Financial stability remains foundation for growth – Oyedele

The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, on Tuesday said Nigeria and other African countries could not achieve sustainable economic growth without maintaining stable financial systems built on public confidence, warning that monetary and fiscal policies alone would not deliver prosperity if the financial sector remained vulnerable to shocks.

Speaking at the opening of the 2026 International Association of Deposit Insurers Africa Regional Committee Annual Meeting and Workshop in Abuja, Oyedele said, “There can be no economic growth without financial system stability, and there can be no financial stability without public trust.”

The workshop, organised by the Nigeria Deposit Insurance Corporation, brought together financial regulators, policymakers and deposit insurers from across Africa to discuss public awareness and crisis preparedness.

Explaining the link between financial stability and economic development, Oyedele said confidence in financial institutions encouraged savings, investment and business expansion.

“Monetary and fiscal policy alone cannot drive prosperity if the financial sector is vulnerable to panic, capital flight, or systemic distress. The banking system is the nervous system of the macroeconomy. When depositors trust that their money is safe, capital flows productively, credit expands, and businesses grow,” he said.

He warned that misinformation circulating on digital platforms could rapidly trigger instability, even in financially sound institutions.

“Public trust is fragile. In the digital age, rumours and misinformation can spread across social platforms in seconds, creating liquidity shocks even for solvent institutions. If a depositor does not know their funds are protected, they will act on fear,” he said.

According to the minister, crisis preparedness should become part of institutional culture rather than a response activated only after emergencies occur. “The most successful crisis response is often the one that never becomes visible, because effective preparation prevented panic from occurring in the first place,” he added.

Highlighting reforms under President Bola Tinubu’s administration, Oyedele said the government had unified the foreign exchange market, removed the fuel subsidy and ended the Central Bank of Nigeria’s Ways and Means financing of government deficits to strengthen macroeconomic stability.

He also cited the completion of the banking sector recapitalisation exercise in March 2026, saying 33 of Nigeria’s 37 banks met the revised capital requirements after raising a combined N4.65tn, with more than 70 per cent coming from domestic investors.

“A better-capitalised banking system is a more resilient one, better able to absorb shocks and sustain lending without recourse to the deposit insurance fund. Stronger bank balance sheets mean a stronger financial safety net,” he said.

Oyedele further noted that Nigeria’s removal from the Financial Action Task Force grey list in October 2025 had improved confidence in the country’s financial system following reforms to strengthen anti-money laundering controls and inter-agency coordination.

Representing the Governor of the Central Bank of Nigeria, Mr Olayemi Cardoso, the Director of the Other Financial Institutions Supervision Department, Mr Solaja Olayemi, also stressed that confidence remained the foundation of every stable banking system.

“Confidence is the foundation upon which the banking system operates. Financial institutions perform their intermediation roles effectively only when depositors trust that their funds are safe,” he said.

He described public awareness as “a strategic component of financial stability,” warning that false information could spread rapidly through digital platforms and undermine confidence in the financial system.

“Today, information and, unfortunately, misinformation can spread within seconds across multiple platforms. Depositor reactions can be amplified rapidly through social media and digital channels,” he said.

Olayemi said the recapitalisation programme introduced by the CBN would reduce the likelihood of bank failures and strengthen depositor confidence.

The Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Mukhail Abiru, said financial stability remained fundamental to national development and called for sustained legislative support for the country’s financial safety net.

“Financial stability is not an abstract metric. It is the quiet heartbeat of a thriving nation, and it is what separates an orderly resolution from a disorderly panic,” he said.

Earlier, the Managing Director and Chief Executive of the Nigeria Deposit Insurance Corporation, Mr Thompson Sunday, said public confidence remained the most valuable asset in any financial system and urged African deposit insurers to strengthen cooperation in tackling emerging risks.

“Trust takes years to build but can be eroded within days if stakeholders perceive uncertainty or instability,” he said.