The CEO of United Bank for Africa (UBA) Plc, Oliver Alawuba, has appealed to the federal government to grant tax incentives and breaks to financial institutions investing in infrastructure and mining.
This call was made during the 36th Seminar of the Finance Correspondents Association of Nigeria (FICAN) in Abuja, where Alawuba emphasized the critical need for legislative support to drive economic transformation.
Speaking at the event, Alawuba urged the government to introduce tax incentives for recapitalization-linked investments, which he described as a “cornerstone for achieving Nigeria’s ambitious goal of becoming a one-trillion-dollar economy”.
He outlined the need for enabling legislation to facilitate long-term capital mobilization, strategic communication, capacity building, and robust engagement among stakeholders.
Recapitalization: A Landmark Policy for Economic Growth
Alawuba, who is also the Chairman, Body of Banks’ Chief Executive Officers, lauded the Central Bank of Nigeria’s move on banking recapitalization, describing it as a landmark policy designed to align the strength of the financial sector with Nigeria’s economic aspirations.
“It is a necessary and strategic step toward achieving the vision of a one-trillion-dollar economy,” he said. “As banks, we view this not only as a compliance requirement but as an opportunity to reimagine our role as economic enablers.”
He emphasized that Nigeria’s journey toward a trillion-dollar economy would depend on how effectively the financial sector mobilizes capital, strengthens critical infrastructure, supports the real sector, and accelerates digital transformation.
“Strong economies are built on the foundations of strong banks,” he added.
Challenges on the path to a trillion-dollar economy
While acknowledging the significance of the recapitalization policy, Alawuba highlighted several challenges that could impede Nigeria’s economic ambitions.
- These include regulatory and policy inconsistencies, security concerns, financial accessibility, and low levels of financial inclusion.
- He stressed the importance of sufficient capital buffers for banks to effectively finance both traditional sectors such as oil and gas, agriculture, and manufacturing, as well as emerging industries like Fintech, Green Energy, and Infrastructure.
“Recapitalization is beyond a regulatory action. It is a strategic policy designed to prepare the banking sector for the scale, complexity, and global competition that a trillion-dollar economy demands,” he explained.
A Call for visionary leadership
Alawuba encouraged Nigerian banks to take the lead in compliance, innovation, and economic stewardship.
He also urged regulators to provide guidance with wisdom and flexibility, ensuring that policies are designed to foster national development.
“Let us reimagine banking as a force for national development and commit ourselves to building an economy that works for every Nigerian,” he concluded, calling for a collaborative effort to transform Nigeria’s financial landscape into one capable of.
What you should know
To further enhance the resilience of Nigeria’s banking sector, the CBN introduced new minimum capital requirements for banks in 2024.
These revised thresholds significantly raise the bar for financial institutions, underscoring the CBN’s vision for a more stable and efficient banking environment.
- Commercial banks with international authorization must maintain a minimum capital base of N500 billion.
- Those with national authorization require N200 billion, while banks with regional authorization must hold N50 billion.
- Merchants with national authorization need N50 billion.
- Non-interest banks must meet varying requirements: N20 billion for national authorization and N10 billion for regional authorization.
To accommodate this transition, the CBN has provided banks with a 24-month compliance window, spanning from April 2024 to March 2026.
