The Central Bank of Nigeria (CBN) has underscored the importance of strong governance and disciplined risk management in ensuring the success of Nigeria’s ongoing bank recapitalisation programme. Dr. Blaise Ijebor, Director of Risk Management and Chief Risk Officer at the CBN, made the remarks during a virtual roundtable hosted by the Association of Enterprise Risk Management Professionals in Lagos. The event focused on recapitalisation, mergers, and acquisitions in the financial system, with discussions on how to minimize risks and maximize opportunities.
Ijebor, represented by Director Olabanji Samuel, described the recapitalisation initiative as a macro-financial stability measure aimed at strengthening the resilience of Nigerian banks and positioning them for sustainable growth. He noted that past reforms, including the 2004–2005 consolidation and the aftermath of the 2009 financial crisis, revealed that capital alone does not guarantee stability. “Capital builds strength, but governance sustains it,” he said, stressing that weak governance and poor credit risk practices had previously undermined even well-capitalised institutions.
The current recapitalisation exercise, according to Ijebor, is forward-looking and aligned with international standards. It incorporates stress testing, capital adequacy frameworks, and recovery planning to ensure banks can withstand shocks without requiring government intervention. He emphasized that risk and compliance professionals now carry greater responsibility, urging them to provide forward-looking assessments of how recapitalisation and potential mergers could reshape institutional risk profiles. Compliance officers, he added, must anticipate regulatory implications and strengthen oversight.
Ijebor identified several risk areas that demand close attention: balance sheet vulnerabilities, operational and integration risks, systemic exposures, and governance challenges. He highlighted the need for rigorous stress testing, accurate asset valuation, strong board oversight, and effective management of anti-money laundering and counter-terrorism financing frameworks. He also noted that recapitalisation offers banks an opportunity to enhance enterprise risk management systems, improve data quality, and integrate risk considerations into strategic planning.
He cautioned that increased capital should not encourage reckless risk-taking. Boards must recalibrate risk appetite frameworks and align capital allocation with long-term value creation. If managed properly, the recapitalisation process could unlock opportunities in infrastructure financing, capital market development, trade facilitation, innovation, and cybersecurity resilience. “Opportunities will not realise themselves; they depend on the choices we make today,” he said.
Ijebor further stressed the importance of accountability at the board and executive levels. Transparency, long-term incentives, and strong governance structures, he argued, are essential to ensuring the recapitalisation programme delivers lasting value. He described the exercise as a pivotal moment for Nigeria’s financial system, with the potential to build stronger institutions capable of driving economic growth. “The difference between success and failure will be shaped by governance, discipline, and strategic clarity,” he concluded.
Panelists at the roundtable echoed similar concerns. Prof. Olufemi Awoyemi, Founder and Chairman of Proshare Ltd, warned that Nigeria’s multi-sector recapitalisation efforts were straining market capacity and exposing coordination gaps among regulators. He said simultaneous capital raising across different sectors could create systemic risks if not properly managed. Ms. Bunmi Lawson, pioneer Managing Director of EDFIN Microfinance Bank Ltd, emphasized that larger institutions require stronger risk frameworks, enhanced regulatory capacity, and effective capital deployment strategies. Prof. Ehi Esoimeme of James Hope University highlighted the risks of financial crime, calling for stricter due diligence, improved data management, and stronger monitoring systems.
The panelists agreed that while recapitalisation presents significant growth opportunities, its success depends on effective governance and robust risk management. They stressed that without disciplined oversight, the exercise could expose the financial system to new vulnerabilities. However, with careful planning and strong institutional frameworks, recapitalisation could transform Nigeria’s banking sector into a more resilient driver of economic development.
