NIGERIA Law and Practice Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Onyinyechi Chima and Edidiong Antai, ǼLEX
This expanded scope represents a material develop - ment from the ISA 2007, which did not expressly cap - ture many of these restructuring transactions. As a result, public companies undertaking transformational transactions must now consider SEC oversight even where the transaction does not fall squarely within a traditional merger or takeover framework. The ISA 2025, therefore, materially broadens regulatory vis - ibility into strategic corporate reorganisations and has important implications for deal structuring in Nigerian M&A. Further, the ISA 2025 imposes explicit duties on acquirers and directors of target companies to act in good faith and treat all shareholders equitably. SEC review now emphasises adequate disclosure and fair participation of shareholders, aligning Nigerian prac - tice more closely with international standards. Recapitalisation Requirements for the Insurance and Pension Sectors In 2025, regulatory reforms introduced significant recapitalisation obligations for financial sector inter - mediaries beyond the banking industry. The Nigerian Insurance Industry Reform Act 2025 (NIIRA), signed into law in July 2025, substantially increases minimum capital requirements for insurance operators. Under Section 15 of NIIRA, life insurance companies must maintain a minimum capital base of NGN10 billion, non‑life insurers NGN15 billion, composite insurers NGN25 billion and reinsurers NGN35 billion, with all operators required to meet the new thresholds by 30 July 2026. The NIIRA also transitions the sector to a risk‑based capital framework and empowers the National Insurance Commission to adopt further capital and risk adjustments tailored to individual risk profiles, strengthening solvency standards and overall sector resilience. Failure to meet the revised minimum capital requirements within the compliance period may attract regulatory sanctions, including forced mergers, licence revocation or liquidation, which is likely to drive consolidation within the sector. In the pension industry, the National Pension Commis - sion (PenCom) issued a circular in September 2025, pursuant to Sections 60, 62 and 115 of the Pension Reform Act 2014, revising the minimum capital base for licensed Pension Fund Administrators (PFAs) and
Pension Fund Custodians (PFCs). Under the revised framework, the minimum capital for a new PFA licence is now NGN20 billion: PFAs with assets under man - agement (AUM) above NGN500 billion must maintain NGN20 billion plus 1 % of the excess AUM; while PFAs with AUM below NGN500 billion must maintain NGN20 billion. PFCs must maintain a minimum capi - tal of NGN25 billion plus 0.1 % of assets under cus - tody. Existing operators were originally given until 31 December 2026 to comply with the new thresholds, but PenCom has extended the deadline to 30 June 2027 to provide additional flexibility and to ease com - pliance pressures. These capital requirement changes reflect a regulatory focus on strengthening operation - al resilience, aligning capital with risk exposure and enhancing investor protection across Nigeria’s pen - sion industry. CBN Recapitalisation Requirements In March 2024, the CBN introduced a significant revi - sion of the minimum capital requirements for com - mercial, merchant and non-interest banks. This reform aims to strengthen the financial sector and support Nigeria’s ambition of becoming a USD1 trillion econ - omy by 2030. Under the new framework, the minimum capital for commercial banks with international authorisation has increased from NGN50 billion to NGN500 billion, while national and regional banks must now meet capital thresholds of NGN200 billion and NGN50 billion, respectively. Similarly, merchant banks are required to raise their capital base to NGN50 billion, while non- interest banks must now meet revised minimums of NGN20 billion for national authorisation and NGN10 billion for regional operations. Existing banks have until 31 March 2026 to comply with the new capital requirements, which must be met through paid-up share capital and share premium, excluding retained earnings and other reserves. Since the introduction of the framework in 2024, banks have been actively pursuing compliance strategies ahead of the 2026 deadline, including public offers, rights issues, private placements and mergers. As at 20 December 2025, 27 banks had raised capital through various transactions as part of their recapitalisation
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