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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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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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Hon. Marcus Adedini Joins 2027 Ife Federal Constituency Race, Promises People-Centered Leadership

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……Engr. Adedini Declares for 2027 Reps Race, Picks Nomination Forms

Engr. Marcus Adedini has officially declared his intention to contest the House of Representatives seat for Ife Federal Constituency in the 2027 general elections, following the purchase of his nomination and expression of interest forms.

His declaration marks his formal entry into the race and reflects what he described as a long-standing commitment to public service, grassroots development, and policy-driven leadership across Ife land.

A development advocate and grassroots mobiliser, Adedini brings years of community engagement and policy experience to his ambition. Through his initiative, he has spearheaded several community-based interventions spanning education, healthcare, youth empowerment, and social welfare.

In the education sector, his programmes have supported students with scholarships, learning materials, and infrastructure development. In healthcare, he has facilitated medical outreach initiatives aimed at improving access to services and raising community health awareness.

Adedini has also implemented youth empowerment schemes, equipping young people with vocational skills, startup support, and capacity-building opportunities to promote entrepreneurship and reduce unemployment. His efforts extend to women and vulnerable groups through targeted empowerment programmes designed to improve livelihoods.

Beyond grassroots initiatives, Adedini has gained legislative exposure, contributing to the drafting of bills and motions in key sectors, including education, healthcare, and social development. Supporters say his experience in budgeting and project facilitation positions him to attract federal projects to the constituency.

Calling for support, Adedini urged residents of Ife Federal Constituency to rally behind what he described as a shared vision of inclusive growth and sustainable development.

He pledged to run a people-focused and issue-based campaign, promising effective representation and impactful service if elected.

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FEC Backs $2.99bn Rail Projects, Sets Stage for Power Sector Shake-Up

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… Lagos Green Line, Kano, Kaduna rail schemes to boost connectivity

… Tinubu to chair power sector task force as reforms gather pace

The Federal Executive Council (FEC) on Thursday approved a $2.99 billion package of rail infrastructure projects and the establishment of a Presidential Task Force on Power Sector Reform, in a move signalling a renewed push by the administration of President Bola Ahmed Tinubu to deepen infrastructure development and unlock economic growth.

Briefing State House correspondents after the Council meeting, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the rail projects span key urban corridors and are designed to enhance mobility, reduce congestion, and stimulate regional commerce.

He listed the projects as the Lagos Green Line Rail, the Kano State Metro Rail, and the Kaduna State Rail project, noting that they have already been captured in the extended 2025 budget.

“The Federal Executive Council approved three transformative rail projects – Lagos Green Line, Kano State Metro Rail, and Kaduna State Rail project. These projects are to be sponsored by the Ministry of Finance Incorporated,” Oyedele said.

He explained that the approvals align with the administration’s broader infrastructure strategy, which prioritises rail transport as a cost-effective and sustainable alternative to road networks.

The Lagos Green Line is expected to complement existing mass transit systems in the commercial hub, while the Kano and Kaduna rail schemes are projected to boost passenger and freight movement across northern Nigeria, improving trade and economic activity.

In a related development, the Minister of Information and National Orientation, Mohammed Idris, announced the creation of a Presidential Task Force on Power Sector Reform, alongside key appointments aimed at strengthening governance in the electricity industry.

Idris said the Council approved the appointment of former Minister of Power, Lanre Babalola, as Special Adviser on Power to the President, to enhance coordination and policy oversight.

He disclosed that the President would chair the task force, with Babalola playing a central role in driving its activities.

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“The task force is part of renewed efforts by the administration to reposition the power sector as a critical driver of industrialisation and economic growth,” Idris said.

According to him, the decision followed the submission of a report by a presidential committee set up on March 4 to review the commercial and institutional framework for the proposed Grid Asset Management Company (GAMCO).

He noted that the task force brings together key stakeholders, including the Ministers of Finance, Power, Industry, Trade and Investment, Information, and the Attorney-General of the Federation, alongside regulators and representatives of electricity generation and distribution companies.

Idris said the body would focus on implementing far-reaching reforms to address structural bottlenecks in the sector, stressing that stable electricity supply remains central to Nigeria’s economic transformation.

He added that the government is committed to a comprehensive overhaul of the power sector to unlock industrial productivity and improve living standards.

The minister further disclosed that the FEC meeting was preceded by the swearing-in of a National Commissioner of the Independent National Electoral Commission (INEC) and four Permanent Secretaries.

He said President Tinubu administered the oath of office on retired Rear Admiral K. M. Marafa as INEC National Commissioner following her confirmation by the National Assembly.

Idris added that the Council deliberated on a 32-point agenda, reflecting what he described as the administration’s broad reform focus across critical sectors of the economy.

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