Nigeria Economic Update, Issue 27

The Central Bank of Nigeria (CBN) reiterated the soundness of the country’s banking sector in June 2025 while announcing time-bound transitional measures for a few institutions still adjusting to the withdrawal of temporary regulatory support introduced during the COVID-19 period. These steps are part of the broader implementation of the 2023 recapitalisation programme, which aimed to strengthen the financial sector in line with Nigeria’s long-term economic development objectives. The report indicated that most banks have either met or are well on track to meet the new capital requirements ahead of the March 31, 2026, deadline. For the few banks still in transition, the CBN has placed temporary restrictions on capital distributions such as dividends and bonuses to encourage earnings retention and reinforce capital buffers. These adjustments align with global regulatory norms and are consistent with similar practices in developed economies. Nigeria’s capital framework continues to exceed global Basel III standards, reflecting the CBN’s conservative approach to financial oversight. To maintain momentum, the CBN should consider supporting affected banks with technical assistance to accelerate compliance without undermining confidence in the sector.

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