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

By Eniola Akinkuotu
Posted on Friday, 13 January 2023 16:35

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.