The Central Bank of Nigeria, CBN said that it expects a massive inflow of Foreign Direct Investment, FDIs, with foreign investors taking positions in Nigerian banks through the ongoing recapitalisation exercise.
The Director of Financial Policy and Regulation Department, FRPD, CBN, Haruna Mustafa said this in an interview stressing that the banking recapitalisation exercise holds enormous opportunities for the economy, especially in terms of enhancing forex market reforms.
He said: “This policy holds enormous promise and opportunities not only for the banking system but for the wider economy. We expect to see a massive inflow of foreign direct investment, and these are patient funds that any economy will need for long-term sustainable growth.
“Because one fundamental challenge for our development story is the absence of long-term patient capital. This is going to lead to an inflow of foreign direct Investments, FDI. We expect we’re looking to see investors coming in to take a position in our banking system.
Addressing concerns over the exclusion of retained earnings from the composition of banks’ minimum paid-up capital, Mustafa said the decision is to nudge banks to inject fresh capital, adding that this is in line with the two broad objectives of the recapitalisation exercise.
