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Lagos, Lagos State – By Prime Brief Media

Following two years of aggressive recapitalisation that saw Nigerian banks raise record levels of fresh capital, pressure is mounting on the sector to deploy its combined N4.65 trillion capital base and accumulated profits into productive lending that can drive real economic growth.

The banks have posted impressive profits, buoyed by high interest rates and foreign exchange revaluation gains. However, critics say the funds have largely remained in government securities and other low-risk investments rather than flowing to the critical sectors of agriculture, manufacturing, and small and medium enterprises.

"The banks are sitting on a mountain of cash while the real economy is starved of credit. The recapitalisation exercise was supposed to strengthen the banks' capacity to lend, not to pad their treasury bill portfolios," said Dr. Tilewa Adebajo, an economist and CEO of CFG Advisory.

The Central Bank of Nigeria has urged banks to increase their loan-to-deposit ratios and has introduced incentives for lending to priority sectors. However, banks cite high credit risks, insecurity, and infrastructure deficits as factors that constrain aggressive lending.

The Nigeria Economic Summit Group has called for a coordinated strategy involving fiscal and monetary authorities to de-risk lending and unlock the capital for national development. The debate comes as Nigeria's inflation stands at 15.69 per cent and economic growth remains fragile.

Prime Brief Media will follow industry reactions and corporate disclosures as this story progresses.

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