NIGERIA Invest in 2012-13 - Newsdesk Media

Banking on Nigeria
Nigeria has worked hard to overcome an image problem associated
with major frauds of the past and has made huge strides to eliminate
corruption, largely due to the action taken by the governor of the
country’s central bank, as Alex Hawkes discovers
In a speech to students of Bayero
University, Kano, in February 2010,
Central Bank of Nigeria (CBN)
governor Mallam Sanusi Lamido
Sanusi described how the financial
crisis had revealed the depth of fraud
that pervaded Nigeria’s banking system.
Some bank chief executives, he
explained, had set up special-purpose
vehicles to lend money to themselves to
manipulate their stock prices, or to buy
properties around the world.
“One bank borrowed money and
purchased private jets, which we later
discovered were registered in the name
of the CEO’s son. In another bank,
the management set up 100 fake
companies for the purpose of
perpetrating fraud,” said Sanusi.
Afribank had used depositors’
funds to purchase 80 per cent of its
initial public offering, paying N25
($0.15) a share – those shares later
collapsing to just N3 ($0.02).
the economy and finance 55
New measures to improve the Nigerian banking
system spark optimism about the sector’s future
During the crisis the Nigerian
stock market, dominated by banks, fell
by 45 per cent and has not recovered.
But despite the difficulties suffered
by the banking sector, there is an air
of optimism about the Nigerian
financial sector, and about the country’s
economy in general.
With the CBN cleaning out the
system, and with Nigerian banks
consolidating to form stronger entities
that have the ability to operate not just
within Nigeria but beyond, there are
hopes that the country’s financial sector
could forge ahead.
Furthermore, global investment
banks are advising their clients that
Nigeria is on course to be one of the
invest in niGeRia 2012-13