President Bola Ahmed Tinubu and the World Bank have urged Nigerian banks to reduce their reliance on government securities and direct more capital towards businesses and productive investments.
The call is aimed at encouraging banks to provide greater access to credit for businesses, stimulate private-sector investment, increase production and support job creation.
Tinubu said the banking sector must move beyond focusing mainly on balance-sheet growth and profitability and play a stronger role in financing businesses capable of expanding economic activity.
The President stressed the importance of making the benefits of Nigeria’s economic reforms more visible by ensuring that financial institutions provide the funding needed by businesses to invest, expand operations and create employment.
The World Bank also backed the call for increased lending to the private sector, particularly as economic reforms seek to reduce borrowing costs and strengthen investment.
The push comes as Nigerian banks have traditionally found government securities attractive because they offer relatively secure returns. However, policymakers are seeking a greater flow of funds into businesses and other productive sectors of the economy.
The government believes that redirecting more bank capital towards productive enterprises could help boost investment, manufacturing, employment and overall economic growth.
The call also comes amid the ongoing recapitalisation of Nigeria’s banking sector, with authorities expecting stronger banks to increase their contribution to economic development.
