The Federal Ministry of Finance has allocated N75 million in its proposed 2025 budget to monitor the activities of banks and other financial institutions under its Home Finance Division.
This provision aims to strengthen oversight and ensure compliance with regulations in the financial sector.
According to the proposed budget, the allocation will be used for “monitoring and evaluation of activities of banks and other financial institutions (Home Finance).”
The initiative reflects the ministry’s commitment to maintaining a robust financial system by scrutinizing the operations of banks and financial institutions.
Also, the ministry has allocated another N25 million for the “annual assessment of the activities of agencies under the purview of the Division of Banks and Other Financial Institutions (Home Finance).” This allocation highlights the ministry’s emphasis on regular evaluation of financial sector performance.
Allocations for recapitalization
Beyond oversight activities, the proposed 2025 budget highlights significant investments aimed at strengthening Nigeria’s financial infrastructure.
Under the Service-Wide Vote for 2025, N20 billion has been allocated for the recapitalization of the Ministry of Finance Incorporated (MOFI). MOFI serves as the custodian of Nigeria’s government-owned investments, and the funds will enhance its capacity to manage these assets effectively.
Also, N10 billion has been set aside for the recapitalization of Development Finance Institutions (DFIs). DFIs play a critical role in funding projects that drive economic growth and development, especially in sectors such as agriculture, infrastructure, and small and medium enterprises (SMEs).
Implications for the financial sector
The allocation for monitoring banks and financial institutions suggests a proactive approach by the Federal Ministry of Finance to ensure the stability of the financial system. Regular oversight can help identify and address issues such as non-compliance, financial mismanagement, or potential systemic risks.
The recapitalization efforts for MOFI and DFIs indicate a broader strategy to bolster financial institutions that underpin Nigeria’s economic growth. Strengthened DFIs, for instance, can enhance access to affordable credit for businesses and individuals, furthering the government’s development goals.
What you should know
President Bola Tinubu on Wednesday presented the 2025 budget proposal to a joint session of the National Assembly, outlining an ambitious N49.70 trillion spending plan titled “Budget of Restoration: Securing Peace, Rebuilding Prosperity.”
- The budget prioritises defence, infrastructure, and human capital development, with a projected deficit of N13.39 trillion to be financed majorly through borrowing.
- The Federal Ministry of Finance headquarters has been allocated a total of N271.39 billion in the proposed 2025 budget.
- Further breakdown showed that a total of N3.41 billion has been allocated for personnel expenses. This covers salaries, wages, and other employee-related costs for staff within the headquarters.
- Overhead expenses for the ministry are projected at N3.57 billion. These funds will be used to manage the day-to-day operational and administrative expenses of the ministry.
- The bulk of the ministry’s allocation, amounting to N264.41 billion, is dedicated to capital projects. This demonstrates a significant investment in infrastructure and developmental projects aimed at enhancing the ministry’s operations and its impact on the economy.