CASH MACHINE

How Nigeria’s central bank lent $53bn to government and may crash the financial system

By Eniola Akinkuotu

Reserved for subscribers

Posted on January 13, 2023 15:35

Nigeria’s Central Bank Governor Godwin Emefiele © Because of high inflation, many had not predicted that the Nigerian central bank, led by Godwin Emefiele, would lower interest rates in March. REUTERS/Afolabi Sotunde — Because of high inflation, many had not predicted that the Nigerian central bank, led by Godwin Emefiele, would lower interest rates in March. REUTERS/Afolabi Sotunde

Just over a month before national elections, a mega financial scandal has emerged. Nigeria’s central bank stands accused of making up to $53bn of illegal loans to the federal government, racking up unpayable debts and driving down the value of the naira.

At the end of last year, Nigeria’s public debt was over $172bn and the West African country was spending over 80% of state revenues on servicing its financial obligations, says the respected Debt Management Office.

It may get even worse, according to Adetilewa Adebajo, managing director of the Corporate Finance Group, who accuses the central bank of breaking the law and reckons Nigeria’s debt stock could total $200bn if the bank’s balance sheet is investigated further.

There's more to this story

Get unlimited access to our exclusive journalism and features today. Our award-winning team of correspondents and editors report from over 54 African countries, from Cape Town to Cairo, from Abidjan to Abuja to Addis Ababa. Africa. Unlocked.

Subscribe Now

cancel anytime

Already a a subscriber Sign In