CBN's Recapitalization Program to Boost Lending in Nigeria

The Central Bank of Nigeria (CBN) has initiated a recapitalization program requiring banks to significantly raise their minimum capital thresholds by March 31, 2026. This exercise aims to mobilize ₦4.65 trillion in fresh capital across 33 institutions, with a target of ₦500 billion for international banks and ₦200 billion for national banks.

The recapitalization is expected to shift banks from a cautious lending strategy to a more aggressive approach, enabling them to support large-scale, long-term projects that have historically been underfunded. The program is part of a broader strategy to align monetary and fiscal policies, enhancing the financial system's capacity to support Nigeria's aspiration of building a $1 trillion economy.

The CBN's efforts are anticipated to improve banks' balance sheets, increase their risk-taking capacity, and ultimately trigger a new credit cycle, particularly benefiting sectors like infrastructure, energy, and manufacturing.