E-Financial
Fraudsters Steal N16.5Bn from Nigerian Banks
Nigerian banks lost some N16.5 billion in 31,736 fraud cases between January 2014 and December 2016, according to Punch which quoted figures it obtained from the Central Bank of Nigeria (CBN).
The fraud statistics are contained in the Nigerian Electronic Fraud Report, which was prepared by the Banking and Systems Payment Department of the CBN.
The frauds were perpetrated through various payment channels in the banking sector such as Across the Counter, Automated Teller Machines (ATMs), cheques and electronic-commerce platforms.
Others are Internet banking, mobile banking, Point-of-Sale and web transactions.
Punch said that economic recession currently rocking the country increased the volume of fraud cases in the banking industry, with the attendant loss of money.
The report stated that in the last three years, there had been more attempts in the number of fraud cases, adding that the development might be linked to the economic hardship being experienced in the country.
For instance, the report stated that the volume of fraud cases rose by 635.3 per cent from 1,461 incidents in 2014 to 10,743 in 2015.
Between 2015 and 2016, the report stated that the incidents of fraud rose by 81.8 per cent from 10,743 to 19,532 cases.
Cumulatively, the incidence of fraud rose by 1,236 per cent during the three-year period.
In monetary terms, an analysis of the report showed that while there had been an increase in fraud volume, the rate of increase could not be achieved financially.
For instance, the report stated that in 2014, out of the total transaction value of N43.85tn in the banking sector, about N7.75bn was fraud-related.
However, it noted that while the transaction volume rose from N43.85tn in 2014 to N48.93tn in 2015, the amount involved in fraud-related transactions declined by N3.38bn or 43.6 per cent from N7.75bn to N4.37bn.
Between 2015 and 2016, the report stated that while the value of financial transactions rose significantly from N48.93tn to N64.18tn, the amount of fraud involved during the period dropped marginally from N4.37bn to N4.36bn.
The report read in part, “Although, values of the year 2016 are almost same with those of 2015, the difference in its volume when compared to 2015 suggests more success in curbing fraud.
“More attempts in volume can be seen over a period of three years, and the rate is expected to increase significantly if the current recession is to be taken into consideration.
“The current economic recession has and will always drive persons deeper into fraudulent activities.”
In terms of payment channels from which the frauds were perpetrated, the report stated that in 2014, fraudulent transactions conducted through the ATM were 491 cases; Internet banking, 287 cases; and web channels, 218 cases, were the top three.
In 2015, there were 5,133 ATM fraud incidents; PoS, 1,853 cases; and web, 1,463 cases, accounting for the top three most used channels to perpetrate fraudulent transactions.
In 2016, ATM with 9,522 cases; mobile, 3,832; and web channels, 2,677, were the three most used channels.
The report added, “Apparently, ATM and web channels have consistently appeared in the top three channels used to perpetrate fraudulent transactions for three years running.
“This is something we have to look at collectively in the industry as it can be deduced that ATM channel has been the focal point for fraudsters in the last three years.
“The emergence of mobile channel in this category cannot be extraneous to the various financial products and services we have these days, which ride on mobile platforms.”
Speaking on the increasing rate of frauds in the banking system, financial analysts called on the CBN and the Nigerian Deposit Insurance Corporation to step up their regulatory oversights, adding that sensitive positions in banks should not be given to those who were not members of relevant professional bodies.
Those that spoke to our correspondent in separate telephone interviews are the Head, Banking and Finance Department, Nasarawa State University, Keffi, Uche Uwaleke; and a former Managing Director Unity Bank Plc, Mr. Rislanudeen Muhammed.
Uwaleke, an Associate Professor of Finance, said the value system in the country, which celebrates wealth with no questions asked as to the source, needed to be changed.
He said, “There is also a justice system that is very slow and, therefore, fails to act as a deterrent to fraud. Equally are lapses in internal control systems of banks, which are circumvented by fraudulent staff sometimes with the connivance of auditors.
“Furthermore, the flip side of electronic banking is the level of sophistication associated with bank frauds and the specialist skills required in detecting such. So, it is not a surprise that the level of bank frauds is on the rise. Worse still, banking in Nigeria has become an all-comers affair where anybody who can bring deposits is employed.”
As a way forward, he suggested that the control systems in banks should be strengthened.
“Only professionals who belong to bodies that self-regulate their members, such as the Chartered Institute of Bankers of Nigeria, should be assigned to sensitive positions in the banks,” he added.
Muhammed said since bank frauds were a threat to the stability of the financial sector, both the CBN and the NDIC should step up strategies for tackling the menace.
He said, “Recent elevated risk in fraud cases will naturally impact negatively on the individual bank’s loan loss provision, other known losses as well as profitability and capital adequacy ratios.
“The risk of under capitalisation will also impact negatively on solvency ratios. This underscores the imperative for strengthening internal control as well as risk management divisions in banks.
“The Central Bank of Nigeria should ensure compliance by banks of having internal control officers in each branch. This ensures that fraud cases are dealt with timely and proactively rather than reactively or after the fact.”
He stated that in situations where fraud cases were at the corporate level, the chief internal control officers were duty bound to report directly to the regulators as provided by the law.
World Bank has said that despite nearly three years of economic reforms by the federal government, about 79 per cent of Nigerians remain poor or vulnerable to falling into poverty.
The bank stated this in its newly approved Country Partnership Framework for Nigeria, covering 2026 to 2032, and its accompanying Streamlined Country Diagnostic.
The report which highlighted the country’s deepening social and economic challenges, indicated that while recent macroeconomic reforms have helped stabilise the economy and restore investor confidence, the benefits have yet to translate into meaningful improvements in living standards for most Nigerians.
The World Bank noted that the seven-year strategy seeks to support Nigeria’s ambition to create more and better jobs through private-sector-led growth while accelerating poverty reduction.
According to the Streamlined Country Diagnostic document, “Thirty-three per cent of its population is ultra-poor (food insecure by age-weighted caloric intake), 61 per cent is below the poverty line, and 79 per cent is near poor (below the poverty line or vulnerable to falling back into poverty).”
The World Bank pointed out that Nigeria’s economic performance over the past decade had been constrained by structural rigidities, policy missteps, dependence on crude oil, and repeated external shocks, leaving millions trapped in poverty.
It stated that about 139 million Nigerians currently live below the national poverty line, with poverty concentrated largely in the northern part of the country.
The report also noted that more than 86 million Nigerians remain without electricity, while three to four million young people enter the labour market every year with limited employment opportunities.
It added that sustaining macro-fiscal and structural reforms would be critical to reducing inflation, expanding fiscal space and ensuring that recent economic stabilisation translates into improved living standards.
According to the report, the reforms have begun to improve macroeconomic indicators.
Economic growth increased from 3.5 per cent in the first half of 2024 to 3.9 per cent during the corresponding period of 2025, foreign reserves exceeded $42bn, fiscal deficits narrowed, and investor confidence strengthened.
However, it warned that high inflation continues to undermine household incomes. The report stated, “High inflation, though declining, continues to erode real incomes, particularly for the poor. Social protection efforts to support the most vulnerable have been slow and uneven in their rollout.”
The World Bank added that although the reforms helped Nigeria avoid a more severe economic crisis, institutional weaknesses, weak policy coordination, and inadequate budget transparency continue to pose significant risks.
It warned that sustained reform implementation, backed by deeper structural measures, would be required to improve Nigeria’s medium-term economic outlook.
Under the new Country Partnership Framework, the World Bank said job creation would serve as the primary pathway for reducing poverty.
The report explained that international experience from countries such as India, Indonesia, and China shows that moving people into productive employment remains the most effective tool for reducing poverty.
To achieve this, the framework will prioritise labour-intensive sectors, particularly agriculture and micro, small and medium enterprises, while addressing structural deficiencies in electricity, digital infrastructure, education and healthcare.
Securities and Exchange Commission (SEC) has commenced a nationwide enlightenment campaign to help Nigerians recover unclaimed dividends and other monies arising from capital market transactions.
The campaign, which began with a town hall meeting in Lagos on Thursday, is aimed at sensitising investors on the existence of unclaimed monies, the role of the National Investor Protection Fund (NIPF) and the procedures for verifying and recovering legitimate claims.
Emomotimi Agama, director-general of SEC, who was represented at the event by Hafsat Rufai, director, Registration and Exchanges, Market Infrastructure Department, said the initiative was necessary to ensure that funds belonging to investors were returned to their rightful owners.
Agama said unclaimed monies administered by the NIPF included return monies from public offers, scheme consideration from mergers, acquisitions and corporate restructuring transactions, as well as other funds belonging to investors that had remained unclaimed.
He noted that the Commission considered it unacceptable for investors’ funds to remain unclaimed, adding that many investors and their families were either unaware that such monies existed or did not know the procedures for recovering them.
Agama said the SEC Board had approved a nationwide public enlightenment campaign to sensitise Nigerians on unclaimed monies, the role of the NIPF and the process for making legitimate claims.
He said the Lagos programme marked the commencement of the outreach, which would subsequently cover the six geopolitical zones and the Federal Capital Territory.
The director-general said the campaign would also address the transmission of securities following the death of an investor, noting that families were often unaware that their deceased relatives owned shares or other capital market investments.
He said even when beneficiaries were aware of such investments, many lacked knowledge of the legal and administrative procedures required to obtain probate or letters of administration and transmit the investments to the rightful beneficiaries.
Agama said the Lagos programme included an expert session on probate administration and the transmission of securities to demystify the process and provide practical guidance to investors and their families.
He urged investors to maintain proper records of their investments and encouraged families to take steps to preserve inherited wealth.
The SEC DG also warned Nigerians against Ponzi schemes and other fraudulent investment arrangements, saying fraudsters continued to exploit economic pressures and digital platforms to lure unsuspecting members of the public with promises of guaranteed and unusually high returns.
He urged the public to be cautious of investment opportunities offering risk-free returns, stressing that investor education and vigilance remained critical to combating financial fraud.
Speaking on behalf of Lawal Pedro, attorney-general and commissioner for Justice,Lagos State, Olujoke Ogunojemite, deputy director in the Ministry of Justice, commended the SEC for extending the campaign to Lagos and recognising the role of legal institutions in resolving issues relating to unclaimed dividends and other assets.
She said the issue had a practical impact on beneficiaries who were unable to access assets after the death of their loved ones.
Ogunojemite said the ministry was committed to ensuring that legal processes did not become barriers to beneficiaries seeking to recover legitimate assets.
She described the SEC’s outreach as commendable, saying it would help restore assets to their rightful beneficiaries.
The Nigeria Revenue Service (NRS) said the rollout of electronic invoicing (e-invoicing) will strengthen tax compliance, curb revenue leakages and improve transparency in tax administration as it moves to fully digitise the country’s tax system.
The Project Lead, NRS e-Invoicing Project, Mohammed Bawa, stated this at the DigiTax E-Invoicing Compliance Breakfast Session held in Lagos.
The event, organised by DigiTax, an NRS-accredited e-invoicing platform, formed part of efforts to support the agency’s ongoing education and sensitisation campaign on the e-invoicing mandate.
Bawa said the initiative aligns with global trends in tax digitization and is expected to help improve Nigeria’s tax-to-GDP ratio, which remains one of the lowest in Africa.
According to him, the system will provide the NRS with greater visibility into transactions across sectors, formalise activities within the informal economy and standardise invoice formats nationwide using globally recognized invoice schemas.
He added that e-invoicing would improve operational efficiency for both businesses and tax authorities while supporting the NRS’ transition from manual and electronic tax administration processes to a fully automated system-to-system interaction model.
Bawa noted that the legal framework for implementation is backed by the Nigeria Tax Administration Act, which prescribes penalties for non-compliance.
He disclosed that the NRS has completed onboarding large taxpayers and is preparing to enforce compliance with defaulting entities.
According to him, medium taxpayers are expected to begin compliance in the third quarter of 2026, while onboarding of emerging taxpayers will commence in 2027, with full adoption targeted for all taxpayers by the end of 2028.
Bawa urged taxpayers yet to be onboarded onto the platform to begin the process and work with accredited service providers to ensure compliance.
Speaking at the event, Country Director of DigiTax Nigeria, Olumide Akinsola, urged businesses to look beyond their internal systems and assess the compliance status of suppliers and counterparties.
He warned that businesses whose suppliers fail to transmit invoices through the MBS platform risk losing eligibility to claim Value Added Tax (VAT) input credits on such transactions, describing the resulting supply chain exposure as a significant commercial risk that many organisations have yet to quantify.
Akinsola also announced the launch of DigiTax’s white paper, ‘The State of E-Invoicing Readiness in Nigeria,’ which examines compliance adoption trends and the readiness gap across different taxpayer segments.
He added that DigiTax operates in Nigeria, Kenya, Zambia and the United Arab Emirates (UAE), noting that experience from those markets shows businesses that integrate early are better positioned to avoid disruptions when enforcement begins.
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