Billionaire businessman Femi Otedola has endorsed the implementation of a windfall tax on Nigerian banks, labeling it as essential for achieving a fairer economic system.

Speaking on Wednesday, Otedola underscored the need for this tax amidst ongoing reforms in the banking sector.

“Imposing a tax on these exceptional profits is vital for ensuring a more equitable distribution of wealth. It allows those benefiting disproportionately to contribute more to the societal good,” Otedola remarked. He proposed that the proceeds from the windfall tax should be allocated to vital public services such as healthcare, education, and infrastructure, which would serve all Nigerians and mitigate social inequalities.

Otedola highlighted that recent changes in foreign exchange rate systems, including the consolidation into a single investors and exporters (I&E) window, have led to a depreciation of the Naira and increased bank asset values in U.S. Dollars. He argued that these increased gains should be redirected to support essential infrastructure and public welfare.

“These exceptional profits should be used to enhance infrastructure development, improve access to education and healthcare, and support public welfare programs. This approach would address the pressures on public finances and ease the cost-of-living challenges faced by many Nigerians,” Otedola asserted. He also criticized the banking sector’s extravagant spending on private jets, estimating an annual expenditure of $50 million and over $500 million on nine jets purchased by four banks. According to him, such extravagance erodes public confidence in financial institutions.

Otedola urged a shift in focus from personal luxury to operational efficiency, technological advancement, and superior customer service. “Banks must prioritize trust, integrity, and service over executive luxury. Emphasis should be on operational efficiency and innovation,” he stated.

He commended recent recapitalization measures that set capital requirements at N500 billion for international banks and N200 billion for national banks, calling them crucial for Nigeria’s economic progress.

Otedola emphasized the importance of ethical leadership and accountability, noting that these reforms represent the Federal Government’s dedication to enhancing the banking sector and advancing Nigeria’s economic development.