• Tekedia Capital highlighted a Chapel Hill Denham report warning that the Central Bank of Nigeria’s elevated cash reserve ratio is structurally depressing bank profitability, liquidity creation, credit growth, and market valuations.
• The report estimated an annual earnings drag of NGN 2.5 trillion under a 50% CRR, based on immobilizing NGN 50 of every NGN 100 of deposits in non-interest-bearing reserves while paying 5%-12% on deposits.
• It said Nigeria’s reserve requirement sits far above regional peers, citing South Africa at 2.5%, Kenya at 4.25%, Ghana at 15%, Egypt at 16%, and Morocco at 0%.
• It argued a gradual CRR reduction to 30%-40% over two to three years could be plausible if inflation and foreign exchange conditions improve, with a cut from 50% to 30% potentially releasing about NGN 8 trillion and adding roughly NGN 800 billion in annual pre-tax profit.
• The CBN’s February 2026 MPC decision kept CRR at 45% for deposit money banks, 16% for merchant banks, and 75% on non-TSA public sector deposits, reflecting a preference for tight liquidity to protect disinflation gains and the naira.

Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Tekedia Capital LLC published the original content used to generate this news brief on May 18, 2026, and is solely responsible for the information contained therein.