Ugo Obi-Chukwu, the CEO of BusinessTimes, says a shift by the Central Bank of Nigeria (CBN) to orthodox financial coverage has restored traders’ confidence.
Talking on TVC Information on Monday, Obi-Chukwu emphasised that orthodox coverage requires rates of interest to stay above inflation to draw international capital.
“When this central bank took place two years in the past, one of many first issues they mentioned was they had been going to undertake orthodox financial coverage,” Obi-Chukwu defined. “They weren’t going to do financial coverage the best way the previous central bank did; it was heterodox then.”
“Overseas traders had been pulling out as a result of inflation was rising and rates of interest had been low. So why would they convey their cash right here?” he requested. “You return to orthodox coverage, which implies your rate of interest must be greater than your inflation fee, or not less than monitoring it.”
This shift, he famous, has led to elevated international trade inflows and a extra steady FX surroundings.
“Right this moment, we’re seeing $142 billion in reserves. Some name it scorching cash, however scorching cash wants to return first earlier than it paves the best way for cooler cash.”
Price Cuts Sign International Shift Towards Development
Obi-Chukwu additionally addressed the current rate of interest reduce by the CBN, describing it as a response to easing inflation.
“On the macro stage, inflation numbers are trending down. So the central bank is responding to that slowdown,” he mentioned. “That’s why we’ve seen a 50 foundation level reduce. Some even count on a 100 foundation level reduce on the subsequent assembly.”
He positioned Nigeria’s financial easing inside a broader international context. “It’s not solely occurring in Nigeria. The U.S. has reduce charges. The EU has reduce charges. The U.Okay. has reduce charges. We’re now steadily transferring from hawkish financial coverage to at least one targeted on engineering development,” he added.
The shift, he mentioned, displays a world development the place central banks are pivoting from inflation management to stimulating financial growth.
Zenith Bank’s Dividend Payout Displays Sector Resilience
Turning to the banking sector, Obi-Chukwu praised Zenith Bank’s interim dividend payout of N1.25 per share, with a post-tax revenue of N532.2 billion.
“For a few of us shareholders, it was a nice shock,” he mentioned. “A couple of months in the past, we had been apprehensive banks may not pay dividends resulting from provisioning necessities from the central bank.”
He famous that the power to satisfy regulatory obligations and nonetheless reward shareholders alerts energy.
“You’ve been capable of chew the bullet and nonetheless pay dividends. That implies resilience, particularly within the surroundings we discover ourselves in,” he mentioned.
Obi-Chukwu added that Zenith is among the many 14 banks which have already met the CBN’s recapitalization threshold, reinforcing investor confidence.
Recapitalization and Lending Outlook for 2026
Obi-Chukwu highlighted the recapitalization drive as a strategic transfer to redirect liquidity into productive sectors.
“Banks are coming off sturdy income, boosted by trade fee good points and excessive rates of interest. They’re in a candy spot for traders,” he mentioned. “The truth that they’ve mopped up over N4 trillion exhibits how a lot money is within the system.”
Referencing CBN cash provide knowledge, he famous that Nigeria has over N510 trillion in circulation. “There’s a lot cash to mop up, and this suits into the CBN’s technique of transferring funds from non-productive to productive areas,” he defined.
Trying forward, Obi-Chukwu expects elevated lending exercise. “Producers are saying, ‘We’ve endured rates of interest at 35%. You’ve mopped up all this money. You’d higher begin lending to us now.”
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