Banks have fresh capital, but businesses still lack credit. Can that change? Festus Akanbi asks
Nigeria’s banking sector has emerged from one of the most ambitious recapitalisation exercises in its history, raising about N4.65 trillion in fresh capital and strengthening balance sheets across the industry. Yet, despite stronger banks and improved profitability, the African Development Bank (AfDB) has raised concerns about the sector’s limited contribution to economic growth, noting that credit to Nigeria’s private sector accounts for only 9.4 per cent of Gross Domestic Product (GDP).
The figure places Nigeria among the weakest performers in Africa. It highlights a critical challenge facing the economy: the inability of businesses, particularly small and medium-sized enterprises (SMEs), to access affordable financing needed for expansion, innovation and job creation.
AfDB’s Concern
In its African Economic Outlook 2026, the AfDB described Nigeria’s financial system as shallow and insufficiently developed to support long-term economic transformation.
