Why Recapitalisation Alone Won't Save Nigerian Banks

Nigerian banks are increasingly showing signs of strain, beset by internal capacity constraints that are now eroding service quality, undermining consumer confidence, and raising serious questions about the sustainability of recent regulatory reforms. Although the Central Bank of Nigeria (CBN) has introduced an ambitious recapitalisation programme—demanding that international banks raise their capital base to ₦500 billion and national banks to ₦200 billion—the sector's deeper problems run beyond finance.

- BY NIYI JACOBS

Infrastructural decay, mass talent flight, ageing technology, and poor staff morale continue to gnaw at the foundations of the industry, threatening to unravel gains from the capital expansion effort.

Recent data reveal just how precarious things have become. Five major financial institutions—Access Holdings, United Bank for Africa (UBA), Zenith Bank, Guaranty Trust Holding Company (GTCO), and Wema Bank—reported a combined 10 million customer complaints in 2023, marking a 63.5% surge from 6.12 million cases recorded the previous year. In just the first six months of 2023, complaints spiked 117% year-on-year to 6.87 million. Even more alarming was the monetary value of these disputes, which ballooned by 289% to ₦326.11 billion, compared to ₦83.78 billion in 2022. Many of these complaints—ranging from failed transactions and account discrepancies to fraud and poor customer support—reflect not only operational inefficiencies but also the growing frustration of a customer base that feels increasingly neglected.

Efforts to address these problems have not yielded the desired results. In 2022, the CBN directed banks to transform their ATM helpdesks into comprehensive complaint resolution centres. But despite this initiative, many banks remain overwhelmed. Systemic issues persist, driven by a combination of outdated technology, growing regulatory demands, cybersecurity vulnerabilities, and the haemorrhaging of skilled professionals. Rather than improving, customer experience appears to be deteriorating across the board.