Posted by: Home Strange Home | November 3, 2009

Banking Reform in Nigeria

Since taking office in June, Lamido Sanusi, the Nigerian Central Bank Governor, has undertaken a series of substantial reforms to the Nigerian financial sector in an effort to improve the image of Nigerian banks and the Nigerian economy as a whole.  His underlying goal is to build confidence among potential investors and attract foreign capital and investment.  

The latest of Sanusi’s aggressive anti-corruption moves was announced today – in line with the standards in other countries, new regulations have been introduced in Nigeria which require banks to report any “large” cash transactions (defined as over £1,000) between accounts belonging to “politically exposed people.”  These people include government officials, politicians, executives of state-owned companies, judges and court officials, soldiers, etc.  The goal is to identify potential bribe payments and fight corruption, fraud, and money laundering. 

Sanusi has made few friends in his aggressive campaign to clean up Nigeria’s banking system.  In his shakeup of the banking sector commencing in August, he fired the top executives of five major banks and sent several bank executives to court for fraud charges.  In an interview with the BBC, Sanusi asserted that a gradual approach to reform would not work and that better transparency and improved disclosure were critical to an effective financial system in Nigeria. 

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