FG tasks banks to turn reforms into jobs, production

By Onu Okorie

President Bola Ahmed Tinubu has challenged Nigerian banks to move beyond balance-sheet expansion and play a more decisive role in converting the gains of economic reforms into increased production, investment and employment.
Tinubu, who spoke on Tuesday at the opening of the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja, said the banking sector was central to translating macroeconomic stability into improved living standards for Nigerians.
The President, represented by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, spoke on the theme, “Building a Resilient Economy in an Era of Disruptions: Strategic Imperatives for the Banking and Financial Services Industry.”
He said recent reforms had produced stronger economic indicators, including real GDP growth of 4.43 per cent in the second quarter of 2026, while Nigeria’s GDP in dollar terms grew by about 17 per cent in the first half of the year.
He also disclosed that the country’s external reserves had risen above $54 billion, describing the level as the highest in 18 years.
Tinubu, however, cautioned that macroeconomic stability should not be mistaken for prosperity, stressing that the next phase of reforms must focus on transmitting economic gains to businesses, workers and households.
“We must move from intermediation to transformation,”
he said, insisting that the performance of the financial system should increasingly be judged by its contribution to the real economy rather than balance-sheet growth, profitability and shareholder returns.
According to him, the foreign exchange market had also become more functional, recalling the difficulties businesses and individuals previously encountered in accessing foreign currency.
He noted that businesses had struggled to obtain forex for imported inputs and equipment, while some airlines were unable to repatriate earnings and Nigerians faced restrictions on international card transactions.
“Stability has returned. Credibility is rising. And prosperity is coming,” Tinubu said, adding that “stability is a foundation, prosperity is a destination.”
The President urged banks to increase lending to manufacturers, small businesses and entrepreneurs, saying affordable credit would be critical to accelerating investment, production and job creation.
He said the Federal Government was expanding guarantees, risk-sharing mechanisms, blended finance and credit enhancement, with the National Credit Guarantee Company expected to play a major role in mobilising private capital for productive activities.
“Let me move from how much government spends to how much productive capital it catalyses,” he said.
Tinubu identified growth facilitation, financial inclusion, technology, long-term capital and trust as five key imperatives for building a resilient financial system.
Recapitalisation must boost lending
The President said the recently concluded bank recapitalisation exercise must result in more than stronger balance sheets.
He said the additional capital should translate into greater financing for businesses seeking to expand, warning that bigger banks would have limited economic value if they failed to support productive activities.
“A bigger bank that does not finance a more productive economy is a suboptimal outcome,” he said.
Tinubu also challenged financial institutions to expand lending beyond customers with conventional collateral, urging banks to consider the viability and cash flows of businesses and entrepreneurs.
He said genuine financial inclusion should enable market women to access affordable working capital and allow young entrepreneurs to obtain credit without necessarily possessing conventional collateral.
On the digitalisation of financial services, the President warned that increased reliance on technology was creating new vulnerabilities, particularly cybersecurity threats, data breaches and fraud.
He described cybersecurity as part of the infrastructure for financial stability, saying resilience must now encompass protection against digital threats alongside capital adequacy and sound banking practices.
He also called for greater mobilisation of long-term funds through the capital market, pension, insurance and asset-management industries.
According to him, infrastructure, housing, energy and industrial development cannot be sustainably financed predominantly with short-term funds.
Tinubu said Nigeria must also become more competitive in attracting global capital by offering investors attractive risk-adjusted returns.
He explained that improved fiscal discipline would gradually reduce government borrowing pressure, create room for private-sector credit and support lower inflation and interest rates.
Cheaper capital, he said, would stimulate investment and production, leading to increased employment, household incomes and tax revenues, thereby reinforcing fiscal sustainability.
CIBN seeks SME financing hubs
The CIBN President and Chairman of Council, Dele Alabi, said the next phase of economic reforms must focus on transmitting macroeconomic gains to businesses and households.
Alabi disclosed that 33 banks had met the revised minimum capital requirements, with N4.65 trillion in new capital raised, describing the development as an additional buffer against domestic and external shocks.
He said the real test of the reforms would be whether stronger economic fundamentals resulted in lower living costs, more jobs, higher real incomes, affordable credit, improved public services and reduced poverty.
“The true test is whether stronger fundamentals translate into lower living costs, more jobs, higher real incomes, affordable credit, reliable public services and reduced poverty,” he said.
Alabi advocated the establishment of scalable SME hubs across the country to provide shared infrastructure, business advisory services, technology support, market linkages and access to finance.
He said the hubs would reduce operating costs, improve the bankability of small and medium-sized enterprises and create stronger links between recapitalised banks and the productive sector.