Business
I’ M OPTIMISTIC THAT THE NATION’S POWER SECTOR PROBLEMS CAN BE SOLVED- FASHOLA
The Minister of Power, Works and Housing, Mr Babatunde Fashola SAN on Monday chaired the third monthly meeting of key operators in the nation’s power industry declaring that he was optimistic that problems affecting the sector can be solved if everyone understands how his action or inaction affects the system.
In furthering his determination to identify, discuss and find practical solutions to issues facing the Nigerian Electricity Supply Industry, the Minister initiated the monthly meeting of operators in the electricity industry with two earlier editions taking place in Abuja and Lagos respectively.
The Minister, speaking during the opening session ,and with journalists after the meeting, which took place at the Ugwuaji Transmission Station in Enugu, the Minister reiterated his conviction that the problems affecting the sector were not insurmountable.
Asked pointedly by one of the journalists about his word to Nigerians in the light of certain recent developments in the sector, Fashola declared: “My word to Nigerians is that this problem can be solved. It is a problem that has challenged us for a long time. Not only am I going around to understand what the problems are, I am at Ugwuaji now in Enugu State, I am going around to understand what I am supposed to manage. I have been briefed on paper, in files and in memos and I am going from power plant to power plant, from transmission site to transmission site. What I have seen convinces me that this problem can be solved.”
“I am optimistic that it can be solved, it just needs for us as a people to understand the system better and how it works. I am going to dedicate some of my time to breaking down the technical issues that have sounded so complex over the decades, so that the average Nigerian can understand how the system works.”
According to the Minister, actions taken by some groups or individuals often have grave consequences for the collective. “So if people break down pipelines, you know that you have weakened the system. No matter how angry you are a broken pipeline is going to affect you, because you won’t have power. If people feel that the best way to secure employment for their colleagues in the union is to shut down a gas or power plant, the truth is that you are going to hurt more people than the people you intend to protect”, he said.
The Minister explained that the third edition of the monthly power sector operators meeting was as usual held to resolve pressing issues in the sector adding that each time the meeting was held the issues addressed had added value to the businesses of the participants and stakeholders in the power value chain.
According to the Minister, “We have subjected our meetings to some of the stress tests and the result was a unanimous Yes. So in terms of specifics, the meeting addressed problems of gas, it addressed problems of financial stability the problem of volatility of foreign exchange in the sector as to how that affects the ability of the GenCos and the DisCos to implement their foreign technical service agreements with their foreign partners as to how to remit money and pay as well as the difficulty of pricing of local gas consumption in dollars instead of in Naira.
Noting that these were some of the problems that people do not see but which ultimately affect the quality of service, the Minister said the metering issue was also discussed with a resolution that in the interest of customers, people could not take money from consumers without supplying the meters.
Saying that reports at the meeting showed that most of the distribution companies had largely supplied the meters, the Minister declared, “I have made it clear with the regulators that a situation where people paid for meters and those meters were not supplied for me undermines trust and trust is necessary in the system”.
In a communique issued at the end of the meeting, the stakeholders resolved to reinvigorate their effort towards customer engagement through the launch of Customer Care Units for adequate resolution of power sector issues in line with the standards set up by the Nigerian Electricity Regulatory Commission (NERC).
The Transmission Company of Nigeria (TCN) also gave a commitment to strengthen transmission capacity to more than 5000 MW by the end of the year while Port Harcourt DisCo, Ibom Power and Odukpani plants said they are developing an action plan to direct extra power from both plants to Calabar in order to maximize the generation capacity of the plants.
Also, in line with resolutions in previous meetings, the Nigerian Electricity Management Services Agency (NEMSA) reported that it has commenced the safety ranking of DisCos accordingly while DisCos renewed their commitment to aggressive metering and made commitments to ensure that customers under the Credited Advanced Payment for Metering Implementation (CAPMI) Scheme are metered as quickly as possible.
The Central Bank of Nigeria also gave commitment to resume disbursement of CBN Nigerian Electricity Market Stabilization Facility (NEMSF) upon finalizing the structure and payment model with NERC and other stakeholders ; while TCN made submission on the progress of ongoing work to improve transmission infrastructure across the country.
Earlier at the opening of the meeting, Fashola emphasized the importance of quality customer service in the Power Sector saying it was the only way to engender compliance with regards to bill payment among consumers of power nationwide.
The Minister said consumers needed to understand the intricacies of power generation, transmission and supply including why they could not get service at a particular point in time noting that their first line of comfort would be to know that somebody was aware that there was a problem in the first place.
“I would again reiterate that you, the owners of the assets, the DisCos and the GenCos, must step up and take responsibility for your business”, Fashola said adding that like the telecoms operators, the power agencies must drive their customer outlets, manage customer complaints, regularly adding other services related to power generation and distribution.
The Minister further urged, “You are the ones to do all the advertising, messaging and explanations about, what is going on? So you must perform that task very quickly”.
“You are not different from other brands in their services and therefore, branding, communication, education, information and service quality are what all of you must take responsibility for in your various units of operation”, he said.
According to the Minister, Government would continue to play the regulatory role in the business of power generation and distribution while it is the duty of the GenCos and DisCos to render services in such a way as to create harmony and cooperation between themselves and the consumers.
While noting that other companies involved in providing services to the public are not without problems, Fashola said that most of such problems were solved at various operational levels within the companies, while pointing out the fact that certain complaints within the power sector could be resolved by the various units without getting to the Ministry in Abuja.
“So when complaints come to us from Warri, Calabar, Maiduguri etc. that there is no power, I believe that the first responders must be your people”, he said.
The Minister said after being aware that someone within the sector was aware of the problem of the consumer, the next relevant line of comfort was how soon such a problem could be resolved adding that Nigerians have always demonstrated a reasonable disposition towards such problems.
Urging the DisCos and GenCos to go out and explain tariff to the public and why it is relevant, Fashola declared, “You can explain tariff because the issues that led to tariff were stated at consultations that you held. We cannot be accused of not consulting, you did the consulting in your various communities”.
On arrival in Enugu on Sunday evening, the Minister proceeded on an inspection tour of the Oji River Power Station, the nation’s only coal fired power station which was built in 1956 to produce 30MW for the then Eastern Region but which has been subsequently abandoned. The Minister and his entourage also inspected the access route to the Onyeama Coal Mining Point which had been blocked along the Udi- Enugu Road.
The operators at the Power Sector Partipants’ meeting were fully represented at the highest executive management levels, including Managing Directors and CEOs of Generating Companies (GenCos), Distribution Companies (DisCos), and the Transmission Company of Nigeria (TCN), as well as various government agencies such as the Niger Delta Power Holding Company (NDPHC) ,Nigerian Bulk Electricity Trader (NBET), Gas Aggregating Company of Nigeria (GACN), the Nigerian Electricity Liability Management Company (NELMCO), the Nigerian Electricity Regulatory Commission (NERC) and Nigerian Electricity Management Services Agency (NEMSA) .
Recapitalisation Without Transformation is a Risk Nigeria Cannot Afford
BY BLAISE UDUNZE
In barely two weeks, Nigeria’s banking sector will once again be at a historic turning point. As the deadline for the latest recapitalisation exercise approaches on March 31, 2026, with no fewer than 31 banks having met the new capital rule, leaving out two that are reportedly awaiting verification. As exercise progresses and draws to an end, policymakers are optimistic that stronger banks will anchor financial stability and support the country’s ambition of building a $1 trillion economy.
The reform, driven by the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso, requires banks to significantly raise their capital thresholds, which are set at N500 billion for international banks, N200 billion for national banks, and N50 billion for regional lenders. According to the apex bank, 33 banks have already tapped the capital market through rights issues and public offerings; collectively, the total verified and approved capital raised by the banks amounts to N4.05 trillion.
No doubt, at first glance, the strategy definitely appears straightforward with the idea that bigger capital means stronger banks, and stronger banks should finance economic growth. But history offers a cautionary reminder that capital alone does not guarantee resilience, as it would be recalled that Nigeria has travelled this road before.
During the 2004-2005 consolidation led by former CBN Governor Charles Soludo, the number of banks in the country shrank dramatically from 89 to 25. The reform created larger institutions that were celebrated as national champions. The truth is that Nigeria has been here before because, despite all said and done, barely five years later, the banking system plunged into crisis, forcing regulatory intervention, bailouts, and the creation of the Asset Management Corporation of Nigeria (AMCON) to absorb toxic assets.
The lesson from that experience is simple in the sense that recapitalisation without structural reform only postpones deeper problems.
Today, as banks race to meet the new capital thresholds, the real question is not how much capital has been raised but whether the reform will transform the fundamentals of Nigerian banking. The underlying fact is that if the exercise merely inflates balance sheets without addressing deeper vulnerabilities, Nigeria risks repeating a familiar cycle of apparent stability followed by systemic stress, as the resultant effect will be distressed banks less capable of bringing the economy out of the woods.
The real measure of success is far simpler. That is to say, stronger banks must stimulate economic productivity, stabilise the financial system, and expand access to credit for businesses and households. Anything less will amount to a missed opportunity.
One of the most critical issues surrounding the recapitalisation drive is the quality of the capital being raised.
Nigeria’s banking sector has reportedly secured more than N4.5 trillion in new capital commitments across different categories of banks. No doubt, on paper, these numbers may appear impressive. Going by the trends of events in Nigeria’s economy, numbers alone can be deceptive.
Past recapitalisation cycles revealed troubling practices, whereby funds raised through related-party transactions, borrowed money disguised as equity, or complex financial arrangements that recycled risks back into the banking system. If such practices resurface, recapitalisation becomes little more than an accounting exercise.
To avert a repeat of failure, the CBN must therefore ensure that every naira raised represents genuine, loss-absorbing capital. Transparency around capital sources, ownership structures, and funding arrangements must be non-negotiable. Without credible capital, balance sheet strength becomes an illusion that will make every recapitalization exercise futile.
In financial systems, credibility is itself a form of capital. If there is one recurring factor behind banking crises in Nigeria, it is corporate governance failure.
Many past collapses were not triggered by global shocks but by insider lending, weak board oversight, excessive executive power, and poor risk culture. Recapitalisation provides regulators with a rare opportunity to reset governance standards across the industry.
Boards must be independent not only in structure but also in substance. Risk committees must be empowered to challenge executive decisions. Insider lending rules must be enforced without compromise because, over the years, they have proven to be an anathema against the stability of the financial sector. The stakes are high.
When governance fails, fresh capital can quickly become fresh fuel for old excesses. Without governance reform, recapitalisation risks reinforcing the very weaknesses it seeks to eliminate.
Another structural vulnerability lies in Nigeria’s increasing amount of non-performing loans (NPLs), which recently caused the CBN to raise concerns, as Nigeria experiences a rise in bad loans threatening banking stability.
Industry data suggests that the banking sector’s NPL ratio has climbed above the prudential benchmark of 5 percent, reaching roughly 7 percent in recent assessments. Many of these troubled loans are concentrated in sectors such as oil and gas, power, and government-linked infrastructure projects, alongside other factors such as FX instability, high interest rates, and the withdrawal of Covid-era forbearance, which threaten bank stability.
While regulatory forbearance has helped maintain short-term stability, it has also obscured deeper asset-quality concerns. A credible recapitalisation process must confront this reality directly.
Loan classification standards must reflect economic truth rather than regulatory convenience. Banks should not carry impaired assets indefinitely while presenting healthy balance sheets to investors and depositors.
Transparency about asset quality strengthens trust. Concealment destroys it. Few forces have disrupted Nigerian bank balance sheets in recent years as severely as exchange-rate volatility.
Many banks still operate with significant foreign exchange mismatches, borrowing short-term in foreign currencies while lending long-term to clients earning revenues in naira. When the naira depreciates sharply, these mismatches can erode capital faster than any credit loss.
Recapitalisation must therefore be accompanied by stricter supervision of foreign exchange exposure, as this part calls for the regulator to heighten its supervision. Banks should be required to disclose currency risks more transparently and undergo rigorous stress testing at intervals that assume adverse currency scenarios rather than best-case outcomes. In a structurally import-dependent economy, ignoring FX risk is no longer an option.
Nigeria’s banking system has long been characterised by excessive concentration in a few sectors and corporate clients, which calls for adequate monitoring and the need to be addressed quickly for the recapitalization drive to yield maximum results.
Growth in most advanced economies comes from the small and medium-sized enterprises that are well-funded. Anything short of this undermines it, since the concentration of huge loans to large oil and gas companies, government-related entities, and major conglomerates absorbs a disproportionate share of bank lending. This has continued to pose a major threat to the system, as the case is with small and medium-sized enterprises, the backbone of job creation, which remain chronically underfinanced. This imbalance weakens the economy.
Recapitalisation should therefore be tied to policies that encourage credit diversification and risk-sharing mechanisms that allow banks to lend more confidently to productive sectors such as agriculture, manufacturing, and technology rather than investing their funds into the government’s securities. Bigger banks that remain narrowly exposed do not strengthen the economy. They amplify its fragilities.
Nigeria’s macroeconomic conditions, which are its broad economic settings, are defined by frequent and sometimes sharp changes or instability rather than stability.
Inflation shocks, interest-rate swings, fiscal pressures, and currency adjustments are not rare disruptions; but they have now become a normal part of the economic environment. Despite all these adverse factors, many banks still operate risk models that assume relative stability. Perhaps unbeknownst to the stakeholders, this disconnect is dangerous.
Owing to possible shocks, and when banks increase their capital (recapitalization), it is required that banks adopt more sophisticated risk-management frameworks capable of withstanding severe economic scenarios, with the expectation that stronger banks should also have stronger systems to manage risks and survive economic crises. In Nigeria today, every financial institution’s stress testing must be performed in the face of the economy facing severe shocks like currency depreciation, sovereign debt pressures, and sudden interest-rate spikes.
Risk management should evolve from a compliance obligation into a strategic discipline embedded in every lending decision.
Public confidence in the banking system depends heavily on credible financial reporting.
Investors, analysts, and depositors need to be able to understand banks’ true financial positions without navigating non-transparent disclosures or creative accounting practices, which means the industry must be liberated to an extent that gives room for access to information.
Recapitalisation provides an opportunity to strengthen the enforcement of international financial reporting standards, enhance audit quality, and require clearer disclosure of capital adequacy, asset quality, and related-party transactions. Transparency should not be feared. It is the foundation of trust.
One thing that must be corrected is that while recapitalisation often focuses on financial metrics, the banking sector ultimately runs on human capital.
Another fearful aspect of this exercise for the economy is that consolidation and mergers triggered by the reform could lead to workforce disruptions if not carefully managed. Job losses, casualisation, and declining staff morale can weaken institutional culture and productivity. Strong banks are built by strong people.
If recapitalisation strengthens balance sheets while destabilising the workforce that powers the system, the reform risks undermining its own economic objectives. Human capital stability must therefore form part of the broader reform strategy.
Doubtless, another emerging shift in Nigeria’s financial landscape is the rise of digital financial platforms that are increasingly changing how people access and use money in Nigeria.
Millions of Nigerians are increasingly relying on fintech platforms for payments, microloans, and everyday financial transactions. One of the advantages it offers, is that these services often deliver faster and more user-friendly experiences than traditional banks. While innovation is welcome, it raises important questions about the future structure of financial intermediation.
The point here is that the moment traditional banks retreat from retail banking while fintech platforms dominate customer interactions, systemic liquidity and regulatory oversight could become fragmented.
The CBN must see to it that the recapitalised banks must therefore invest aggressively in digital infrastructure, cybersecurity, and customer experience, while cutting down costs on all less critical areas in the industry.
Nigerians should feel the benefits of recapitalisation not only in stronger balance sheets but also in faster apps, reliable payment systems, and responsive customer service.
As banks grow larger through recapitalisation and consolidation, a new challenge emerges via systemic concentration.
Nigeria’s largest banks already control a significant share of industry assets. Further consolidation could deepen the divide between dominant institutions and smaller players. This creates the risk of “too-big-to-fail” banks whose collapse could threaten the entire financial system.
To address this risk, regulators must strengthen resolution frameworks that allow distressed banks to fail without triggering systemic panic, their collapse does not damage the whole financial system, and do not require taxpayer-funded bailouts to forestall similar mistakes that occurred with the liquidation of Heritage Bank. Market discipline depends on credible failure mechanisms.
It must be understood that Nigeria’s banking recapitalisation is not merely a financial exercise or, better still, increasing banks’ capital. It is a rare opportunity to rebuild trust, strengthen governance, and reposition the financial system as a true engine of economic development.
One fact is that if the reform focuses only on capital numbers, the country risks repeating a familiar pattern of churning out impressive balance sheets followed by another cycle of crisis.
But the actors in this exercise must ensure that the recapitalisation addresses governance failures, asset quality concerns, risk management weaknesses, and transparency gaps; and the moment this is done, the banking sector could emerge stronger and more resilient.
Nigeria does not simply need bigger banks. It needs better banks, institutions capable of financing innovation, supporting entrepreneurs, and building economic opportunity for millions of citizens.
The true capital of any banking system is not just money. It is trust. And whether this recapitalisation ultimately succeeds will depend on whether Nigerians see that trust reflected not only in financial statements but in the everyday experience of saving, borrowing, and investing in the economy. Only then will bigger banks translate into a stronger nation.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
FirstBank Makes Home Ownership Possible for Nigerians with Single-Digit Interest Rate Loan
For millions of Nigerians, homeownership has long felt like an ambition deferred. Squeezed by rising property prices, persistent double-digit inflation and high commercial lending rates, the dream of owning a home has remained just that – a dream.
But that narrative is quietly changing. Thanks to FirstBank.
The N1 Trillion Intervention Reshaping Access
In partnership with the Ministry of Finance Incorporated Real Estate Investment Fund (MREIF), FirstBank has unveiled a mortgage opportunity that could redefine access to housing finance in Nigeria.
Backed by the Federal Government’s N1trillion mortgage fund, the initiative is designed to empower Nigerians with affordable, long-term credit to own their homes.
9.75% Interest Rate in a 30% Lending Environment
MREIF is priced at 9.75% per annum, dramatically lower than prevailing commercial loan rates. Eligible Nigerians can access up to N100 million and repay within 20 years. This translates into significantly more manageable monthly repayments and greater long-term financial stability.
Built for Salary Earners, Entrepreneurs and the Diaspora
The MREIF mortgage facility has been structured to be inclusive. It is available to salary account holders, business owners and diaspora customers. Whether you are a young professional aiming to exit the rent cycle, an entrepreneur building generational stability, or you’re a Nigerian abroad looking to secure assets locally, the product opens a pathway that has historically been out of reach for many.
Taking the First Step
For those who have been waiting for the right time, this is definitely it. The question is no longer whether homeownership is possible. The real question is: will you act before the window narrows?
Visit https://www.firstbanknigeria.com/personal/loans/mreif-home-loan/ and in no time you could be the latest homeowner in town.
Alpha Morgan Bank Deepens Presence in Abuja with New Branch in Utako
Marking another milestone in its expansion drive, Alpha Morgan Bank has opened a new branch in Utako, Abuja, reinforcing its strategy of building closer institutional ties within key business communities and bringing its financial expertise closer to individuals, and enterprises driving the city’s growth.
The new branch, located at Plot 1121 Obafemi Awolowo Way, Utako, Abuja is strategically positioned to serve individuals, entrepreneurs, and corporate clients within Utako and surrounding districts.
The expansion follows the Bank’s recently concluded Economic Review Webinar held in February 2026, as the bank continues to position as a thought-leader in the financial services industry.
Speaking on the opening, Ade Buraimo, Managing Director of Alpha Morgan Bank, said the move underscores the Bank’s commitment to accessibility and service excellence.
“Proximity matters in banking. As communities grow and commercial activity expands, financial institutions also evolve to meet customers where they are. The Utako Branch allows us to deliver our services to people in that community efficiently while maintaining the high standards our customers expect,”
The Utako location will provide a full suite of retail and corporate banking services, including account opening, deposits, transfers, business banking solutions, and financial advisory support.
Customers and members of the public are invited to visit the new Utako Branch to experience the Bank’s approach to satisfying banking.
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