The CEO of United {Bank} for Africa (UBA) Plc, Oliver Alawuba, has appealed to the federal authorities to grant tax incentives and breaks to {financial} establishments investing in infrastructure and mining.
This name was made in the course of the thirty sixth Seminar of the Finance Correspondents Affiliation of Nigeria (FICAN) in Abuja, the place Alawuba emphasised the vital want for legislative assist to drive {economic} transformation.
Talking on the occasion, Alawuba urged the federal government to introduce tax incentives for recapitalization-linked investments, which he described as a “cornerstone for reaching Nigeria’s formidable objective of turning into a one-trillion-dollar economic system”.
He outlined the necessity for enabling laws to facilitate long-term capital mobilization, strategic communication, capability constructing, and strong engagement amongst stakeholders.
Recapitalization: A Landmark Coverage for {Economic} Development
Alawuba, who can be the Chairman, Physique of Banks’ Chief Government Officers, lauded the Central {Bank} of Nigeria’s transfer on banking recapitalization, describing it as a landmark coverage designed to align the power of the {financial} sector with Nigeria’s {economic} aspirations.
“It’s a needed and strategic step towards reaching the imaginative and prescient of a one-trillion-dollar economic system,” he mentioned. “As banks, we view this not solely as a compliance requirement however as a possibility to reimagine our function as {economic} enablers.”
He emphasised that Nigeria’s journey towards a trillion-dollar economic system would depend upon how successfully the {financial} sector mobilizes capital, strengthens vital infrastructure, helps the actual sector, and accelerates digital transformation.
“Robust economies are constructed on the foundations of robust banks,” he added.
Challenges on the trail to a trillion-dollar economic system
Whereas acknowledging the importance of the recapitalization coverage, Alawuba highlighted a number of challenges that would impede Nigeria’s {economic} ambitions.
- These embody regulatory and coverage inconsistencies, safety considerations, {financial} accessibility, and low ranges {of financial} inclusion.
- He careworn the significance of enough capital buffers for banks to successfully finance each conventional sectors similar to oil and gasoline, agriculture, and manufacturing, in addition to rising industries like Fintech, Inexperienced Vitality, and Infrastructure.
“Recapitalization is past a regulatory motion. It’s a strategic coverage designed to arrange the banking sector for the dimensions, complexity, and world competitors {that a} trillion-dollar economic system calls for,” he defined.
A Name for visionary management
Alawuba inspired Nigerian banks to take the lead in compliance, innovation, and {economic} stewardship.
He additionally urged regulators to offer steering with knowledge and adaptability, guaranteeing that insurance policies are designed to foster nationwide growth.
“Allow us to reimagine banking as a power for nationwide growth and commit ourselves to constructing an economic system that works for each Nigerian,” he concluded, calling for a collaborative effort to rework Nigeria’s {financial} panorama into one able to.
What you need to know
To additional improve the resilience of Nigeria’s banking sector, the CBN launched new minimal capital necessities for banks in 2024.
These revised thresholds considerably increase the bar for {financial} establishments, underscoring the CBN’s imaginative and prescient for a extra steady and environment friendly banking atmosphere.
- Industrial banks with worldwide authorization should preserve a minimal capital base of N500 billion.
- These with nationwide authorization require N200 billion, whereas banks with regional authorization should maintain N50 billion.
- Retailers with nationwide authorization want N50 billion.
- Non-interest banks should meet various necessities: N20 billion for nationwide authorization and N10 billion for regional authorization.
To accommodate this transition, the CBN has supplied banks with a 24-month compliance window, spanning from April 2024 to March 2026.
