United Bank for Africa Plc (UBA) has announced plans to raise N144.8 billion ($90.2 million) in additional capital this year as part of its strategy to meet the Central Bank of Nigeria’s new recapitalization requirements and drive expansion into new international markets.

This latest capital raise comes on the heels of an N240 billion rights issue concluded earlier this year, which, together with the new funds, is expected to lift UBA’s paid-up capital above the N500 billion minimum now required for banks with international licenses. The bank’s Group Managing Director and CEO, Oliver Alawuba, said in a statement that the new capital would be “duly invested in additional technologies and business growth initiatives across Nigeria, Africa, and the globe.” He added that UBA was preparing to extend its footprint further by opening operations in France and Saudi Arabia, complementing its existing presence in 24 countries.

The push by UBA is part of a wider shake-up across Nigeria’s banking sector following the Central Bank’s announcement of a major recapitalization directive in March 2024. Under the new rules, banks were given two years, until March 31, 2026, to shore up their minimum paid-up share capital. For international banks, like UBA, the bar was set significantly higher at N500 billion, compared to the previous N50 billion.

The CBN said the tougher requirements were necessary to fortify Nigeria’s financial system against persistent economic headwinds, including high inflation, sluggish economic growth, and the naira’s steep devaluation following the 2023 currency reforms. Those reforms, which saw the unification of Nigeria’s multiple exchange rates and a sharp fall in the naira’s value, had exposed banks to significant foreign exchange risks and impacted their capital adequacy ratios. The regulator stressed that stronger capital buffers would enable banks to better absorb future shocks and continue lending to the real economy.

UBA’s drive to raise fresh capital mirrors similar moves by other top-tier Nigerian banks scrambling to comply with the new thresholds. Access Holdings Plc, the country’s largest lender by assets, announced last week that it had successfully raised N351 billion through a rights issue, making it the first of the Tier-1 banks to comfortably surpass the N500 billion benchmark. Access said its recapitalization leaves it well-positioned for further regional and global expansion.

Zenith Bank also confirmed it had concluded its capital-raising program, securing approximately N350.4 billion through a combination of rights and public offerings, boosting its paid-up capital to N614.6 billion — well above the minimum requirement.

Guaranty Trust Holding Company Plc (GTCO) adopted a phased approach, securing N209.4 billion in a first-round public offer earlier this year, with plans to launch a second phase targeting foreign institutional investors to complete its capital-raising drive before the deadline. GTCO’s management emphasized that the two-stage fundraising was aimed at not just meeting the regulatory mandate but also diversifying its investor base for long-term stability.

FBN Holdings, the parent company of First Bank of Nigeria, also rolled out an ambitious recapitalization plan. The group raised N150 billion through a rights issue in late 2023 and is seeking shareholder approval to raise an additional N350 billion. If successful, it would take FBN Holdings’ capital base to over N730 billion, giving it a sizable buffer above the regulatory minimum and additional firepower to finance technology upgrades, lending, and international expansion.

The 2024 recapitalization exercise is the second major sector-wide drive since the historic 2004 banking consolidation under former CBN governor Charles Soludo, which reduced the number of banks from 89 to 25 and created a stronger banking landscape. However, this latest round comes against a far more turbulent backdrop of macroeconomic instability.

Banks are under pressure not just to raise fresh capital but also to navigate a tough operating environment characterized by spiraling inflation, rising borrowing costs, and weakened consumer spending. In addition, the aftershocks of the 2023 currency liberalization — including heavy foreign exchange losses and a backlog of unsettled FX obligations, have further complicated the financial outlook for the sector.

Despite these challenges, industry analysts say well-capitalized banks will be better positioned to withstand economic shocks, finance critical sectors like infrastructure and agriculture, and support Nigeria’s ambition to achieve sustained economic growth.

UBA’s aggressive move to strengthen its balance sheet and expand into new territories reflects the broader shift among Nigerian lenders aiming not just to meet regulatory mandates but to seize new growth opportunities across Africa, the Middle East, and beyond.

The price of a 50kg bag of rice has tumbled to as low as N58,000 in parts of Nigeria, especially in border communities, following an influx of smuggled rice from the Republic of Benin.

A new report by S&P Global has confirmed that Nigeria’s staple food market has seen one of its sharpest price declines in recent years, even as regional warehouses overflow with supplies of Indian parboiled rice.

According to the report, the West African parboiled rice market has slumped to a near two-year low, triggered by India’s removal of export duties on parboiled rice, which led to a surge in exports to the region. Benin Republic, Nigeria’s neighbor and a traditional transit point for rice, has been a major beneficiary, with its warehouses filled to capacity, according to traders and participants cited by Platts, a unit of S&P Global Commodity Insights.

Between September and December 2024 alone, India exported about 2.11 million metric tonnes of parboiled rice to West Africa, up dramatically from 720,000 metric tons in the same period of 2023. Full-year figures show that India shipped 5.35 million metric tons of parboiled rice to West Africa in 2024, compared to 3.9 million metric tons the previous year, data from the Agricultural and Processed Food Products Export Development Authority (APEDA) indicated.

This surge has directly impacted Nigeria. Although rice imports are officially banned, the country remains the largest consumer of rice entering the Benin Republic, with much of it finding its way across the porous borders through smuggling networks. As a result, the price of a 50kg bag of local rice in Nigeria, previously ranging between N80,000 and N90,000, has fallen sharply to about N60,000. Imported Indian rice, meanwhile, is now being sold for as low as N80,000.

In some border towns in Ogun State, where proximity to Benin facilitates easier movement of goods, prices have fallen even further, with 50kg bags selling below N50,000.

However, despite the price crash, traders report that demand has not risen proportionally. Buyers are hesitant, preferring to wait for further price stabilization amid expectations that costs could decline even more.

“Despite the price decline, demand has not risen correspondingly. With prices continuing to slide daily, buyers are adopting a cautious approach, waiting for stabilization before making purchases,” S&P Global quoted one trader as saying.

The situation has supported calls by many economists and trade experts, urging the federal government to reconsider the ban on rice imports as a means of tackling soaring food inflation. They argue that the persistent smuggling of rice through the Benin Republic only highlights the inefficacy of the ban, while consumers continue to suffer from high prices in the official market.

Economists say lifting the import ban would not only crash prices further but also help tame inflation, which has eroded purchasing power across the country. They also argue that regulated imports could generate revenue through proper customs duties rather than fueling a black-market economy that benefits smugglers.

Nigeria is currently the largest producer of rice in Africa. Yet, despite significant efforts to boost local production through initiatives like the Anchor Borrowers’ Programme and several interventions in mechanized farming, local supply still falls short of national demand. Nigeria’s annual rice consumption stands at about 6.7 million metric tons, but local production is estimated to cover only about 57 percent of that demand, leaving a significant deficit that has traditionally been met through imports — legal or otherwise.

The gap between production and demand means that even at maximum output, Nigeria struggles to feed itself with locally grown rice. While policymakers have long championed self-sufficiency as the goal, experts argue that a mixed approach — strengthening local production while allowing strategic imports — would better serve consumers in the short to medium term.

Historical Context of Nigeria’s Rice Import Ban

Nigeria’s ban on rice imports dates back to a series of measures introduced by the federal government under former President Muhammadu Buhari beginning in 2015. The administration had sought to boost local production, conserve foreign exchange reserves, and achieve food security by heavily discouraging the importation of goods that could be produced locally.

Rice, being one of Nigeria’s most consumed staples, became a key focus of this policy. In 2015, the Central Bank of Nigeria placed rice on the list of 41 items ineligible for foreign exchange at the official market, effectively making it more expensive to import. Later, the land borders were officially closed to rice imports in 2019 in an even stricter bid to curb smuggling and protect local farmers.

The government argued that restricting rice imports would create incentives for domestic farmers and millers, drive agricultural investment, and reduce the country’s dependence on food imports. Programs such as the Anchor Borrowers’ Programme, launched by the Central Bank of Nigeria, provided loans to rice farmers to stimulate production.

However, while the policy achieved significant growth in local rice farming, it also led to unintended consequences. Production could not keep pace with surging demand, resulting in scarcity and sharp increases in local rice prices. This gave rise to a thriving smuggling economy, particularly through Nigeria’s border with the Benin Republic, where imported rice flows into the Nigerian market unchecked.

Despite increased surveillance and border patrols, the vast network of unofficial entry points along Nigeria’s land borders has made enforcement extremely difficult. The Nigerian Customs Service continues to struggle against well-organized smuggling syndicates, a development widely attributed to corruption within the institution.