Business
Wabote Strengthens Commitment To Rewarding Local Contents In The Upstream Sector As Lamikanra Fuels Legal Fire Works
Wabote Strengthens Commitment To Rewarding Local Contents In The Upstream Sector As Lamikanra Fuels Legal Fire Works
The expected revenue generation of, at least, $10 billion every year when all the oil and gas industrial parks being built by the Nigerian Content Development and Monitoring Board, NCDMB, fully take off in different oil producing states in the Niger Delta, appears to be the most assuring signal from the South South geo political zone that commencement of sustainable developments is no longer a function of speculative endeavour.
In a recent disclosure by NCDMB Director of Corporate Communications, Engineer Ginah O. Ginah, the monies are expected to be generated from world standard parks that are at different stages of construction across the Niger Delta region which is part of the Engineer Simbi Kesiye Wabote’s led NCDMB efforts to significantly increase local contents in the oil and gas industry and generally drive Nigeria’s industrialisation.
Already, the first of such parks built at Odukpani in Cross River State is ready to commence business as many manufacturers and industrialists have indicated their interests to take advantage of the scheme.
But legal attempts to create a clog on these implementable initiatives were recently addressed by a Federal High Court sitting in Yenagoa, Bayelsa State, which, on Tuesday, May 9, 2023 delivered a landmark judgment confirming the authority of the Nigerian Content Development and Monitoring Board (NCDMB) to collect the one percent Nigerian Content Development Fund (NCDF) levy from every contract awarded in the Nigerian oil and gas upstream transaction as mandated under section 104 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.
The upstream section is the exploration, drilling and production end of oil industry as opposed to the downstream sector – which is the product refining and marketing sector.
Earlier, a group of Nigerian Drilling Companies known as Incorporated Trustees of the International Association of Drilling Contractors, IADC, had instituted a case against the NCDMB, seeking to stop the collection of one percent NCDF levy.
In the lawsuit – Suit No.FHC/YNG/CS/178/2022, IADC challenged the powers of NCDMB to demand the one percent NCDF levy from their members and contractors.
They averred that the demand is contrary to the clear provisions of section 104(2) of the NOGICD Act which states that “the sum of one percent of every contract awarded to any operator, contractor, subcontractor, alliance partner or any other entity involved in any project, operation, activity, or transaction in the upstream sector of the Nigeria oil and gas industry shall be deducted at source and paid into the Fund.”
The group also obtained an ex parte injunction against the Board prohibiting the demand, collection or anything whatsoever either by itself or through its agents, representatives, or privies in relation to NCDF payment or remittance from their members and contractors pending the final determination of the lawsuit.
But an experienced and highly respected Counsel in Oil & Gas legal space, Oladejo Lamikanra, SAN, who represented NCDMB, argued that section 104 of the NOGICD Act is charging section and a revenue clause of the Act and so must be construed liberally in favour of the operator.
Oladejo Lamikanra, SAN, asked the court to set aside the interim orders granted the Drillers and dismiss the case.
Oladejo Lamikanra argued further that there is no double taxation but rather reading the NOGICD Act as a whole, NCDMB has acted properly and fairly within its statutory powers.
The Drillers association, represented by Adedapo Tunde-Olowu, SAN, of the prestigious Lagos based Lawfirm AELEX, argued that the association should be exempted from the 1% levy and that NCDMB has no power to impose the statutory levy.
Tunde-Olowu, SAN pressed further that once an operator in the upstream sector has paid the 1% levy, their subcontractors to (whom they issue ancillary or subsidiary contracts) should not be subject to another 1% levy. He emphasized that it amounts to “ double taxation” and so have refused to pay the levy.
In further submission, the NCDMB’s representative said the case of the Drillers amount to biting the same fingers that has fed them and allowed them to flourish and prosper.
The legal expert noted that section 104 is the revenue base and life-blood of the Nigerian Content Board, stressing that if the Drillers ( an association of over 60 members in the oil & gas industry) succeeds, it would mark the demise of the Nigerian Content Board and with it, the accrued benefits of progressive development and promotion of Nigerian participation and local content in the oil & gas industry would be destroyed.
On Tuesday May 9, 2023, the Court upheld all the submissions of the NCDMB based on the arguments of Dejo Lamikanra, SAN of the Port Harcourt & Abuja based prestigious law firm-Creeks & Shield, Solicitors.
The court said that even if the preliminary objection against the case has not succeeded, it would still have dismissed the Drillers case on the merits because the burden of proving their case was on them ( the Drillers) and that on balance, the plaintiff failed to supply any credible evidence to support their claims in the originating summons.
The presiding judge Honourable Justice Isa H Dashen disagreed with the Drillers case. The court set aside the interim orders it granted against NCDMB in July 2022.
Further the Court dismissed the case of the Drillers as totally lacking in merit and incompetent. It held that NCDMB has the statutory power to impose 1% levy on all operators in the upstream sector of the oil and gas industry and that the levy on subcontractors of Drillers does not amount to double-taxation as claimed by Plaintiff Drillers.
While the case was on, the Committee on Oil & Gas of the National Assembly attempted to wade into the dispute but the interim ex parte order of court granted the Drillers in August 2021 frustrated the two hearing dates scheduled by the NASS.
For context, since 2010 when the NOGICD Act was enacted by the Goodluck Jonathan’s administration, local content and participation of indigenous oil & gas operator has increased from less than 10% to over 35% and growing.
Meanwhile, reports have it that the legal battle may be far from over as the theatre of “ war” has only shifted from Federal High Court to Court of Appeal where Tunde-Olowu, SAN and Oladejo Lamikanra SAN would further slug it out.
Available information indicates that one of the judicious applications of the Fund by NCDMB is the credit scheme extended to Nigerian oil and gas businesses through the Nigerian Content Intervention Fund (NCI Fund), managed by the Bank of Industry (BoI) and the Nigerian Export-Import Bank (NEXIM-Bank).
Other notable utilizations of the NCDF are the development of Nigerian Oil and Gas Parks Scheme (NOGAPS), equity participation in notable third-party ventures, Human capacity development initiatives, and the institution of the Nigerian Content Research & Development Fund as well as other R&D initiatives.
Other applications are the construction of the 17-storey Nigerian Content Tower, entrepreneurship schemes and competitions, and the ongoing construction of the Conference Hotel Project (CHP).
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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