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Bank Recapitalisation : “We must address banks capital adequacy to grow economy” Says Bayo Onanuga

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….Investors inject N110bn in UBA, FBNH, Zenith, Access, other stocks in two days

Presidency on Tuesday expressed support for the banking sector consolidation initiative of the Central Bank of Nigeria, saying it would help the country to grow the economy to a new height.

This came barely five days after the CBN said it would ask banks to raise new capital.

According to the Presidency, it has become important to consider the capital adequacy of Nigerian banks in light of the projected $1tn economy in eight years.

Representing President Bola Tinubu at the 40th Anniversary Celebration of The Guardian Newspapers in Lagos on Tuesday, the President’s Special Adviser on Information and Strategy, Bayo Onanuga, said there would be a strong need to revisit the capital adequacy levels of banks

Onanuga said, “On the economy, that is facing all of us, our ambition to attain the $1tn appears daunting but we believe that it is achievable with God on our side and our collective determine. This explains the reason the VP and I have been on the road trying to attract huge investments into various phases of our economy; agriculture, oil and gas and others.

“To arrive at the $1tn economy, we must address the capital adequacy of our banks that will prepare the fuel for this journey.”

At the 58th annual Bankers’ Dinner last Friday, CBN Governor, Olayemi Cardoso, had said a stress test performed on Nigerian banks revealed that while they would withstand mild to moderate stress, they would be unable to service a $1tn economy projected by Tinubu in seven years, hence the need for recapitalisation.

Cardoso said, “Stress tests conducted on the banking industry also indicate its strength under mild-to-moderate scenarios of sustained economic and financial stress, although there is room for further strengthening and enhancing resilience to shocks. Therefore, there is still much work to be done in fortifying the industry for future challenges.”

He added, “Considering the policy imperatives and the projected economic growth, it is crucial for us to evaluate the adequacy of our banking industry to serve the envisioned larger economy. It is crucial to evaluate the adequacy of our banking industry to serve the envisioned larger economy. It is not just about its current stability. We need to ask ourselves, can Nigerian banks have sufficient capital relative to the finance system needs in servicing a $1tn economy shortly, in my opinion, the answer is no, unless we take action. As a first test, the central bank will be directing banks to increase their capital.”

Meanwhile,findings show investors have begun positioning themselves in the stocks of Tier-1 banks listed on the Nigerian Exchange Limited following the announcement of the proposed recapitalisation of the banks.

There are reports some big banks may be eyeing smaller and weaker ones in the event the proposed consolidation in the sector fuels possible acquisitions.

Meanwhile, findings showed that some listed financial institutions gained over N101.18bn on Monday and Tuesday, following the announcement of the proposed banking sector recapitalisation.

An analysis done by one of our correspondent at the close of trading on Tuesday revealed that at least six of the lenders added to their market capitalisation in the two trading sessions this week, while five banks shed their value and two remained unchanged.

The lenders who gained included United Bank for Africa Plc, whose market capitalisation rose to N731.87bn on Tuesday from N713.06bn on Friday, the market cap of Zenith Bank Plc appreciated by one per cent to N1.10tn and Access Holdings Plc’s market cap rose by four per cent to close Tuesday’s trading at N639.81bn.

FBN Holdings Plc has been the biggest gainer so far as its market cap stood at N800.47bn on Tuesday from N717.91bn on Friday, marking an 11 per cent appreciation. The market cap of Sterling Financial Holdings Plc rose by 4.51 per cent to N106.81bn and the value of FCMB Group’s share rose by one per cent to N137.63bn.

The five lenders who lost during the period under review include; Guaranty Trust Holding Company (-1 per cent), Jaiz Bank (-2 per cent), Unity Bank (-8.69 per cent), Wema Bank and Stanbic IBTC Holdings (-3.08 per cent) to close with their market capitalisation at N1.13tn, N55.27bn, N19.64bn, N66.61bn and N816.29bn respectively.

The market capitalisation of two lenders, Ecobank Transnational Incorporated Plc and Fidelity Bank remained unchanged over the two-day period at N293.59bn and N288.11bn respectively.

A bank CEO, who earlier spoke to The PUNCH, welcomed the CBN policy direction regarding the recapitalisation of the banks, saying his institution was ready to raise fresh capital though it had yet to conclude the modality.

“Even before the CBN governor made the pronouncement, our bank was already considering raising fresh capital to significantly increase the capital base. This should happen in the first quarter of 2024. So, we are in tune with the CBN governor,” the CEO of a Tier-1 lender told one of our correspondents on Saturday.

In the last few months, First Bank of Nigeria Holdings, Wema Bank and Jaiz Bank have proposed Rights Issues, while Fidelity Bank has announced plans to raise additional capital via the issuance of 13,200 billion ordinary shares via public offer and rights issue. It was gathered that Wema Bank would commence its Rights Issue on December 1.

Already, players in the capital market have expressed varied views as to the capability of the market to support the proposed recapitalisation drive.

While the doyen of the Nigerian Exchange Limited, Rasheed Yusuf, in his comments, believed the local bourse could support such a major capital raise, even without the presence of foreign investors, the Managing Director of Afrinvest Securities Limited, Ayodeji Ebo, expressed doubts the capital market could support the recapitalisation.

He said, “The Nigerian capital market may not be able to fully support the recapitalisation of the banks given the market is currently been driven by domestic investors. To also achieve this, the banks must adopt technology to drive the capital raise process as we saw during the MTN public offer.

Ebo added, “We believe if the foreign exchange policy is clear and consistent in the medium term, we expect to begin to attract FPIs to the capital market.”

Meanwhile, some minority shareholders community have expressed the conditions under which they will support the financial institutions. Mr Boniface Okezie of the Progressive Shareholders Association of Nigeria, said that minority investors must do their due diligence and invest in stocks with track records.

“What we will be looking out for include those who have been paying dividends in the past, those with good capital appreciation and a good track record from their management team. How have they been communicating with shareholders when the situation was rosy or not? I have my fears and some of those banks can’t convince me, not when my money has been trapped. In the past, they have been reckless. Even those who acquired the shares of those banks did not pay compensation to shareholders and are using the assets of the bank as leverage to build up their branches. They are not paying dividends to shareholders but have created an empire. For such banks, shareholders must be on the lookout for them and this is the time to pay them back in their coins, “he said.

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Dangote Denies Fallout with Elumelu, Debunks Financial Support Claims

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The Dangote Group has dismissed as false and malicious claims of a rift between its President, Aliko Dangote, and the Chairman of Heirs Holdings, Tony Elumelu, and also rejected allegations that he (Dangote) solicited support for financing his refinery project.

In a statement issued on Sunday, the group described as “entirely baseless” a publication stating that Dangote had revealed why he distanced himself from Elumelu, stressing that neither the businessman nor the organisation made such remarks.

The statement, signed by the Group Chief Branding and Communications Officer, Anthony Chiejina, said the report misrepresented both personal and corporate positions and added that there was no disagreement between the two prominent business leaders.

“The Dangote Group has become aware of a publication titled ‘Aliko Dangote Speaks Out on Why He Distanced Himself from Tony Elumelu’, which is false, malicious, and baseless. At no time did the President or the Group make such statements or express such sentiments,” the statement read in part.

The company further dismissed claims that the multi-billion-dollar Dangote Petroleum Refinery & Petrochemicals was financed through personal borrowing from friends, describing such assertions as inaccurate and a deliberate misrepresentation of facts.

According to the group, Dangote does not fund projects through informal personal loans, noting that any such claims should be backed by verifiable evidence.

“As a matter of principle, Aliko Dangote neither finances his projects through personal borrowing from friends nor engages in lending arrangements of that nature. Any individual making such claims should provide verifiable evidence to substantiate them,” the statement added.

The group also clarified that there was no strain in the relationship between Dangote and Elumelu, maintaining that both men continue to enjoy a longstanding and cordial relationship despite the claims circulating in the report.

The clarification follows the circulation of a widely shared online post which alleged that Dangote fell out with Elumelu after a failed financial assistance request during the construction of the refinery.

In the post, attributed to Dangote but now disowned by the company, the author claimed that in 2021, when the refinery project was about half-completed, he ran out of funds and approached several business associates for support, including Femi Otedola, Abdulsamad Rabiu, Mike Adenuga, and Elumelu.

The post further alleged that Elumelu promised $20m but later became unreachable, while other associates reportedly raised $500m to support the project, with Otedola said to have contributed $300m.

However, the Dangote Group said such claims were fabricated and should not be attributed to its president, reiterating that the financing narrative presented in the post was false.

Beyond the disputed publication, the company raised concerns over what it described as a growing trend of fabricated statements and the unauthorised use of Dangote’s identity in digitally manipulated content.

It warned that the misuse of his name, likeness, and image in artificial intelligence-generated advertisements and other misleading materials poses reputational risks and could amount to fraud.

“Furthermore, the group notes with concern a rising pattern of fabricated statements and the unauthorised use of Aliko Dangote’s name, likeness, and image in AI-generated advertisements and other misleading content. These actions amount to reputational harm and potential fraud,” the statement said.

The company cautioned individuals, organisations, and platforms involved in creating or disseminating false information to desist immediately, warning that it would not hesitate to pursue legal action where necessary to protect its reputation and that of its leadership.

The Dangote Group reaffirmed its commitment to maintaining high standards of integrity while continuing its industrial and economic contributions across Africa, particularly in advancing self-sufficiency and sustainable development.

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Rising Attacks on Abuja–Kaduna Trains Spark Alarm as NRC Seeks Urgent Community Support

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The Nigerian Railway Corporation (NRC) has raised serious concerns over a growing wave of attacks targeting train operations along the Abuja–Kaduna rail corridor, describing the incidents as dangerous and economically damaging.

In the latest attack, suspected vandals reportedly targeted a moving train around Kilometer 177 on the route, pelting stones at the locomotive and damaging its windscreen. The incident is one of several recorded in recent weeks, highlighting an alarming pattern of hostility along the critical transport corridor.

According to the Corporation, similar acts have occurred in multiple locations, including Gidan Busa and Sarki Gora Village in Kakau District, within Chikun Local Government Area of Kaduna State. In total, more than six attack points have been identified within a two-week span, intensifying operational challenges for railway authorities.

The NRC warned that these repeated attacks pose a direct threat to passengers, railway personnel, and infrastructure. It described the acts as economic sabotage capable of undermining the Federal Government’s heavy investment in rail transport and disrupting a key component of national mobility.

Despite the risks, the Corporation confirmed that train services along the corridor have continued, with heightened safety measures and increased vigilance by railway staff to ensure passenger safety. Management commended security agencies for their ongoing collaboration in protecting railway assets and maintaining order along the routes.

Efforts are currently underway in partnership with security operatives, community leaders, and other stakeholders to strengthen surveillance, identify those responsible, and bring them to justice.

The NRC has also appealed to residents living along railway corridors to play an active role in safeguarding the infrastructure. It urged communities to report suspicious movements and discourage acts of vandalism, warning that continued attacks could disrupt smooth service delivery if not urgently addressed.

Reaffirming its commitment, the Corporation assured Nigerians that it remains focused on providing safe, secure, and efficient rail services nationwide, while intensifying efforts to protect both passengers and critical railway infrastructure.

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Tinubu’s $2.99bn Rail Push Sparks Calls for Nationwide Network Expansion

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By Sotayo Olayinka

The Federal Executive Council (FEC) on Thursday approved a $2.99 billion package of rail infrastructure projects, signalling a renewed commitment by the administration of Bola Ahmed Tinubu to deepen infrastructure development and unlock economic growth.

While this initiative is widely commendable, there is a growing call for the Federal Government to extend similar support to the Nigerian Railway Corporation (NRC). Strengthening the corporation would significantly improve inter-state transportation, ease the pressure on road networks caused by overloaded trucks, and enhance logistics efficiency nationwide.

Nigeria has already recorded progress with the Lagos–Ibadan rail corridor. However, greater impact can be achieved if the government connects Lagos to Abuja, complementing the existing Kaduna–Katsina line. Such integration would go a long way in addressing the country’s persistent transportation challenges. There is also increasing public demand for the expansion of rail services to the northern and eastern regions, which would create a more unified and dependable national transport system.

Many Nigerians still recall the 1960s, when train services operated seamlessly from Lagos to Kaduna and even Sokoto—an era that underscored the immense potential of an efficient rail network.

Expanding the railway system aligns with the administration’s Renewed Hope Agenda and would deliver tangible results in infrastructure development. There is also a widely held view that the current leadership of the NRC, under Managing Director Kayode Opeifa, is making meaningful progress in revitalizing rail services.

Sustained government backing will be critical to consolidating these gains and building a modern, efficient, and nationally connected railway system capable of driving economic growth and easing transportation challenges across Nigeria.

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