Tinubu, CIBN task banks on financing real economy, improving living standards

Share Advertisement President Bola Tinubu and the Chartered Institute of Bankers of Nigeria (CIBN) have urged banks to deepen financing of the real sector and ensure that Nigeria’s improving macroeconomic conditions translate into lower living costs, more jobs and better living standards.   The call was made at the opening of the 19th Annual Banking and Finance Conference of the CIBN in Abuja, where stakeholders said the success of Nigeria’s economic reforms should ultimately be measured by their impact on households and businesses.   Speaking at the conference, Taiwo Oyedele, Minister of Finance and Coordinating Minister of the Economy, representing Tinubu said Nigerian banks must rethink their approach to risk and play a more active role in financing productive sectors rather than focusing predominantly on profits and shareholder returns.   Tinubu said strong bank profits alone were no longer sufficient, stressing that the financial system must demonstrate its contribution to the broader economy.   “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?” he said.   The President said a resilient banking system could not be sustained where businesses were unable to access affordable credit, manufacturers struggled to finance expansion and productive MSMEs remained outside the formal financial system.   He said Nigeria had returned to a path of economic stability, with investor confidence improving, but cautioned that stability should not be equated with 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,” Tinubu said.   He explained that the next phase of the reform programme would focus on converting stability into investment, investment into production, production into jobs and economic growth into improved living standards.   Tinubu further urged banks to fully embrace their financial intermediation role, saying the country needed a larger and more productive economy rather than simply bigger banks with larger balance sheets.   He said the ongoing banking sector recapitalisation exercise must deliver more than stronger bank balance sheets by ensuring that increased capital is channelled into the real economy.   “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,” he said.   Dele Alabi, President and Chairman of Council of the CIBN, said recent improvements in Nigeria’s macroeconomic indicators were important milestones but should not be mistaken for the final objective of economic reforms.   “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,” Alabi said.   He said macroeconomic progress must be felt at the micro level, particularly by households, small businesses and ordinary Nigerians, adding that the next phase of reforms should focus on transmitting the gains from economic stability to businesses and households.   Alabi also highlighted the institute’s advocacy for scalable small and medium enterprise hubs across the country, describing the initiative as a practical response to the challenges confronting micro, small and medium enterprises (MSMEs).   According to him, MSMEs continue to contend with high operating costs, inadequate infrastructure, limited market access, low productivity, skills gaps and slow adoption of digital technologies.   Also speaking, Bertine Kamphuis, Lead Private Sector Development Specialist at the World Bank’s Nigeria Office, represented by Matthew Verghis, Division Director for Nigeria, said credit to the private sector remained inadequate.   She called on banks to increase financing to sectors with strong job-creation potential, particularly agriculture, manufacturing and MSMEs.   Kamphuis noted that between three and four million young Nigerians enter the labour market annually, making greater access to productive credit critical to expanding economic opportunities and employment.   In his goodwill message, Olayemi Cardoso, Governor, Central Bank of Nigeria represented by Philip Ikeazor, Deputy Governor, Economic Policy Directorate, said the substantial capital raised by banks through the recapitalisation exercise demonstrated the depth of capital available within the domestic market.   He challenged banks to deploy the additional capital to fund the real sectors of the economy and support faster growth that would improve the living standards of Nigerians.   Cardoso also urged state governments to collaborate with the CBN and federal fiscal authorities in tackling inflation, expressing confidence that single-digit inflation remained achievable with effective cooperation among stakeholders.   Related News Sade, What Exactly Are You Up To? – A review of Ope Adebanjo’s The League of Style Netflix Reviews: Animal Reclaimed: Part 1 Advertisement Share You Might Also Like Aig-Imoukhuede Foundation rallies reform leaders to tackle implementation gaps NLNG dividend delay hurting states – Makinde Goethe-Institut to reopen renovated Lagos center, strengthening German-Nigeria collaboration Advertisement