President Bola Tinubu has challenged Nigerian banks to rethink their approach to risk and play a more active role in driving economic growth and improving the welfare of Nigerians, insisting that strong profits alone are no longer enough.
The President spoke at the opening of the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja, yesterday.
Represented by the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, President Tinubu said banks must move beyond celebrating huge profits and shareholder dividends to financing productive sectors of the economy.
He said: “For years, we have measured financial institutions by balance-sheet growth, profitability and shareholder returns. These remain important. But we must increasingly ask: what is the financial system doing for the real economy?
“A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit, manufacturers struggle to finance expansion, and millions of productive MSMEs remain outside the formal financial system.
“This requires us to rethink risk. The safest loan on an individual bank’s balance sheet is not necessarily the best allocation of capital for the economy.”
The President said the economy had returned to a path of stability, with growing investor confidence, but stressed that macroeconomic stability alone would not guarantee prosperity.
“Economic stability has returned. Credibility is rising. And prosperity is coming.
“These improvements matter. But we must not mistake macroeconomic stability for economic prosperity. Stability is the foundation; prosperity is the destination.
“The current phase of our reform journey is about accelerating the conversion of stability into investment, investment into production, production into jobs, and growth into improved living standards.”
He said the next phase of Nigeria’s development should not merely produce bigger banks with larger balance sheets, but a larger and more productive economy.
“Capital must reach ideas, finance must enable enterprise, technology must expand opportunity, risks must be intelligently shared, and growth must translate into better lives for our people,” he said.
President Tinubu added that the banking and financial services industry would be central to achieving that objective and urged banks to fully embrace their financial intermediation role.
He said the ongoing bank recapitalisation exercise must deliver more than stronger balance sheets.
“It must translate into capital formation in the real economy, financing Nigerian businesses as they expand across Africa and pursue our ambition of a one-trillion-dollar economy.
“A bigger bank that does not finance a more productive economy is a suboptimal outcome. We must build a system that finances potential and opportunity rather than quick gains for the privileged,” he said.
Macroeconomic gains must improve living standards — CIBN
Earlier, the President and Chairman of Council of the CIBN, Dr. Dele Alabi, said improvements in Nigeria’s macroeconomic indicators would amount to little unless they translated into lower living costs and better living standards for citizens.
He said: “They are milestones, not the destination. 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.
“Macroeconomic progress must therefore be felt at the micro level—in households, small businesses and the daily lives of ordinary Nigerians. Our task is to build systems that learn, adapt and emerge stronger.”
Dr. Alabi said the conference was designed to give practical expression to the IMPACT Vision, which he unveiled on assuming office in May this year.
According to him, the next phase of economic reforms must focus on transmitting macroeconomic stability to businesses and households.
He said CIBN’s advocacy for scalable SME hubs across the country was a practical response to the challenges facing micro, small and medium enterprises, which remain constrained by high operating costs, poor infrastructure, limited market access, low productivity, skills gaps and slow digital adoption.
Nigeria’s credit bypassing job creators – W/Bank
Also speaking, the Lead Private Sector Development Specialist at the World Bank’s Nigeria Office, Ms. Bertine Kamphuis, representing the bank’s Division Director for Nigeria, Dr. Mathew Verghis, said Nigeria’s credit was bypassing job creators.
She urged banks to channel more financing to sectors with the highest job creation potential, particularly agriculture, manufacturing and micro, small and medium enterprises (MSMEs).
According to her, with between three and four million young Nigerians entering the labour market every year, expanding access to productive credit has become imperative.
In his goodwill message, the Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, said that the large capital raised by the banks during the recapitalisation exercise indicated the depth of capital available locally.
Represented by the Deputy Governor in charge of Policy, Mr. Philip Ikeazor, the CBN boss challenged operators in the industry to take advantage of the large capital now available to them to fund the real sectors of the economy, with a view to achieving the rapid growth that would impact on the better living standards of Nigerians.
He urged state governments to collaborate with the CBN and the fiscal authorities at the federal level in order to effectively tame inflation, pledging that with the cooperation of all stakeholders, single-digit inflation was achievable.
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