Are Nigerian banks useless?
Jason 'Igwe' Njoku

Nigerian banks are as corrupt as Nigerian government. In fact they are like husband and wife. They lend to themselves and cronies for uncollaterized business and when they default they run to government for a bailout and create things like AMCON. Over 40 billion dollars in bad loans (aka money looted by bankers and friends) was shifted to the Federal Government of Nigeria. 40% of deposits. They blamed it on the financial crisis of 2008 and other silly excuses. Truth is they were using it to build hotels, petrol and diesel tank farms, build all those estates and inflated houses in Lekki, Ikoyi, Jabi, Asokoro, etc. Some like Hassan Oye-Odukale went and thought they were oil men and bought rigs to lease to oil companies and almost sunk First Bank. Some like Toyin Subair thought he could go head to head with DSTV. Loads of uncollaterized loans. All through paddy paddy relationships. Meanwhile Mama Calabar can’t get a loan to buy a fridge for her restaurant.

Nigerian banks escaped 2008–2010 but they were back to their bad old habits by 2012. I totally expected half of them to collapse in 2016 when they all fought over themselves to lend to their friends in “oil and gas”. Yet the same old good old boy structure saved them once again via the CBN and its rigged exchange rate policies which banks made a roundtripping meal of.

Nigerian banks reflects Nigerian elite capitalism. Thoroughly rigged, thoroughly lazy and thoroughly corrupt. The only thing that made them grow larger than life was Charles Soludo and his noble but ill placed policies. He thought Nigeria was South Korea where serious minds used banks to drive development. I bet now he regrets the recapitalization exercise (although it probably made him rich from stock on the back end) for it created monsters of corruption.

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