$1trn economy: Banks urge tax breaks to support infrastructure and mining investment

By Seun Ibiyemi

Banks across Nigeria are urging the Federal Government to introduce tax incentives and reliefs for financial institutions that channel funds into infrastructure and mining projects—drawing on models already adopted in countries such as China and Brazil.

The appeal was made by Mr Oliver Alawuba, Chairman of the Body of Banks’ Chief Executive Officers and Group Managing Director of United Bank for Africa (UBA) Plc, during the 36th annual seminar organised by the Finance Correspondents Association of Nigeria (FICAN) in Abuja.

This year’s seminar carried the theme: “Banking Recapitalisation Towards a One-Trillion Dollar Economy: The Industry Perspective.”

Mr Alawuba drew attention to the importance of offering tax reliefs specifically linked to investments made under the recapitalisation framework. He also advocated for partial refunds of the Cash Reserve Requirement (CRR) when such funds are directed into infrastructure projects. In his view, these measures are not only necessary, but urgent if Nigeria is to realise its ambition of becoming a $1 trillion economy.

He also pointed to the need for clear and supportive legislation that enables the mobilisation of long-term capital, alongside improved strategic communication, enhanced training initiatives, and active engagement with key stakeholders.

Describing the Central Bank of Nigeria’s recent policy on banking recapitalisation as a pivotal development, Alawuba regarded it as both well-timed and forward-looking, designed to reinforce the financial sector in line with broader national objectives.

“Strong economies are built on strong banks,” he said, stressing that Nigerian banks need to rethink their functions—not merely as financial service providers, but as fundamental drivers of economic growth.

He acknowledged the multiple hurdles on the path to achieving a trillion-dollar GDP, including regulatory red tape, persistent insecurity, and limited access to financial services, particularly among underserved populations.

According to Alawuba, banks are now expected to shoulder the responsibility of financing both established sectors such as oil and gas, agriculture, and manufacturing, as well as rising industries like FinTech, renewable energy, and infrastructure development. However, without sufficient capital buffers, he cautioned, lenders may struggle to keep pace with these expanding expectations.

He called on the banking sector to lead by example through steadfast adherence to regulation, forward-thinking leadership, innovation, and a firm commitment to national progress. At the same time, he appealed to regulatory bodies to offer guidance marked by insight and adaptability.

“Let us reimagine banking as a force for national development, and commit ourselves to building an economy that works for every Nigerian,” he said in closing.