IMF Endorses CBN Recapitalisation as Nigeria’s Banking Buffers Strengthen Financial Stability
The International Monetary Fund (IMF) has backed Nigeria’s recent bank recapitalisation exercise, praising the Central Bank of Nigeria (CBN) for strengthening the financial system at a time of global uncertainty. According to the IMF, the policy has already improved the resilience of banks and positioned the country’s economy to better withstand external shocks, especially volatility in oil prices and global markets.
Speaking during the 2026 Spring Meetings of the World Bank and IMF in Washington, DC, the Fund said Nigeria’s recapitalisation programme is a “timely and appropriate” reform. It noted that stronger capital buffers will allow banks to better support monetary policy goals such as inflation control, while also sustaining medium-term economic growth. IMF officials added that well-capitalised banks are essential for stability in emerging economies facing unpredictable global capital flows.
The IMF also projected a positive outlook for Nigeria’s economy, estimating growth at 4.1 per cent in 2026 and 4.3 per cent in 2027. It linked this outlook to ongoing reforms, rising external reserves, and improvements in financial stability. However, it cautioned that inflation risks remain, especially due to global oil price fluctuations and geopolitical tensions affecting energy markets.
Central Bank Governor Olayemi Cardoso said the recapitalisation exercise marks a major milestone for Nigeria’s financial sector, with 33 banks raising a combined N4.65 trillion. He stressed that the stronger capital base would help banks support Nigeria’s ambition of building a $1 trillion economy by expanding credit to key sectors such as infrastructure, manufacturing, energy, and technology. Cardoso also noted that stress tests confirmed the banking system remains fundamentally strong.
Stakeholders, including banking and financial sector leaders, have welcomed the reforms but urged banks to ensure the benefits reach the real economy. They called for cheaper credit, longer-term lending, and stronger support for agriculture and small businesses. The IMF, meanwhile, advised continued discipline in fiscal and monetary policy, warning that countries must remain flexible while protecting vulnerable populations without fueling inflation.
source: punch