Nigeria

Widescale corruption and fraud perpetuated by former Nigerian leaders has driven the state oil company into insolvency, local media Thursday reported the head of the Nigerian National Petroleum Corp saying, Platts reported. Austen Oniwon, NNPC group managing director, told lawmakers from the Senate on Wednesday in Abuja that some of the country's past leaders caused to be withdrawn the sum of Naira 1.5 trillion ($10 billion) from the NNPC treasury for various uses other than oil and gas projects, Punch newspaper reported.

Nigeria took a step closer to resolving its financial crisis on Monday when Goodluck Jonathan, president, approved the creation of a “bad bank” to soak up some of the estimated $10bn of bad loans that brought the banking system to the brink of collapse last year, the Financial Times reported. Almost a year after Nigeria’s once-booming banking sector was rocked by revelations of reckless lending gone awry, Mr Jonathan backed a public asset management company similar to those employed by Ireland and other crisis-hit rich countries.

Nigerian banks are extremely risky, despite a N620bn bailout of the sector in 2009, a global rating agency, Standard & Poor, has said. “The Nigerian banking system is still highly risky. The ratings we have for the banks are in the single ‘B’ category, it‘s a very very low level compared to most banks in the world,” Mr. John Gibling, Managing Director (financial institutions) at S&P, said in London on Monday, Punch reported.

The recent storms in the Nigerian banking industry may have revealed deeper insights into the true standing on many more issues than banking in Nigeria, BusinessDay reported in an editorial. The banks in question actually got operationally weak and near collapse because of the non-performing loans granted to mainly players in the various sectors of the economy.