The year 2024 proved challenging for Nigeria’s economy, with surging inflation prompting decisive interventions by the Central Bank of Nigeria (CBN). The Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MPR) four times during the year, moving from 26.25 percent in May to 27.50 percent by December, in an effort to curb inflation and stabilize the financial system.
CBN Governor, Mr. Olayemi Cardoso, highlighted the positive outcomes of these measures at the Chartered Institute of Bankers of Nigeria (CIBN) annual dinner in December, noting that inflation control and foreign exchange reforms were bolstering economic growth.
Indeed, Nigeria’s economy recorded a 3.46 percent growth in Q3 2024, up from 2.54 percent in the same period of 2023. Key contributors included the telecoms and financial services sectors, which rebounded with 5.17 percent real growth, and improved oil production alongside increased domestic refining capacity. However, agriculture and manufacturing lagged, underscoring the urgent need for economic diversification and targeted support for these sectors to reduce inflation and create jobs.
Bank Licensing and Expansion
The CBN approved several banking transformations in 2024, including:
- One bank transitioning to a non-operating financial holding company.
- A merchant bank becoming a national commercial bank.
- Two regional commercial banking licenses and one regional non-interest banking license.
- Licensing of 16 new microfinance banks, the re-licensing of 53 previously revoked microfinance institutions, and five new finance companies.
Bank Recapitalization Plans
In November 2023, the CBN mandated higher capital thresholds for banks, effective by March 31, 2026. Banks must submit recapitalization strategies by April 30, 2024, choosing between equity issuance, mergers, or adjustments to their operating licenses.
As 2025 begins, the CBN’s commitment to collaboration with fiscal authorities and a focus on key sectors aims to sustain growth and deliver tangible progress for Nigerians.
