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•Says election, fiscal spending may fuel inflation •Reserves hit 13-year high at $50.4bn
By Chinwendu Obienyi and Adanna Nnamani, Abuja
Nigeria’s banking sector, as of February 19, has recorded N4.05 trillion in verified and approved capital raising as the recapitalisation programme enters its final stretch, with 20 banks already meeting the new minimum requirements and 13 others at advanced stages ahead of the regulatory deadline happening in about 40 days.
Governor, CBN, Olayemi Cardoso, while disclosing this at the 304th meeting of the Monetary Policy Committee (MPC) in Abuja, Tuesday, also flagged rising fiscal releases and potential pre-election spending as emerging risks to the country’s improving inflation outlook.
Responding to questions from journalists at the briefing, Cardoso said the successful capital raise reflects what he described as a compelling mix of policy signals and market fundamentals that have continued to sustain strong interest from both domestic and foreign investors in Nigerian banking assets.
“Of this (N4.05 trillion), N2.90 trillion, which is 71.6 per cent has been mobilised domestically, with about $706.84 million, which is N1.15 billion in our currency, representing 28.33 per cent has been mobilised internationally. So in summary, 71.67 per cent is domestic mobilisation and 28.33 per cent is foreign participation.
“This balance, in my view, represents a mix of domestic and foreign which signals broad investor engagement and confidence in the sector”, Cardoso remarked.
According to him, 20 banks have fully met the new minimum capital requirements, while 13 lenders are at advanced stages of their capital raising processes and are expected to conclude within the stipulated timeframe.
The Governor also addressed lenders currently under regulatory intervention, noting that their recapitalisation timelines may differ due to ongoing legal and structural considerations. “It would be unreasonable to expect such institutions to follow the same sequence as banks that have had the full two-and-a-half years since the recapitalisation announcement to plan and execute their capital-raising strategies”.
The CBN, he said, remains actively engaged with all relevant stakeholders to ensure an orderly, credible and stability-focused outcome.
He assured that depositor funds in the affected institutions remain secure and that their operations continue under close supervisory and regulatory oversight of the apex bank. The recapitalisation progress comes amid a significant build-up in external buffers.
Nigeria’s gross reserves, according to Cardoso, rose to $50.4 billion as of mid-February 2026, the highest level recorded in 13 years. Attributing the accretion to favourable trade developments, the Governor pointed towards a healthy current account surplus, rising non-oil exports and improved diaspora remittances, adding that consistent policy communication and international investor engagement have strengthened market confidence in the foreign exchange (FX) framework.
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While describing the reserves trajectory as encouraging, the apex bank cautioned that sustainability remains contingent on oil price dynamics, global economic conditions and disciplined fiscal management.
In a move signaling cautious optimism, the MPC voted to reduce the Monetary Policy Rate (MPR) by 50 basis points to 26.50 per cent from 27.00 per cent.
The Committee also retained other policy parameters, including the asymmetric corridor around the MPR at +50/-450 basis points, the Cash Reserve Ratio (CRR) at 45 per cent for Deposit Money Banks (DMBs) and 16 per cent for Merchant Banks, the 75 per cent CRR on non-Treasury Single Account (TSA) public sector deposits, and the liquidity ratio at 30 per cent.
Speaking on inflation, Cardoso noted that headline inflation eased to 15.10 perc ent year-on-year in January 2026 from 15.15 percent in December 2025 while food inflation declined sharply to 8.89 percent from 10.84 percent, supported by improved domestic food supply and exchange rate stability adding that core inflation moderated to 17.72 per cent from 18.63 per cent.
Despite the improving inflation profile, the CBN Governor warned that increased fiscal injections, particularly election-related spending, could reverse recent gains in price moderation if not properly managed. “The outlook indicates that the current momentum of domestic dis-inflation will continue in the near term. This is premised on the lagged impact of previous monetary policy tightening, sustained stability in the foreign exchange market and improved food supply, however, increased fiscal releases, including election related spending, could pose upside risk to the outlook”,Cardoso stated.
The Committee also cited oil price volatility and potential global shocks as downside risks to reserves and macroeconomic stability.
While welcoming policy measures aimed at boosting fiscal revenues, including the redirection of oil and gas receipts into the Federation Account, Cardoso stressed the importance of policy consistency and coordination to safeguard dis-inflation momentum.
“We have got to make sure that we are consistent with our policy formulation, and there are no policy somersaults. My view is that as long as all things are being equal, I believe that the trajectory we are on is one that is sustainable into the future.
“We know that there is every effort being made to diversify our base, and as all those things start to kick in, they can only add to the situation we are in”, he stated.
Reacting to the developments gathered at the meeting, experts who spoke during a CNBC Africa programme monitored by Daily Sun, said that with N4.05 trillion already verified in fresh bank capital and reserves at a 13-year high, Nigeria’s macroeconomic buffers appear stronger.
They however stated as the recapitalisation deadline approaches and fiscal pressures build, the balance between growth support and price stability will remain central to policy direction in the months ahead.
