Banks, especially those with heavy government deposit exposure, may need to find alternatives to drive private sector funds into their coffers, as the Monetary Policy Committee of the Central Bank of Nigeria introduced a 75 per cent Cash Reserve Ratio on non-Treasury Single Account deposits.

CBN Governor Olayemi Cardoso, while reading the communique at the end of the two-day meeting, said the introduction of the 75 per cent CRR on non-TSA public sector deposits was to enhance liquidity management.

Cardoso noted that despite the consistent deceleration in inflation, the MPC had observed the persistent build-up of excess liquidity in the banking system, resulting largely from fiscal releases emerging from improved revenues.

TSA balances are revenues, receipts, and payments of ministries, departments, agencies, parastatals, and other institutions of the Federal Government that are warehoused directly with the CBN, while Non-TSA deposits represent state and local government funds typically maintained with Deposit Money Banks.

Like the CBN pointed out, these balances tend to swell after Federation Account Allocation Committee distributions, injecting liquidity into the system with effects for FX stability and inflation.

Commenting on the development, analysts at Afrinvest said that non-TSA government deposits, particularly FAAC allocations to state and local governments, have historically provided a sizable pool of cheap deposits for commercial banks.

“Based on anecdotal evidence over the past three years, episodes of naira depreciation often coincided with periods immediately following FAAC disbursements into the banking system. Since state and local government shares are immediately available on banks’ balance sheets, a possible link exists between FAAC flows and exchange rate volatility. By sterilising 75.0 per cent of such balances, banks would need to double down on their effort to mobilise cheap capital from the private sector,” stated their weekly report. “Banks with heavy government deposit exposure may face near-term margin pressures.”

Speaking with The PUNCH, the Chief Executive Officer of CFG Advisory, Tilewa Adebajo, agreed that curbing excess liquidity was at the heart of the introduction of the 75 per cent CRR on non-TSA deposits.

Adebajo pointed out that for the country to move from stability to growth, the government needs to curb its spending.

He said, “One of the things that I’m happy about is that the MPC has increased the CRR for non-TSA deposits to 75 per cent. The Minister of Finance and Coordinating Minister of the Economy has now been given the powers to be able to approve spending, and working with the Central Bank, we can see how they can curb that (excess liquidity).

“If you discount food and energy inflation, which makes up core inflation, you will see the driver of core inflation has been fiscal spending, and this move, I think, is very positive because there are a lot of government deposits outside of the Treasury Single Account, and I think it is important that liquidity is mopped up to control inflation. With this mopping up, hopefully, we will put fiscal spending in check and be able to sustain the downward trend in inflation. Also, because of the high interest rate, not many people are borrowing, and that liquidity is looking for somewhere to go. With this limit, it will go back to the CBN to sustain the downward trend in inflation and to begin to hope for a high growth rate.”

He added that despite the hefty 75 per cent CRR on non-TSA deposits, banks can enjoy some relief as the CRR for commercial banks has been adjusted to 45 per cent from 50 per cent.

“They have all our deposits now at 45 per cent CRR,” he stated.

Adebajo went on to assert that until inflation gets to 12 per cent or below, Nigerians may not feel the impact of the deceleration. He stated, “The target is that we should get to 12 per cent inflation. If Nigeria is at 12 per cent inflation, our economy would grow at eight per cent or more, and that is what we need on a sustainable basis.”

CardinalStone, in their report following the MPC’s decision, said that the committee had struck a hawkish note despite cutting the benchmark rate by 50 bps to 27 per cent.

“Our estimates suggest that as of end-2024, Non-TSA balances accounted for 1.6 per cent of the broad money supply (M3) and were equivalent to 1.3x state and local governments’ FAAC receipts in December 2024. This reduces the risk that large FAAC-related inflows will drive FX demand pressures at the parallel market, as outflows are expected to be more gradual and linked to actual expenditure patterns.

“For the banking system, the impact should be a function of the treatment of the new CRR on non-TSA deposits (e.g., applied on total deposits as is the case with regular CRRs or focused only on new deposits), with the CBN expected to provide more clarity on operational dynamics,” said the experts.

Overall, the market watchers contend that the decisions of the MPC underscore a delicate balancing act of loosening just enough to support growth momentum, showing confidence in the decelerating inflation, while tightening around vulnerable liquidity channels to safeguard price and foreign exchange stability.

Prudential Zenith Life Insurance Company Limited has revealed that it has crossed the minimum regulatory capital threshold set by the new Nigerian Insurance Industry Reform Act by N19.3bn.

In a statement made available to our correspondent, the firm stated that its National Insurance Commission-approved audited financial results for 2024 showcased exceptional financial strength.

NIIRA 2025 mandates new minimum capital requirements, including the crucial shift to a risk-based capital framework. This means insurers will now calculate their capital based on the specific risks they face, encompassing insurance, market, credit, and operational risks, moving away from a one-size-fits-all approach previously in place. For instance, the proposed new minimum for non-life insurance business rose to N25bn (or RBC as determined by NAICOM) from N10bn, life insurance to N15bn from N8bn, and reinsurance to N35bn from N20bn.

In its 2024 financial report, Prudential Zenith Life posted a 21 per cent rise in profit after tax to N7.4bn and a 29.5 per cent expansion in total assets to N82.0bn, driven by a 29.6 per cent rise in financial assets. Shareholders’ equity rose 32.2 per cent to N30.5bn (2023: N23.1bn), fuelled by a 51.8 per cent increase in retained earnings to N19.5bn

The solvency margin strengthened 28.3 per cent to N29.3bn, achieving a N19.3bn surplus over the N10bn regulatory minimum, whilst Insurance Contract Liabilities expanded 29.7 per cent, comprising 95.4 per cent of total liabilities.

Commenting on the results, the Chief Executive Officer of Prudential Zenith Life, Ms. Funmi Omo, said, “Our 2024 performance is a testament to our unwavering commitment to excellence. Achieving a 21 per cent profit increase while maintaining a capital surplus nearly double the regulatory requirement demonstrates our financial resilience and strategic foresight.

“The N19.3bn buffer from the original shareholders’ funds of N29.3bn empowers us to innovate, expand, and deliver unparalleled value to our customers and shareholders as we embark on the next phase of growth.”

Prudential Zenith Life said its robust financial health reinforces its mission to secure the future of its customers through innovative insurance solutions.

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL) Engr. Bashir Bayo Ojulari, has said the Ogoni re-entry plan is a bold step towards justice, healing, and national prosperity.

The re-entry into Ogoniland marks a historic turning point for Nigeria — not just in terms of oil production, but more broadly, the milestone reflects the spirit of President Bola Ahmed Tinubu’s Renewed Hope Agenda, which commits to building a stronger country, attracting responsible investment, and ensuring that community development is at the heart of national progress.

Speaking during the presentation of the Ogoni Consultations Report at the State House in Abuja on Wednesday, President Tinubu acknowledged that the Ogoni people have endured long years of pain, and that this re-entry reflects the government’s recognition of their sacrifices.

“We are not, as a government, taking lightly the years of pain endured in Ogoniland. We recognise that, otherwise we would not be here today…We declare with conviction that hope is here and is back with us,” the President said.

Ojulari, emphasized that the re-entry demonstrates that Nigeria can confront its past, honour the sacrifices of its communities, and forge a new path with a vision of prosperity and justice for all.

“The re-entry into Ogoniland is not just about oil and gas. It is about justice, healing, and charting a new future for our nation,” Ojulari said.

Ogoni re-entry can be seen as both a test and an opportunity for the country. It demonstrates that equity can exist in national development, and oil can co-exist with environmental stewardship and inclusive nation-building. This milestone is a practical example of how President Tinubu’s Renewed Hope Agenda translates into reality by strengthening our country, creating conditions for responsible investment, while prioritising the prosperity of host communities.

Ojulari acknowledged the pivotal leadership of the National Security Adviser, Mallam Nuhu Ribadu, in convening a committee that brought diverse stakeholders together, creating the platform for dialogue and consensus that made this breakthrough possible. He also praised the work of Professor Don Baridam and members of the Presidential Committee, who engaged tirelessly and transparently with all relevant parties to produce a report that tells a story of fairness and inclusivity that will ultimately bring closure and renew hope for the Ogoni people and all Nigerians.

“The lesson is that this journey cannot be driven solely by production volumes. It must be anchored on justice, equity, sustainability, and most importantly, collaboration with the very people whose land bears this wealth,” he stated.

To that end, Ojulari was categorical that in resuming operations in Ogoni, NNPC Ltd will continue to build trust by prioritising community engagements with key stakeholders, investing in infrastructure, and empowering local enterprise.

He confirmed that NNPC has already began initiatives in road construction, infrastructure upgrades, and economic empowerment programs designed to rebuild trust and demonstrate accountability in an inclusive manner. “NNPC Ltd is determined to transform Ogoniland from a symbol of conflict into a beacon of reconciliation, renewal, and sustainable progress,” he concluded.

In his remarks, the National Security Adviser, Mallam Nuhu Ribadu, echoed the general sentiments that sustainable progress is possible and proven through collaboration with all parties concerned. He said the report was the outcome of an intensive, methodical, and transparent engagement, while Professor Baridam, on behalf of the Committee, thanked the President for his unwavering commitment to the well-being of the Ogoni people, stressing that through diplomacy and relentless insistence on dialogue, host community trust was earned, and hope restored.

This restored hope is also a message for the international community— Ogoni re-entry is more than a Nigerian milestone. It is a classic example of how a resource-rich nation like Nigeria can reconcile environmental protection with energy security. By placing community benefit at the centre, Nigeria is rewriting the global playbook on how oil and gas operations can co-exist with local aspirations, sharing a global example of how energy development can be reconciled with environmental protection and community inclusion.

For Nigeria, it signals progress is being redefined as a partnership between government, industry, and the people.

The Nigerian National Petroleum Company Limited (NNPCL) and TotalEnergies Joint Venture (JV) have commissioned seven development projects spanning health care, infrastructure, agriculture, economic empowerment, and human capacity development.

The projects under the Obagi Oilfield Host Communities Development Trust (HCDT) in OML58, Ogba/Egbema/Ndoni Local Government Area of Rivers State aimed at building capacity of community people to further improve economic development in the area.

The projects, executed under the Petroleum Industry Act (PIA) 2021, were drawn from the Community Development Plan (CDP) in which 539 projects were identified across 64 host communities.

The Managing Director, TotalEnergies EP Nigeria Limited and Country Chair of TotalEnergies in Nigeria, Mr. Matthieu Bouyer, while speaking at the event, said: “The projects with impacts on health, agriculture, livelihood support, human capacity development, economic empowerment, among others, are part of the early fruits of the establishment of the HCDTs under the Petroleum Industry Act, (PIA) 2021.

The establishment of the HCDTs under the Petroleum Industry Act 2021 marked a new era in community engagement; one that places host communities at the centre of development planning and execution.”

He noted further that, “The commissioning of these projects reflects TotalEnergies’ identity as a responsible multi-energy company committed to enhancing the well-being of its host communities, in alignment with our ‘Sustainable Lever 4: Our Communities’. Through our five levers for sustainable change, we continue to give tangible expression to our broader development strategy as an energy company in transition and committed to the implementation of the 17 UN Sustainable Development Goals as it relates to our host communities.”

Mr, Bouyer reassured the Obagi people and Nigerians that,” We will continue to work with industry stakeholders for effective implementation of the PIA to ensure the sustainable socio-economic development of our host communities and the country at large.”

In his remarks, the Chairman, Senate Committee on Host Communities, Senator Ben Agadaga described the projects as quite significant, attributing the relative peace in the Niger Delta and the oil industry to the achievements of the PIA such as the Obagi HCDT.

River State Deputy Governor, Prof. Ngozi Odu, who is from the area recalled the challenges faced by the people especially poor infrastructures before the implementations of the projects.

She applauded Total Energies and its partners for implementing the PIA. She also thanked President Bola Tinubu and members of the National Assembly for creating the enabling environment to achieving such milestones.

Also speaking, the Chairman, House Committee on Host Communities, Dumnamene Dekor, represented by a member of the Committee, Cyril Hart, expressed delight on the quality of the projects delivered, stating that it is joyful to see communities enjoying social economic benefits from oil and gas revenue which according to him, brings peace.

On his part, the Executive Commissioner, Nigeria Upstream Petroleum Regulatory Commission, NUPRC, Capt. John Tonlagha, who represented the Commission Chief Executive, described the projects as a true representation of wisdom, accountability and diligence.

He said, ” This milestone translates to impacts, touching lives and strengthening sustainability. It shows that prioritizing dialogue over conflict is what has made this achievement possible. Sustainable development cannot thrive without support and ownership. Today, you have proven to Nigeria and the world that true progress is best built on foundation of unity and peace”.

Community leaders expressed delight at the initiative which directly or indirectly impacts more than 50,000 community residents, and called on people, especially the youth, to take ownership of the projects to ensure sustainability for generations to come.