The annual banking and finance conference of the Chartered Institute of Bakers of Nigeria (CIBN) held in Abuja (September 8-9, 2026) literally provided the forum for echoes and lamentations of Nigeria’s irony of economic ‘growth without development.’ Speaker after speaker pointed to the apparent blind alley Nigeria’s economy had hit as a result of the outcomes of the reforms of President Bola Ahmed Tinubu administration in the past three-plus years.
In his opening address, President Tinubu, who was represented at the confab by minister of finance and coordinating minister of the economy, Taiwo Oyedele, pointed out that improvements in the country’s macroeconomic indicators do not amount to prosperity. To him, “although these improvements matter, we must not mistake macroeconomic stability for economic development. Stability is the foundation; prosperity is the destination.”
He said the next phase of his government’s reform programme would focus on converting economic stability into investment, production, jobs and improved living standards, with the banking and financial services industry expected to play a major role in financing the real economy. President Tinubu specifically charged the banks to translate the recently concluded recapitalisation exercise into affordable credit for businesses, warning that “bigger balance sheets would have limited economic value if productive sectors remain starved of finance.”
In a keynote address on the occasion, the World Bank country director for Nigeria, Mathew Verghis, acknowledged the gains of Nigeria’s recent reforms but maintained that job creation should become the next major test of economic policy. The World Bank chief noted that domestic credit to Nigeria’s private sector remained at 13 percent of GDP, while micro, small and medium-sized enterprises (MSMEs) received only about one percent of the credit despite their importance to employment. He argued that stability should serve as a platform for moving capital towards productive enterprises capable of expanding and creating employment.
Also in his opening address, president and chairman of council of the CIBN, Dele Alabi, pointedly acknowledged that “while significant milestones have been achieved in the country at the macro level, we have not yet reached our final destination.” Alabi said “it is imperative for the gains made in terms of macroeconomic fundamentals to be cascaded to the micro level—the household, the individuals and businesses.”
The CIBN president said the next phase of reforms should move stability from national balance sheets to business balance sheets and household budgets, particularly as millions of MSMEs continue to struggle with high operating costs, infrastructure constraints and limited access to finance.
Obviously, a common thread in all of these viewpoints is that the current state of the Nigerian economy is the outcome of the reforms of the President Tinubu administration. The unwholesome plights of all economic agents (individuals, households and businesses) are policy-induced; with each struggling to keep head above the water. Each of these entities, to varying degrees, has, for instance, been bearing the stifling effects of the tight monetary policy of the Central Bank of Nigeria (CBN) in the past three years.
The tight monetary policy, epitomised by high Monetary Policy Rate (MPR), currently at 26.50 percent, and high Cash Reserve Ratio (CRR) now standing at 45 percent—all constrain the credit creation capacity of deposit money banks (DMBs). These have translated to less accessibility and availability of the much-needed funds for households and businesses, especially MSMEs.
With businesses not flourishing; and not a few exiting the country, banks themselves have been taking a ‘flight to safety’ by deliberately avoiding much (credit) exposure to real sector operators—especially the industrial and agricultural sectors. No wonder Mr. President, at the CIBN event, urged the banks to “shift from merely financing the government to supporting businesses…”
President Tinubu said on the occasion: “A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit, manufacturing that is struggling cannot expand, and millions of productive MSMEs remain outside of [the] formal financial system.” Tinubu continued: “A bigger bank that does not finance a more productive economy is a suboptimal outcome.”
President Tinubu said: “For too long, attractive returns on government securities have made lending to the productive economy comparatively less compelling. As fiscal conditions improve, the government will progressively create space for more private-sector credit.” This implies that the asphyxiating (credit) environment in which all economic agents have been operating in Nigeria for over three years now remains the ‘handiwork’ of the government of the day. It is really self-indicting!
The “attractive returns on government securities” referred to by Mr. President is one of the direct outcomes of high MPR, and the generally challenging business environment, which made the banks to be very wary of the risks in extending credit to businesses. This, to a large extent, is also responsible for the attraction of ‘huge’ foreign portfolio investments (FPIs)—which is ‘hot money’—that has only helped in the hyped stabilisation of the economy.
It also follows that the ‘patient money’ — foreign direct investments (FDIs) — that is needed for real development has not been flowing into the country. Thus, although upwards of $10 billion came into Nigeria by way of capital importation in the first quarter of 2026, only about three percent of the total inflow was FDI, while more than 95 percent was FPI.
In the same vein, it has become obvious that it was fuel subsidy removal, and full floatation of the naira that induced and sustained runaway inflationary trend in the country in the past three years. The consequent crash of the naira vis-a-vis the dollar and other hard currencies in the foreign exchange (FX) market ruined not a few businesses. Many others fled the country, in frustration.
Today, the entire economy is still literally held by the juggler by high and highly fluctuating petrol prices. Hardly any local refinery functioning except the Dangote Refinery has survived, and it is thriving against all odds. The repair of the four state-owned refineries is yet a manifesto-building promise by Mr. President who has also been the substantive Minister of Petroleum Resources since May 29, 2023.
The CIBN Abuja confab, no wonder, provided a timely opportunity for vacuous lamentations and renewal of promises by the government of the day. The usual blame game and buck-passing also played out, as Mr. President challenged the banks to begin to fund the real sector operators. Yet, whatever the DMBs have been doing or not doing have been in direct response to the reform initiatives of the Tinubu administration. But, alas, whither real development?
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Marcel Okeke, a practising economist and consultant in Business Strategy & Sustainability based in Lagos, is a former Chief Economist at Zenith Bank Plc. He can be reached at: obioraokeke2000@yahoo.com; +2348033075697
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