Nigeria: NGX to Leverage Technology in Banking Sector Recapitalization

The Nigerian Exchange Group (NGX Group) has announced plans to utilize technology to facilitate the capital-raising activities of financial institutions aiming to meet new capital benchmarks set by the Central Bank of Nigeria.

The announcement was made by Temi Popoola, the Group Managing Director/Chief Executive Officer of NGX Group, during a visit from Dr. Doris Uzoka-Anite, the Minister of Industry, Trade & Investment, to the NGX headquarters in Lagos. The minister’s visit to the NGX followed her stop at Nigerian Breweries Plc, which recently announced a temporary shutdown of two of its nine breweries due to economic challenges.

Popoola emphasized the need for deliberate government policies that positively impact the capital market and highlighted the bank recapitalization exercise as a significant opportunity for the market. He stated, “This recapitalization initiative by the central bank is a prime opportunity for transformational impact on our market. We are aiming to make these capital-raising transactions more digital, focusing on financial inclusion and engaging retail investors more actively.”

The initiative not only aims to streamline processes but also to broaden market participation through technology. Popoola added that this move could attract foreign investment back to the Nigerian market.

“Estimates suggest that banks could raise up to N3 trillion over the next two years, a substantial figure in relation to the sector’s market cap. Proper execution of these transactions could rejuvenate the capital market and attract both local and international investors,” he explained.

Popoola remains optimistic about the market’s capability to handle the upcoming capital influx, citing its recovery and growth since the market downturn of 2007/2008.

The NGX Group is collaborating closely with the Securities and Exchange Commission (SEC) to ensure the success of this initiative. Popoola detailed his recent discussions with the SEC, emphasizing their proactive role in guiding and supporting the recapitalization efforts.

A SEC source affirmed the commission’s readiness to manage any challenges that might arise during the recapitalization, noting that the relevant departments are well-prepared, backed by a comprehensive procedural manual.

Banking groups interested in this initiative have expressed intentions to explore funding opportunities not only in local markets but also internationally, reflecting a broad-based strategy to meet the new capital requirements efficiently.