Washington, April 15, 2026 (Katsina Times) –
The International Monetary Fund (IMF) has endorsed Nigeria’s ongoing bank recapitalisation drive, noting that stronger capital buffers are helping to shield the financial system from external shocks and enhance resilience amid rising global uncertainties.
Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department at the IMF, stated this during the presentation of the Global Financial Stability Report at the ongoing IMF/World Bank Spring Meetings in Washington DC.
He emphasised that maintaining strong fiscal positions is crucial for emerging markets to withstand volatile global capital flows, reduce exposure to sudden market reversals, and sustain macroeconomic stability.
Adrian highlighted the growing importance of bank recapitalisation during periods of global financial stress, stressing that a well-capitalised banking sector is essential for maintaining financial stability, particularly in times of persistent uncertainty.
According to him, stronger capital positions enable financial institutions to absorb shocks, sustain lending, and support broader economic stability.
He further noted that ensuring debt sustainability and strengthening fiscal buffers remain central to the IMF’s engagement with countries, especially in Sub-Saharan Africa, where tailored programmes are designed to address diverse economic challenges.
On capital flows to the region, Adrian observed that the ongoing Middle East conflict has triggered significant market reactions, with movements roughly twice those recorded during the early stages of the Ukraine crisis.
Despite these shifts, he said price reactions have remained relatively stable, reflecting a generally healthy global risk appetite, while calling for sustained investor confidence amid prevailing geopolitical tensions.
Also speaking, Jason Wu, Assistant Director in the IMF’s Monetary and Capital Markets Department, said capital flows to emerging markets are increasingly driven by debt rather than foreign direct investment and equity.
He warned that this trend raises concerns about long-term global financial stability, noting that countries with stronger fiscal positions tend to enjoy better access to international markets and lower borrowing costs.
Wu underscored the need for sustained fiscal reforms to guard against sudden capital outflows.
NAN
