President Bola Ahmed Tinubu has urged Nigerian banks to reduce their reliance on government securities and increase lending to businesses, infrastructure and other productive sectors of the economy.
Tinubu made the call at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja.
The President, who was represented by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the banking sector must help transform recent economic stability into stronger private-sector growth.
According to him, attractive returns on government securities had made lending to businesses less attractive to banks over the years.
He, however, said improving fiscal conditions should create more room for increased private-sector credit.
“So, from financing government, we need to move to financing growth,” Tinubu said.
Tinubu links recapitalisation to business lending
The President said stronger fiscal discipline would reduce pressure on government borrowing, while lower inflation could support reduced interest rates.
He explained that cheaper capital would encourage investment, production, job creation and higher incomes.
Tinubu also said the recently completed bank recapitalisation must go beyond strengthening banks’ balance sheets.
He stressed that the additional capital should translate into increased financing for Nigerian businesses and support their expansion across Africa.
“A bigger bank that does not finance a more productive economy is a sub-optimal outcome,” he said.
To encourage lending to productive sectors, Tinubu said the Federal Government was expanding guarantees, risk-sharing arrangements, blended finance and credit enhancements.
He identified the National Credit Guarantee Company as central to the strategy.
According to him, the measures would reduce lending risks and attract more private capital into productive investments rather than relying mainly on direct government funding.
President wants more long-term capital for infrastructure
Tinubu also called for increased mobilisation of long-term capital for infrastructure, industry, housing and energy.
He said Nigeria could not finance long-term development primarily with short-term funds.
The President urged deeper capital markets and stronger pension, insurance and asset-management sectors to mobilise domestic savings and foreign capital for long-term investment.
He added that Nigeria must compete aggressively for international capital because investors are primarily attracted by risk-adjusted returns.
“Capital is highly mobile. It is neither emotional nor patriotic; it goes where risk-adjusted returns are attractive and competitive,” he said.
Tinubu further said Nigeria was expected to return to the JPMorgan Bond Index soon, while the country’s capital market had recorded about 60 per cent year-to-date growth.
He said the developments reflected improving investor confidence and provided an opportunity to attract more capital for productive investment.
Tinubu identifies five priorities for financial sector
The President identified five priorities for building a resilient financial system: growth facilitation, inclusion, technology, long-term capital and trust.
On financial inclusion, he said having a bank account alone was not sufficient.
He argued that genuine inclusion should enable market women and young entrepreneurs to access affordable working capital based on viable cash flow rather than collateral they may not have.
On technology, Tinubu said artificial intelligence, open banking, digital identity and instant payments were transforming financial services.
He, however, warned that rapid digital expansion was also creating new vulnerabilities.
“Cybersecurity is now financial stability infrastructure,” he said, while calling for stronger data protection and fraud prevention.
Banks urged to support Nigerian businesses across Africa
Tinubu also urged banks to help Nigerian businesses become regional champions by financing exports and expansion through the African Continental Free Trade Area (AfCFTA).
He said the continental market, with more than 1.4 billion people, presented significant opportunities for Nigerian businesses.
The President urged banks to help transform micro-enterprises into large companies while redirecting capital from speculation towards production.
CBN says economic stability is returning
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, represented by the Deputy Governor, Economic Policy, Philip Ikeazor, said Nigeria’s macroeconomic stability was gradually returning.
He said monetary and fiscal authorities were working more closely together but acknowledged concerns about when ordinary Nigerians would begin to feel the impact of the improving indicators.
According to him, the benefits were expected to reach Nigerians as the collaboration between both authorities continued.
Cardoso said the authorities were working towards bringing inflation permanently into single digits and were engaging state governments because subnational governments also contribute to inflationary pressures.
He also credited banks for accepting the burden associated with the CBN’s cash reserve requirement as part of efforts to restore economic stability.
The CBN governor said the apex bank had incurred substantial costs in managing liquidity, while banks and fiscal authorities had also faced the effects of tighter monetary conditions.
He added that Nigeria’s economic buffers had been tested by external shocks, including the Iran conflict, but remained sufficient to withstand the disruption.
CIBN proposes SME hubs nationwide
The President of CIBN, Dele Alabi, called for the establishment of scalable SME Hubs across Nigeria to connect small businesses with infrastructure, skills, technology, markets and finance.
Alabi said many micro, small and medium enterprises remained constrained by high operating costs, inadequate infrastructure, limited market access, low productivity and insufficient digital adoption.
He said the proposed hubs could reduce operating costs, improve the bankability of small businesses and create a stronger link between recapitalised banks and the real sector.
Alabi said the initiative formed part of the Institute’s IMPACT Vision, introduced after he became the 24th President and Chairman of Council in May.
He said the vision was designed to move CIBN from identifying industry problems to developing practical solutions focused on professional standards, capacity building and responsible innovation.
Alabi also warned that artificial intelligence and fintech were creating both opportunities and risks for the financial system, including cyber threats, data governance concerns, market concentration, job displacement and systemic risks.
