by Niyi Jacobs
Nigerian banks are struggling to attract foreign investors as they rush to meet the Central Bank of Nigeria’s (CBN) recapitalisation deadline. Despite the banks’ efforts to raise funds from the local market, foreign investors are wary of the uncertain business environment and are shunning Nigerian banks.
The CBN’s directive to increase the minimum capital base of banks has seen 26 banks scrambling to raise funds, but the process has been challenging. Foreign investors, who have traditionally been a significant source of funding for Nigerian banks, are now hesitant to invest due to concerns about the country’s economic stability, political uncertainty, and regulatory risks.
As a result, Nigerian banks are being forced to rely on the local market to raise funds, which is proving to be a difficult task. The banks are competing with other companies and government agencies for a limited pool of funds, and the interest rates are high.
Some banks have tried to raise funds through the issuance of bonds, but the response has been lukewarm. Others have attempted to raise capital through private placements, but the process has been slow.
The lack of foreign investment is a significant concern for Nigerian banks, as it limits their ability to grow and expand their operations. The banks are now facing a race against time to meet the recapitalisation deadline, and the uncertainty is causing jitters in the financial sector.
