Amidst the struggles faced by Nigerians—from soaring food prices, fuel subsidy removal, unemployment, and security issues to inadequate power supply, expensive transportation, and subpar healthcare services—ActionAid Nigeria (AAN) issued a cautionary note to the Federal Government regarding the potential implementation of a bank recapitalization policy.
Andrew Mamedu, the Country Director of AAN, emphasized the need for extensive consultations before any decision is made. He stressed the importance of assuring Nigerians about the safety of their hard-earned money and advocated for maintaining the current interest rates without any significant increase.
Additionally, Mamedu highlighted the necessity for a compassionate approach in crafting this policy, emphasizing the importance of considering various factors to ensure its impact is human-centered.
He said: “Amidst the Central Bank of Nigeria’s (CBN) intention to recapitalize in pursuit of a $1 trillion Gross Domestic Product (GDP) by 2030, it is paramount for Nigerians to be assured that the burden of recapitalization does not disproportionately fall on the shoulders of the poor and Small and Medium Enterprises (SMEs).
“The ongoing hardships resulting from the fuel subsidy removal and pervasive inflation make it imperative that the recapitalization effort does not impose additional challenges on the citizenry.
“Nigerians must be assured that their hard-earned money is secure, and prevailing interest rates should not be adversely affected by this recapitalization. It is essential to safeguard against a scenario where the vulnerable segments of society bear the brunt of financial policies intended for broader economic objectives.
“Recapitalisation, in itself is not inherently negative; however, the outcomes must not lead to adverse effects on lending rates and hinder access to credit for businesses.
“We must learn from past experiences, such as the immediate impact of the President’s pronouncement that ‘Subsidy is Gone’ on fuel prices. Similarly, the mere announcement of an intention to recapitalize may trigger similar consequences, impacting the financial landscape even before the formal declaration of the recapitalization itself.
“Before any strides toward recapitalization are taken, a robust engagement involving the banking sector in broader economic reforms is of utmost importance. ActionAid Nigeria calls for a transparent and consultative approach in these discussions.
“It is crucial that the voices of all stakeholders, particularly those representing the interests of the poor, SMEs, and Civil Society Organisations, are not only heard but also given due consideration.
“The purpose of recapitalization, if not complemented by concerted efforts to address the structural issues contributing to economic challenges, must be questioned.”
He still maintained that, “ActionAid Nigeria emphasizes the necessity for a comprehensive and inclusive approach.
“This involves not only rigorous economic analysis but also a thorough consideration of socioeconomic impacts, alignment with development goals, and a steadfast commitment to addressing root causes for sustainable change.
“The overarching goal is to ensure that any recapitalization efforts contribute positively to the economic well-being of all Nigerians, particularly the most vulnerable segments of society.
“On the other hand, the intention for recapitalization, apparently to achieve President Bola Tinubu’s ambitious target, raises concerns about the feasibility of achieving this humongous figure within the set deadline and it could have potential self-serving implications that may detrimentally impact the overall well-being of the Nigerian population.”
