Bank Recapitalisation to Shield Nigeria from Looming Global...

Samuel Mobolaji

Nigeria’s ongoing banking recapitalisation drive is emerging as a critical buffer against the ripple effects of renewed global trade tensions, sparked by the aggressive tariff policies of United States President Donald Trump.

With the April 2026 deadline for banks to meet new capital thresholds fast approaching, the Chief Economic Strategist at the ECOWAS Commission, Professor Ken Ife, has warned that Nigeria must brace for a potential economic storm as rising tariffs and protectionist policies threaten to destabilise global trade flows.

Speaking at the 36th Seminar for Finance Correspondents organised by the Central Bank of Nigeria (CBN) in Abuja, Professor Ife likened the current trajectory of U.S. trade policy to the infamous 1930s Smoot-Hawley Tariff Act — a measure widely blamed for deepening the Great Depression.

“Trump’s tariff strategy marks a return to an era where protectionism was seen as the shield for domestic industries. History tells us this path leads to global contraction, not prosperity,” Ife warned.

He added that the U.S. Supreme Court’s recent rulings have consolidated the president’s authority to enforce such measures, deepening the risk of an economic ‘tsunami’ for trade-dependent nations like Nigeria.

He also cautioned that the devaluation of the Chinese Yuan, combined with the rising cost of U.S. imports, could trigger a surge in demand for scarce foreign currency in Nigeria, further straining dollar reserves. This is compounded by forecasts suggesting global oil prices could slide to as low as $55 per barrel, a scenario that would deplete Nigeria’s excess crude account and undermine fiscal stability.

“The interplay of trade wars, currency devaluation, and sliding oil prices represents a clear structural risk. We must act now to shield our economy from these external shocks,” Ife stressed, urging Nigeria to learn from the protectionist failures of the 1930s and adopt proactive policy responses.

Echoing this sentiment, Dr Olubukola Akinniyi Akinwumi, Director of Banking Supervision at the CBN, noted that Nigerian banks have so far demonstrated resilience in meeting recapitalisation targets. “Banks are within the prudential threshold, and the sector is already witnessing new entrants in both core banking and non-interest banking segments,” he said.

Akinwumi assured that the recapitalisation framework will equip banks to absorb future economic shocks, including any fallout from the U.S. tariff hikes, while the apex bank continues to monitor global developments closely.

Meanwhile, CBN Deputy Governor, Corporate Services, Ms Emem Usoro, emphasised that the recapitalisation push is not just about weathering external shocks but about positioning Nigeria’s financial system to fund and fuel the nation’s ambition of building a $1 trillion economy.

Represented by Acting Director, Corporate Communications, Mrs Hakama Sidi-Ali, Usoro pointed out that Nigeria’s banking system had previously weathered global shifts through reforms that cut the number of banks from 89 to 25, and the sector must once again evolve to meet the demands of a globalised financial landscape.

“As we aim for a $1 trillion economy, strengthening the banking system through recapitalisation is non-negotiable. Our banks must be robust and resilient enough to power large-scale development financing and foster global competitiveness,” Usoro stated.

She maintained that with strong policy direction and sustained stakeholder commitment, Nigeria can transform its economy beyond the current $250 billion valuation, even as global headwinds gather force.