and a meagre 403,968 votes in the Southeast. It is thus politically not irrational for the Northwest to get more appointment than the Southeast.
Moreover, the Northwest is made up of 7 states while the Southeast has 5. Notwithstanding, Buhari’s antecedent suggests that he would have picked less than 7 nominees from the Southeast, if the constitution didn’t mandate him to appoint ministers from every state.
One state in each region has two nominees, except the region where Buhari hails from: the Northwest. Two states in the region, Kano and Katsina have 2 nominees each. This is apparently because Buhari earned more votes in Kano than other states and Katsina is his state of origin.
Abuja, the federal capital territory had no nominee. Some argue that Buhari excluded Abuja because the residents didn’t vote for him. That can’t be the case. The exclusion is most certainly an error the presidency is planning to correct.
Team 43 for 2023?
Retaining power in 2023 largely influenced Buhari’s ministerial choice. Majority of his nominees are career politicians who are more skilled in coordinating campaigns than providing good governance. Buhari is probably unmindful that the challenges bedeviling Nigeria requires the service of professionals, not politicians.
His nominees comprise of 9 ex-governors, ex-lawmakers, and 12 immediate past ministers. 31 nominees are new to the job; an indication that Buhari is not so pleased with the performance of their predecessors or simply wishes to change hands. That does not however tone down the obvious: Buhari sacrificed effective governance for political continuity.
It’s a season of political harvest for Buhari’s loyalists. The ministerial nominees list is an indication that those who worked assiduously for him in 2015 and 2019 would be enormously rewarded. The 43 prospective ministers are a perfect election winning squad. Buhari carefully selected the leading political lords across the states. He nominated the strong who lost elections to keep them active for 2023.
The stakes are getting high. Politicians with weak political structures are being discarded for the influential and powerful. Audu Ogbeh was replaced with George Akume who has many political disciples and a large pocket. Godswill Akpabio and Rotimi Amaechi are being re-energized to install APC in Akwa-Ibom and the South-South. Gbemisola Saraki’s is being strengthened to decimate Bukola Saraki’s political machineries. Olorunimbe Mamora’s nomination has further strengthened team Lagos and Bola Tinubu’s commitment to the 2023 project. Chris Ngige was reappointed to put structures in place for APC to win Anambra.
Timipre Sylva’s is being empowered to revive APC for victory in the forthcoming Bayelsa governorship election. Festus Keyamo is being wired for the 2023 governorship race in Delta State. Emeka Nwajiuba is being tasked to reunite APC and win Imo. The ministerial hopefuls are indeed a perfect election winning squad.
Their appointment is to empower them with the federal might and resources they need to deliver victory for the APC in 2023. But one major thing that would determine whether 2023 would be theirs is their ability to take Nigeria to the next level.
The Next Level
The president’s ditching of technocrats for politicians who has no record of exceptional performance in public service may make his administration unpopular. He should have appointed technocrats to kick-start the implementation of his Next Level programs and keep them in office for at least two years.
He could then bring in the politicians to continue. The technocrats shouldn’t be sacked. They should be retained as consultants to periodically offer professional advice and assist in formulating government policies. You may disagree with this position, but you can’t help agreeing that it is sensible to start a project with professionals who truly understands what to do and how to do it.
Ministerial appointments should be based on merit, not clout. Buhari must align with the national assembly to pass bills that would make politics unprofitable and corruption punishable by death, if he really wants to make a difference. He must also desist from placing politics above policy. The technocrats he nominated such as Sunday Dare and Pauline Tallen are too insignificant. Be expectant not. The assembled nominees have no solution to Nigeria’s multidimensional problems and would leave the nation worse than they met it. They would most certainly usher Nigeria into greater poverty, insecurity, inflation, and recession. Buhari has the capacity, but lacks the will to turn things around. So also the Ahmed Lawan led Senate.
The Quality of Senate’s Screening
Sending names of ministerial nominees to the Senate with their portfolios is one of the change Nigerians voted for, but never got. This has remarkably hindered the senate from properly grilling the nominees, who also cannot present their goals because they don’t know the ministries they’ll lead.
The screening is fruitless. Ministerial nominees are proving their capacity, and the senate is assessing their ability to head a ministry they both don’t know. This fatal, but avoidable error makes the screening a valueless and purposeless exercise.
It is disheartening that the screening is more of endorsement than assessment. The senators’ asininity is shameful and disturbing. They were unable to ask salient questions, quote statistics, reference global happenings, and give recommendations that can move Nigeria forward. They were also unable to correct the erring and over ambitious nominees. None of them could educate Festus Keyamo that the Attorney General, an appointee of the executive, cannot unbundle the Supreme Court that is under another arm of government, the judiciary.
Nigerians are disappointed. Many are casting doubt on Senate President Ahmed Lawan’s capacity to objectively legislate and oversight. He is accused of rubber stamping. Lawan must swiftly redeem his reputation by providing quality leadership. Loyalty to the party and the presidency should not push him to be acting against public interest.
The Bow and go Soft-landing
The bow and go privilege for ex-lawmakers has outlived its significance. Asking nominees to bow and go without answering questions is a disservice to the nation. Lawmaking and administrating require different skills. That the nominees performed when they’re lawmakers – most actually didn’t – does not mean they would perform as ministers. Some of them never contributed to debates or sponsored bill when they were in parliament. Think. Does it mean that the Senate would ask all the 43 nominees to bow and go if they’re all ex-lawmakers?
It is appalling that 10 of the first 14 nominees screened by the Senate were asked to bow and go. Apart from the ex-lawmakers, nominees were asked to bow and go because they are handsome and loyal. Richard Adebayo was asked to bow and go because he is the current Deputy National Chairman (South) of the APC. A nominee from the Senate President’s state also benefited.
Some nominees were asked to bow and go because they are women. Majority of the ex-ministers who should be asked to give an account of their stewardship and why Nigerians should reemploy them were just asked to bow and go. Rotimi Ameachi was awarded the privilege because he is an ex-Speaker of Rivers State House of Assembly; a position he occupied over 12 years ago. The bow and go privilege shouldn’t be a free-for-all or life time benefit. It has been brazenly abused and should be abolished. The world is moving and Nigeria must move along. We must adopt better ways of doing things for us to have a better nation.
Omoshola Deji is a political and public affairs analyst. He wrote in via mo******@***oo.com
By Sani Abdulrazak, PhD
The fundamentality of securing our lives and property, especially in Northern Nigeria, cannot be overemphasised. Any other responsibility comes after this for a responsible government. Sadly, for close to two decades, Northern Nigeria has been a gallows of despair, rape, and death. From banditry and freelance killings that scratch, pierce, and are ruining the North West, to the bloody insurgency that barks and bites in the North East, to farmers-herder conflicts in the North Central, leaving behind a scorching trail of rancour and sorrow of unimaginable proportion for millions, Kaduna State was one of the worst-hit states in terms of banditry and kidnappings, ethno-religious conflicts, and freelance killings.
But in the last three years, the state has metamorphosed into one of the most peaceful in the region via the Kaduna Peace Model. More so, the recent endorsement of the Kaduna Peace Model by the Human Rights Writers Association of Nigeria (HURIWA) deserves thoughtful examination rather than unquestioning acceptance. HURIWA’s position has brought renewed attention to Kaduna State’s approach to conflict management and peacebuilding. The endorsement raises an important policy question: Has Kaduna developed a governance model capable of reducing conflict in a sustainable manner, and if so, why have other northern states not moved to adapt it? These questions deserve answers rooted in facts rather than political loyalties.
The phrase “Kaduna Peace Model” does not point to or refer to a single law, policy document, or institutional framework. Rather, it describes an evolving approach that combines conventional security operations with community engagement, dialogue among stakeholders, collaboration with traditional and religious institutions, support for security agencies, conflict mediation, and development interventions in communities affected by violence. Instead of relying exclusively on military responses, the approach seeks to address some of the social and political conditions that often sustain insecurity. Whether this amounts to a distinct governance model remains open to debate. Nevertheless, it reflects a broader understanding that lasting peace requires more than the deployment of armed personnel. Security may suppress violence temporarily, but durable peace depends equally on trust, inclusion, justice, and economic opportunity.
The next question is unavoidable: Has the approach worked?
The evidence suggests that Kaduna today presents a different security picture from that of three years ago, although not an entirely peaceful one. Around 2023, the state remained one of Nigeria’s most violence-affected regions. Conflict trackers documented frequent attacks, kidnappings, and communal violence, with 85 recorded conflict incidents resulting in 261 fatalities in the final quarter of 2023 alone. Entire communities lived under constant fear, farming activities were disrupted in several local government areas, and many roads within the state became synonymous with insecurity.
Recent years, however, indicate a significant degree of improvement in almost all parts of the state. Some communities have resumed agricultural activities, commercial movement has improved along previously troubled corridors, and government engagement with local communities has become more visible. These developments suggest that violence has, in almost all areas of the state, reduced in intensity. Yet such observations should not be mistaken for a declaration of victory.
A meaningful assessment, however, goes beyond casualty figures alone. It must also consider whether displaced persons have returned home, whether schools operate without interruption, whether farmers cultivate their lands without fear, whether markets function normally, and whether citizens genuinely perceive improvements in their daily security. Peace, as we know it, is not merely the absence of gunfire; it is the restoration of ordinary life.
It is within this context that HURIWA’s endorsement should be understood.
Civil society organisations play an important role in recognising promising governance practices, encouraging innovation, and stimulating public debate. Their endorsements can influence policy conversations and encourage governments to learn from one another. However, endorsements are neither official certifications nor substitutes for independent evaluation. Every governance model, regardless of who praises it, must remain open to scrutiny, evidence, and continuous improvement.
The larger question, therefore, is whether the Kaduna experience can be replicated elsewhere across Northern Nigeria.
It is a fact that certain principles underlying the Kaduna approach are broadly applicable. Community dialogue, cooperation between government and traditional institutions, investment in local peacebuilding, and stronger collaboration with security agencies are strategies that have relevance beyond Kaduna’s borders. But due to the non-uniformity and complexity of the hydra-headed nature of insecurity across Northern Nigeria, it becomes almost impossible for the model to work across the whole of Northern Nigeria. The security dynamics of Kaduna differ from those of Zamfara, Katsina, Sokoto, Niger, Benue, Plateau, or Borno. Banditry, communal conflicts, terrorism, farmer-herder disputes, and transnational criminal networks vary significantly in their causes and manifestations. A strategy that succeeds in one environment cannot simply be copied into another without adjustment.
This probably explains why other northern governors have not simply adopted what is popularly described as the Kaduna Peace Model. Effective governance is context-specific. Every state possesses different demographic realities, institutional capacities, historical grievances, and security challenges. Replication without adaptation risks producing disappointing outcomes. If northern states are to draw lessons from Kaduna’s experience, several adjustments are necessary. Independent conflict assessments should precede policy adoption. Local governments must become stronger partners in peacebuilding. Traditional and religious leaders should be integrated into structured dialogue mechanisms rather than informal consultations alone. Reliable security data should guide decision-making, while transparent monitoring systems should measure outcomes beyond political narratives. Economic recovery, youth employment, and access to justice must complement security interventions if peace is to endure.
Despite its widely acknowledged contributions to reducing insecurity and fostering dialogue over the past three years, the Kaduna Peace Model is not without significant shortcomings. One of its most notable weaknesses is the absence of a clearly documented framework that defines its philosophy, guiding principles, operational structure, implementation strategy, monitoring indicators, and evaluation mechanisms. Consequently, much of what is described as the “Kaduna Peace Model” exists in practice rather than in a codified, replicable document, making independent assessment, institutional continuity, and adaptation by other jurisdictions difficult. Furthermore, the model remains heavily dependent on the commitment of the incumbent political leadership, raising concerns about its sustainability beyond the current administration. While it has contributed to stabilising many communities, it has yet to comprehensively address the underlying structural drivers of conflict, including competition over natural resources and historical grievances, and questions persist regarding transparency, measurable performance indicators, accountability, and the extent of participation by women, youth, victims, and other marginalised groups. These limitations suggest that although the model has demonstrated practical value, its long-term effectiveness would be strengthened through formal documentation, institutionalisation, a robust implementation framework, and regular independent evaluation.
Possibly the greatest lesson from Kaduna is not that it has discovered a perfect formula for peace. No society has. Rather, it demonstrates that conflict management increasingly demands governance approaches that extend beyond military deployments alone. Therefore, HURIWA’s endorsement should not be viewed as the conclusion of the conversation but as its beginning. Whether the Kaduna Peace Model becomes a genuine reference point for other states will depend less on public commendation than on rigorous evidence, independent evaluation, and its ability to produce durable improvements in the lives of ordinary citizens.
In governance, therefore, the true measure of peace is not the number of endorsements the Kaduna Peace Model receives. It is the number of lives it has protected, the communities restored, and the confidence with which citizens wake each morning believing that tomorrow will be safer than yesterday.
Sani Abdulrazak, PhD, is a writer, researcher and public affairs analyst based in Zaria, Kaduna State
Feature/OPED
$40bn Net Reserves, Record Wealth, Relentless Poverty: Who Is Nigeria’s Economy Serving Today?
By Blaise Udunze
No doubt, it was a welcome announcement that Nigeria’s net foreign exchange (FX) reserves have surged by an astonishing 1,233 per cent from about $3 billion to over $40 billion. This would ordinarily be the kind of economic milestone that inspires optimism, coupled with gross external reserves of about $52.52 billion, which are sufficient to finance roughly 11 months of imports of goods and services. Penultimate week, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, presented the development at the end of the 306th meeting of the apex bank’s Monetary Policy Committee (MPC) as evidence that its reforms are working.
It is no surprise that around the same period, one would say that another important economic event occurred with the government sharing more money than ever before with the federal, state, and local governments, as the Federation Account Allocation Committee (FAAC) distributed a record N2.55 trillion, representing an increase of N250 billion over the N2.3 trillion shared in the preceding month.
Of course, the official figures are impressive numbers. Yes, anyone would conclude that the economy is becoming stronger, more stable and better positioned for growth. While this suggests stronger public finances, it also raises the question of whether these larger allocations are producing tangible improvements in the lives of ordinary Nigerians. More interesting is that another set of figures tells a completely different story.
According to the World Bank’s newly approved Country Partnership Framework for Nigeria, 61 per cent of Nigerians now live below the poverty line, while about 79 per cent are either poor or vulnerable to falling into poverty. More than 139 million Nigerians live below the poverty line. Over 86 million people lack access to electricity, while millions of young Nigerians enter the labour market every year with little prospect of decent employment.
The contradiction could not be starker. If reserves are rising, government revenues are increasing, and governments at all levels are receiving record allocations, why are the lives of ordinary Nigerians becoming more difficult?
This is the question policymakers must answer not with statistics, but with tangible improvements in the lives of citizens. If government agencies engineering these figures must know, these are not merely economic statistics; they are the lived realities by which citizens judge any government.
Foreign exchange reserves are not an economic trophy. They are a means to an end. Strong reserves are expected to stabilise the currency, reassure investors, strengthen the country’s ability to withstand external shocks and create an enabling environment for investment, production and employment.
But reserves alone do not feed families nor would they reduce their housing rents. They do not lower transport fares. They do not reduce school fees. They do not make healthcare affordable. Nor do they automatically create jobs.
Ultimately, this is to say that the success of macroeconomic reforms must be measured not by the strength of the CBN’s balance sheet but by the wellbeing of the Nigerian people.
Historically, unlike our dear country, countries that consistently build substantial foreign exchange reserves do so on the back of strong economic fundamentals. The fact is that they maintain sustained trade surpluses, export diversified products, attract large volumes of long-term foreign direct investment (FDI), develop globally competitive manufacturing industries and continuously improve productivity.
Nigeria, unfortunately, still struggles on nearly all these fronts. The country’s export earnings remain overwhelmingly dependent on crude oil. Non-oil exports remain relatively insignificant. Value-added manufacturing exports are weak. Another area that raises concern is agriculture, which continues to export mostly raw commodities rather than higher-value processed products despite being known previously as the country’s mainstay. With all these so-called developments, Nigeria still imports refined petroleum products, machinery, pharmaceuticals, industrial inputs and even food that could be produced locally.
This naturally raises an uncomfortable but legitimate question that requires an answer. Yes, it would be necessary to ask: How exactly has Nigeria grown and accumulated over $40 billion in net foreign exchange reserves without the structural fundamentals that typically support such reserve growth?
The apex bank has continued to credit exchange-rate reforms, improved transparency, stronger investor confidence and increased diaspora remittances. Well, it would be said that these achievements deserve recognition.
However, they do not completely explain the scale or, more importantly, the sustainability of the reserve accumulation.
Nigeria has not consistently recorded the large trade surpluses associated with countries that rapidly accumulate reserves. Oil production remains below historical capacity. Export diversification remains limited. Ease of doing business continues to be constrained by multiple taxation, infrastructure deficits, insecurity, policy uncertainty, logistics bottlenecks and unreliable electricity.
Without addressing these structural deficiencies, reserve accumulation risks becoming more financial than productive.
Equally important is the question of foreign direct investment. Governor Cardoso has argued that improved macroeconomic stability is attracting foreign investors. That may well be true. But confidence alone does not build factories.
The real question is how much fresh FDI has actually entered Nigeria’s productive sectors? How much has gone into manufacturing? How much into agro-processing? How much into export-oriented industries capable of generating sustainable foreign exchange earnings and creating jobs?
If reserve growth is being driven largely by short-term portfolio investments attracted by high interest rates rather than long-term productive investment, then Nigeria remains vulnerable. Portfolio investors can exit as quickly as they entered whenever global financial conditions change.
The unarguable fact is that foreign direct investment, by contrast, creates factories, expands production, develops supply chains and creates lasting employment. Nigeria desperately needs more of the latter.
The CBN also points to diaspora remittances as a growing source of reserve accumulation, projecting inflows of approximately $1 billion every month before the end of the year. Again, this is encouraging.
Again, the country will not be tired of asking questions because several of these questions deserve closer examination. How much of these remittances represent genuinely new inflows rather than funds previously routed through informal channels? Come to think of it, how much of these remittances finance productive investments instead of household consumption? Can diaspora remittances realistically become a permanent substitute for export competitiveness?
No economy has ever industrialised on remittances alone. A nation cannot sustainably depend on the sacrifices of its citizens abroad while failing to create opportunities for them at home.
Beyond the reserve figures lies another troubling contradiction. This is more disturbing because every month, FAAC distributes unprecedented sums to governments across Nigeria. Yet again, with daily regret, the average Nigerian struggles with deteriorating public services.
Honestly speaking, it has become so frustrating that the majority of the people who yearn for pleasant or attractive experiences are struggling as roads remain poor, public hospitals remain overstretched, schools continue to decline, electricity remains unreliable, water infrastructure remains inadequate, and youth unemployment remains widespread. Worst still, think of the cases as the nation continues to grapple with rising inflation, worsening poverty, declining purchasing power, struggling businesses and persistent insecurity.
One major contradiction is that if revenues continue rising while poverty deepens, then one unavoidable question must be asked: Where is the money going? Another pertinent question: How can the citizens be surrounded by water and still suffer from thirst or soap lather in their eyes?
This has been the predominant worry in the minds of many even as the World Bank itself acknowledges this disconnect. While praising recent macroeconomic reforms for improving fiscal stability, strengthening foreign reserves and restoring investor confidence, it concludes emphatically that the gains have not translated into meaningful improvements in living standards.
Ironically, despite the claims of declining inflation, it continues to erode purchasing power. Social protection remains weak. Most Nigerians remain trapped in low-productivity informal employment.
One contradicting and astonishing step taken recently is nowhere more evident than in the Central Bank’s monetary policy. Consider this: despite a marginal decline in headline inflation to 15.91 per cent in June 2026, the Monetary Policy Committee retained the benchmark Monetary Policy Rate (MPR) at 26.5 per cent, alongside a 45 per cent Cash Reserve Ratio (CRR) for commercial banks.
The decision reflects understandable caution. The CBN remains concerned that escalating geopolitical tensions in the Middle East could increase global energy prices, worsen imported inflation and reverse recent gains in price stability.
From a monetary policy perspective, this caution is defensible. But from the standpoint of businesses and households, the consequences are profound. An interest rate of 26.5 per cent inevitably translates into prohibitively expensive bank lending.
The ripple and adverse effects have led to manufacturers struggling to finance expansion. Another tough aspect is seeing the small and medium-sized enterprises, the backbone of employment generation, find access to affordable credit increasingly difficult. Entrepreneurs postpone investments. Factories delay expansion. Potential employers reduce hiring. Economic growth slows.
Ironically, while it is understandable that high interest rates may help stabilise inflation and attract foreign portfolio inflows that support reserves, it should be made known that they simultaneously suppress domestic investment, production and job creation.
In other words, the same policies helping strengthen the country’s macroeconomic indicators may also be constraining the real economy. Even the celebrated decline in inflation deserves closer scrutiny.
The national inflation rate may have eased marginally to 15.91 per cent, but this national average masks severe hardship across much of the country, which continues to create perpetual pain.
How best can this be figured out if data from the National Bureau of Statistics show that 19 states and the Federal Capital Territory recorded inflation rates exceeding 30 per cent, with Niger State above 42 percent and Kogi State exceeding 41 per cent?
Food inflation continues to rise, driven by increases in the prices of tomatoes, pepper, beef, yams, garri and other staple foods.
Businesses themselves remain unconvinced. The Organised Private Sector has welcomed the marginal moderation in inflation but insists that prices remain painfully high for both consumers and businesses.
Leaders of small business associations argue that market realities tell a different story from headline statistics. For millions of Nigerians, inflation is not measured by percentages. It is measured by empty shopping baskets. By reduced meal portions. By businesses shutting their doors. By families withdrawing children from school. By postponed medical treatments.
From a theoretical standpoint, macroeconomic stability is undoubtedly necessary. Without it, sustainable development is impossible. But it would also be agreed that macroeconomic stability alone is not sufficient. It can be argued further that economic reforms must eventually improve household incomes, reduce poverty, expand productive employment and raise living standards.
Otherwise, they risk becoming reforms that look impressive in economic reports but remain invisible in everyday life.
The truth remains that with the current situation, Nigeria therefore stands at a critical pivotal moment and the decisions taken now will determine its future.
The current reserve position should not become a destination for celebration but a foundation for deeper structural transformation. The country must diversify exports beyond crude oil. Strengthen manufacturing. Promote value-added agricultural exports. Improve electricity supply. Reduce the cost of doing business. Expand logistics infrastructure. Attract long-term productive investment.
In addition, support local industries with affordable financing. Strengthen institutions. Improve governance and ensure greater accountability for public spending. Only then will rising reserves translate into rising prosperity. Only then will record FAAC allocations produce visible development. Only then will macroeconomic stability become household stability.
The ultimate measure of economic success is not the number of dollars held in the Central Bank’s vaults. It is whether parents can afford school fees and housing rent. Whether young graduates can find decent jobs. Whether businesses can borrow, produce and expand. Whether families can afford food without sacrificing nutrition. Whether citizens feel that economic growth includes them.
Until those questions receive positive answers, one uncomfortable question will continue to linger. Who Is Nigeria’s Economy Serving Today?
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: bl***********@***il.com
By Henry Obiekea
Nigeria’s banking industry is entering one of the most significant transformation periods since the 2005 banking consolidation exercise. The Central Bank of Nigeria’s (CBN) ongoing recapitalisation programme is more than a regulatory requirement—it is a strategic investment in the country’s financial future. If implemented successfully, it has the potential to strengthen financial stability, deepen credit access, improve investor confidence, and support a more inclusive and resilient economy.
In March 2024, the CBN announced new minimum capital requirements for commercial, merchant and non-interest banks. Under the new framework, international commercial banks are required to maintain a minimum paid-up capital of ₦500 billion, national commercial banks ₦200 billion, and regional commercial banks ₦50 billion. Merchant banks are required to hold ₦50 billion, while national and regional non-interest banks are required to maintain ₦20 billion and ₦10 billion respectively. The policy reflects the realities of today’s economy, where inflation, currency depreciation and expanding financial demands have significantly altered the capital required to support sustainable banking operations.
Many institutions have responded through rights issues, public offers, private placements, mergers and acquisitions in pursuit of the revised capital requirements. Beyond regulatory compliance, the exercise is already encouraging stronger governance, better capital planning and increased investor participation within Nigeria’s financial markets.
The recapitalisation conversation, however, extends beyond deposit money banks. The CBN has also introduced revised capital requirements for microfinance banks, recognising the critical role they play in extending financial services to underserved individuals, nano businesses and small enterprises. As the financial landscape becomes increasingly digital, stronger capital bases will enable these institutions to invest in technology, cybersecurity, risk management and product innovation while maintaining public confidence.
For Nigeria’s rapidly growing fintech ecosystem, although they are subject to different licensing frameworks depending on their operations, the broader regulatory direction is equally clear. Institutions that facilitate payments, tech-enabled banking, lending and savings are expected to maintain governance, capital and consumer protection standards appropriate to their respective licensing frameworks. This evolution is essential as fintechs continue to account for a growing share of financial transactions and provide services to millions of previously underserved Nigerians. Collectively, these reforms present a unique opportunity to reshape Nigeria’s financial ecosystem.
A stronger banking sector creates stronger economic outcomes. Well-capitalised financial institutions are better positioned to finance infrastructure, manufacturing, agriculture, housing and technology. They possess greater capacity to absorb economic shocks, support long-term lending and withstand periods of market volatility. More importantly, they can extend larger volumes of prudently underwritten credit to businesses that create jobs and stimulate economic growth.
For small and medium-sized enterprises, which contribute significantly to Nigeria’s GDP and employment, improved access to financing remains one of the greatest growth enablers. Recapitalisation should not be assessed solely by stronger balance sheets, but also by the extent to which additional capital supports productive economic activity.
Despite remarkable progress over the last decade, millions of Nigerians remain underserved by formal financial institutions. Expanding financial inclusion requires complementary approaches across commercial banks, microfinance banks, fintechs and other regulated financial institutions. Achieving meaningful inclusion requires collaboration across commercial banks, microfinance banks, fintech companies and regulators. Each institution serves different customer segments, yet all contribute towards a common objective: bringing more Nigerians into the formal financial system.
At FairMoney Microfinance Bank, recapitalisation aligns with our continued investment in responsible lending, digital banking capabilities, sound risk management and financial inclusion. We believe technology can complement prudent credit assessment and help extend access to financial services for eligible individuals and businesses.
As the recapitalisation programme progresses, success should ultimately be measured by broader outcomes: stronger institutions, deeper financial inclusion, increased SME financing, enhanced consumer confidence and sustained economic growth. Capital itself does not transform economies; how that capital is deployed does.
The Federal Government and the Central Bank of Nigeria have introduced reforms aimed at strengthening the long-term resilience of the financial sector. Continued implementation of these reforms will be important in supporting financial stability and sustainable sector growth. These decisions require vision, consistency and regulatory discipline. While the adjustment process may present short-term challenges for some institutions, the long-term benefits for financial stability, investor confidence and economic development far outweigh the costs.
Nigeria possesses one of Africa’s most dynamic financial services sectors. With stronger capital foundations, responsible innovation and continued collaboration between regulators and financial institutions, the country is well positioned to build a banking ecosystem capable of supporting its development ambitions, empowering millions more individuals and businesses, and supporting inclusive economic development over the long term.
Henry Obiekea is the Managing Director of FairMoney Microfinance Bank
