Twenty Nigerian banks have met the CBN's new minimum capital requirements ahead of the March deadline, raising a combined N4.05 trillion in the process. On the surface, this looks like a win. Banks are better capitalised, the system looks more resilient, and the CBN can point to compliance as a success. That reading is not wrong, but it is incomplete.
Capitalisation is a foundation, not a guarantee. A well-capitalised bank can still be badly run. It can still concentrate its lending in ways that leave productive sectors of the economy without access to credit. Nigeria has had this conversation before. The banking consolidation of 2005 produced bigger banks, but it also produced the crisis of 2009, when several of those same banks nearly collapsed under the weight of bad loans and reckless exposure.
The question worth asking now is where this new capital actually goes. If it flows into government securities and consumer lending for the upper middle class, the recapitalisation changes very little for most Nigerians. If it genuinely expands credit to agriculture, manufacturing and small business, the story is different. The CBN's next job is making sure the latter happens, not just celebrating that the money was raised.