The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso has disclosed that foreign investors are already moving funds into the country to invest in Nigerian banks under the ongoing recapitalisation exercise.
Cardoso who stated this at the Afrinvest 2024 Banking Sector Report Launch in Abuja, said that his team was vigilant and would not allow illicit funds into the Nigerian banking industry or allow bad people to take it over.
The Governor who was represented by the Acting Director of Financial Policy and Regulations, John Onoja, said the recapitalisation exercise would bolster federal government’s efforts towards achieving the $1 trillion economy goal by 2030.
His words, “The recapitalization exercise of the Nigerian banking sector is a pivotal strategy aimed at further strengthening the resilience of the Nigerian banks and promoting sound financial systems in Nigeria.
“Importantly, it will support the government’s goal to achieve a GDP of $1 trillion by 2030. As I listened to the panelists today, we are glad that the capitalization drive has become a factor that has ignited a lot of activities in all the sectors already.
“The impact of the capitalisation program, we all know, is definitely going to increase the lending capacity of the banks, because liquidity definitely is going to empower them to lend more to the relevant sectors, even like the panelists have indicated to us.
“Definitely, there are going to be increases in foreign investments. We are already seeing them; the foreign direct investments are already coming in. The banks can attest to that. Even the foreign exchange liquidity, we can see that a lot of them are through the certificates of capital importation; they are bringing in a lot of forex into the economy, which is going to also affect positively the liquidity situation in the forex market.
“We will rigorously enforce our Fit and Proper Persons criteria for new shareholders, for board members, for senior management, to ensure that there are no illicit funds that will flow into the system, there are no uncleared persons that will take possession of the Nigerian financial institutions, and also to ensure that even the valuation of a bank whose major balance sheets are assured by the Central Bank of Nigeria.”
The Governor said the exercise would positively impact the Gross Domestic Product of the nation, stressing, “It is going to contribute to the GDP growth that we are talking about supporting the present administration. Not to talk about better risk management tendencies, improved credit ratings for some of these banks, because of the forex credits they take, the credit ratings are very, very important.
He added that there would be dilution of shares and ownership for those who are even smaller investors.
Cardoso assured that in the event that some of the capital brought in by foreign direct investors could not be taken up, such investors would not suffer any loss, as their funds would be immediately available to them for repatriation.
