The Managing Director of FSDH Merchant Bank, Bukola Smith, has asserted that the ongoing recapitalisation exercise in the banking sector will significantly enhance the capacity of financial institutions to support Nigeria’s real economy.
Speaking at the bank’s inaugural Investors’ Conference in Lagos on Tuesday, 5 May 2026, Smith noted that the surge in capital bases would empower banks to bridge the massive investment gaps currently existing in infrastructure and productive sectors.
Addressing a gathering of regulators, institutional investors, and stakeholders, Smith emphasised that while the Nigerian equities market has shown remarkable momentum, stronger mobilisation of long-term capital is required to maintain the current trajectory.
“Recent stock market gains signal renewed investor confidence, but sustained inflows are essential to preserve resilience and ensure that the market remains a robust engine for economic development,” Smith stated.
She further argued that the definition of an “investable nation” goes beyond mere price appreciation on the trading floor, focusing instead on the structural integrity of the financial system: “Strong market performance alone does not define an investable nation; rather, it depends on policy consistency, transparency, and the trust that long-term capital can be deployed safely and productively.”
Smith acknowledged the historical concerns regarding the banking sector’s depth of support for the real economy but expressed firm optimism that the new capital requirements would be a game-changer. She pointed out that public funding is no longer sufficient to meet the nation’s growing needs, necessitating a more proactive role from private financial institutions, saying, “Nigeria still faces significant investment gaps in infrastructure and productive sectors. With increased lending capacity following recapitalisation, banks will be better positioned to provide the durable funding required to stimulate industrial growth.”
However, she cautioned that this aggressive deployment of capital must be balanced with fiscal discipline to avoid systemic instability: “Capital deployment must be carefully managed to safeguard financial stability. Banks must maintain robust risk management frameworks as they expand their credit portfolios.”
Also speaking at the event, the Director-General of the Securities and Exchange Commission of Nigeria, Emomotimi Agama, highlighted the importance of regulatory discipline in sustaining these investment flows. He noted that Nigeria’s market capitalisation has now surpassed N130tn, a milestone that requires forward-looking oversight.
“Regulatory clarity and institutional trust are critical to sustaining the momentum we see today. Our regulation must anticipate innovation to ensure the market remains transparent and attractive to both local and foreign investors,” Agama noted.
The conference comes on the heels of a historic performance by the Nigerian equities market, which gained 29.35 per cent in Q1 2026. This rally saw the All-Share Index cross the 200,000-point mark for the first time, extending a six-quarter winning streak and signalling a new era of investor participation in the Nigerian economy.
