Banks’ credit not a gift, says Alawuba

The Chairman of the Committee of Banks’ Chief Executive Officers, Oliver Alawuba, has warned that bank credit must not be mistaken for a gift or a grant, stressing that responsible borrowing and disciplined repayment are critical to Nigeria’s economic recovery and long-term growth.

Speaking at the Chartered Institute of Bankers of Nigeria (CIBN) 60th Anniversary Dinner held in Lagos, Alawuba reflected on Nigeria’s recent financial strains, particularly the severe depreciation of the naira and the erosion of investor confidence that marked the country’s most turbulent economic periods.

He recalled times when the currency lost substantial ground, leading to uncertainty across markets and institutions.

“There was a time when the naira depreciated sharply and confidence almost disappeared,” he said. “But today, the picture is changing. Bank lending now stands at N46.7 trillion, reaching 10.4 million Nigerians. This shows progress, and we must consolidate on it.”

Alawuba attributed the renewed confidence in the banking sector and the currency to ongoing reforms in monetary and fiscal policy, noting that global credit rating agencies have also begun to take a more positive view of the Nigerian economy.

“You have restored confidence in the naira,” he said, addressing policymakers and regulators present at the event. “These achievements are the result of bold reforms and the collaboration we now see between monetary and fiscal authorities. We cannot thank you enough.”

He emphasised that Nigeria’s path toward a $1 trillion economy, a goal articulated by the federal government, is realistic but requires deeper structural reforms, improved productivity, and sustained growth across key sectors.

Credit Must Drive Productivity—Not Consumption

The banking sector, he said, is committed to supporting productive lending but requires borrowers to understand their obligations.

“Bank credit is not a gift. Bank credit is not a grant. It is not to fund lifestyle,” Alawuba declared, adding, “Credit is a trust between the bank and the customer—for the benefit of the financial system and the wider economy. Banks lend money for economic growth, and the money must return so it can be lent again.”

He warned that irresponsible borrowing undermines economic progress, adding that strong risk management frameworks and timely repayments are essential for the sustainability of the sector.

Alawuba reaffirmed that the banking industry will continue to work closely with government and regulatory institutions to ensure a full turnaround of the economy.

“We are going to work with the authorities so that the complete turnaround of this economy can be achieved,” he said, adding, “The journey ahead is still long, but with deeper reforms, higher productivity, and strong leadership, Nigeria will get there.”

Professor Pius Olanrewaju, President and Chairman of Council of the CIBN, said despite persistent global and domestic headwinds, the Nigerian banking industry had shown a remarkable resilience, adapting in ways that surprised even seasoned economists. Banks were stepping up, strengthening the nation’s capacity to finance the real sector and support economic recovery.

He spoke about the growing challenge of the “Japa syndrome” in the bank sector, saying the institute had created the Human Capital Retention Fund: a lifeline designed to train new entrants and upskill existing staff.

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