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Merger: CBN Considers Recapitalisation For Commercial Banks
The Governor of the Central Bank of Nigeria, Godwin Emefiele, has said that there are plans to carry out a recapitalisation exercise for commercial banks in the country.
Emefiele made this known on Monday, during the unveiling of the five-year plan of the apex bank.
Bank recapitalisation is the act of changing the capital structure of a bank to provide more equity funds to meet the bank’s long-term financing needs to ensure the security of shareholders fund.
In July 2004, the CBN announced the recapitalisation of the banking sector from N2 billion to N25 billion with effect from December 31, 2005. This led to the reduction in the number of banks to 24 from 89.
He said: “We will continue to improve our on-site and off-site supervision of all financial institutions while leveraging on data analytics and our in-house experts across different sectors to improve our ability to identify potential risks to the financial system as well as risks to individual banks
“In the next five years, we intend to pursue a programme of recapitalising the Nigerian banking industry so as to position Nigerian banks among the top 500 in the world.
“Banks will, therefore, be required to maintain a high level of capital as well as liquid assets in order to reduce the impact of an economic crisis on the financial system. With a rise in digital payment and cybersecurity threats.”
According to Emefiele, the apex bank will continue to defend the naira within the next five years as there are no plans to float the naira. He said this would “reduce the impact that exchange rate volatility could have on our economy”.
Former lawmaker, Senator Shehu Sani, has described the planned increase in electricity and telecom tariffs as unconscionable.
The statement comes after the telecoms regulator last week approved the increase in mobile tariffs.
The federal government also recently said that plans were ongoing to increase electricity tariffs “over the next few months.”
However, Sani, who said the government’s plan is unreasonable, insisted that it should be halted.
The ex-lawmaker also expressed his support for the Nigeria Labour Congress (NLC) over the scheduled protest against the government’s proposal, calling it a welcome development.
“The planned increase in electricity tariffs in the midst of poor power supply and the proposal to increase telecom tariffs is unconscionable and should be halted. The scheduled labour union protest is a welcome development,” he posted on X.
The United States President, Donald Trump, has revealed his decision to cut off all future funding to South Africa, citing poor treatment of “certain classes of people.”
Trump made this known on Sunday in a post on Truth Social, his social media platform.
According to Trump, South Africa was seizing land and mistreating some citizens without concern for the violations of their rights.
“South Africa is confiscating land and treating certain classes of people VERY BADLY.
“I will be cutting off all future funding to South Africa until a full investigation of this situation has been completed!” Trump wrote.
Reports suggest that the American leader may be defending White South Africans, some of whom have alleged that the South African policy is unfair to them.
There are indications that the federal government will on Monday meet with the Nigeria Labour Congress, NLC, to stop the planned Tuesday nationwide protest against the 50 percent telecommunications tariff hike.
A reliable source familiar with the matter, who preferred anonymity, disclosed this on Monday morning, noting that the meeting between the NLC leadership and the federal government is scheduled for 5 p.m. on Monday.
The source said the meeting was a “dialogue on matters of national interest as it affects Nigerian workers.”
According to the source, it will be an inter-ministerial meeting with the Secretary to the Government of the Federation (SGF), purposely to resolve issues raised by the NLC concerning the federal government’s approved upward adjustment to telecommunications tariffs, which the NLC, its allies, and others are vehemently opposing.
This comes as the NLC is already mobilizing workers for a mass protest tomorrow (February 4) against the 50 percent tariff hike approval.
On Thursday last week, in a letter to affiliate unions and state councils, NLC General Secretary Emma Ugboaja urged them to mobilize other Nigerians to send a serious message to the government.
The planned protest follows the 50 percent telecom tariff approval by the Nigerian Communications Commission (NCC) on January 20, 2025.
The approval had sparked widespread rejection among telecom subscribers.
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