Banks have appealed to the government to grant tax incentives and breaks to financial institutions financing infrastructure and mining as done in other climes like China and Brazil.
Oliver Alawuba, the Chairman, Body of Banks’ Chief Executive Officers (CEOs), made the appeal at the 36th Seminar of the Finance Correspondents Association of Nigeria (FICAN) in Abuja on Monday.
The seminar has as its title: “Banking Recapitalisation Towards a One-Trillion Dollar Economy: The Industry Perspective’.
Alawuba, also the Group Managing Director of United Bank for Africa (UBA) Plc, said that offering tax incentives for recapitalisation-linked investments and allowing partial Cash Reserve Requirement (CRR) refunds tied to infrastructure financing would help achieve the vision.
He also listed creating enabling legislation for long-term capital mobilisation, strategic communications, capacity building and stakeholders engagement as way forward toward achieving the one trillion dollar economy.
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According to him, the Central Bank of Nigeria (CBN)’s announcement on banking recapitalisation represents a landmark policy shift, aimed at aligning the strength of Nigeria’s financial system with its economic ambitions.
”It is a necessary and strategic step toward achieving the vision of a one trillion economy.
”As banks, we view this as a compliance issue and an opportunity to re-imagine our role as economic enablers.
”Nigeria’s path to a one trillion economy will be defined by how effectively the financial sector mobilises capital, supports critical infrastructure, strengthens the real sector, and accelerates digital transformation.
”Strong economies are built on the foundations of strong banks,” he said.
Alawuba described the CBN’s banks’ recapitalisation policy as timely and commendable which was necessary and strategic toward achieving the vision of a one trillion economy.
He however, listed some challenges to the achievement of a one trillion dollar Gross Domestic Product (GDP) economy to include regulatory and policy challenges, security concerns, financial accessibility and inclusion.
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”Banks today are expected to finance both traditional sectors like oil and gas, agriculture, and manufacturing, and emerging ones such as Fintech, Green Energy and Infrastructure.
”Without sufficient capital buffers, the sector cannot rise to this challenge.
”Recapitalisation is beyond a regulatory action, it is a strategic policy designed to prepare the banking sector for the scale, complexity, and global competition that a trillion-dollar economy demands,” the chairman said.
He called on banks to rise to lead in compliance, vision, innovation and economic stewardship.
Alawuba also urged regulators to continue to guide with wisdom and flexibility.
”Let us re-imagine banking as a force for national development and let us commit ourselves to building an economy that works for every Nigerian”. (NAN
