E-Financial
CBN Chides Banks over Money Laundering
Dr. Sarah Alade, acting governor of the Central Bank of Nigeria (CBN), has linked banks to money laundering and other related crimes and accused them of aiding or abetting the crimes knowingly or unknowingly.
This is even as African financial experts also expressed concern the unwholesome roles of banks globally in the increasing menace of illicit money transfers across regional borders and the negative implications for the global financial system.
Alade levelled the allegations against the banks in her keynote address at the opening ceremony of the Regional Course on Combating Money Laundering and Other Financial Crimes organised by the West African Institute for Financial and Economic Management (WAIFEM) in Abuja.
She specifically noted that “bank facilities are used knowingly and unknowingly to further the act of money laundering and in most cases to retain the proceeds of such crime”.
Charles Mordi, director, Research, of the bank, who represented by the acting governor said that over 80 per cent of the proceeds of money laundering were associated with banks, one way or the other, all over the world.
According to her, the extent of financial crimes in terms of dimension, nature and level of sophistication is becoming worrisome, and therefore called for urgency by countries to build an investigative culture where suspected proceeds of illicit activity become routine part of investigation process to “follow the money” and identify its sources, so that substantial confiscation orders can be obtained, and the launderers prosecuted.
Alade listed money laundering, which is closely related to illicit trafficking in narcotics and human beings, corruption, terrorism, prostitution, illegal mining as well as foreign exchange malpractices, bank and tax fraud, as amongst the most prevalent financial and economic crimes being contended with by countries globally today
She lamented that despite international effort to mitigate the menace of money laundering, including the establishment of the Financial Action Task Force to serve as the principal international standard setting body as well as the Basel Committee on Banking Supervision, among others, the crimes were still prevalent.
While noting that effects of money laundering and related economic and financial crimes cause distortions in the financial markets through misallocation of investment, the CBN boss explained that the unwholesome acts usually have “deleterious macroeconomic consequences such as inexplicable changes in money demand, prudential risks to banks soundness, contamination effects of legal financial transactions and increased volatility of international capital flows and exchange rate due to unanticipated cross-border asset transfers.”
She, therefore, warned that money laundering also had a dampening effect on foreign direct investment , especially when a country’s commercial and financial sector were perceived to be associated with the incidence of organised crimes.
Alade also lamented that a concentration of economic power by organised crime spelled doom and could all too easily infect the political terrain of any nation, adding that this also portended greater risk for the rule of law and burgeoning democracy in the sub-region.
She raised a greater concern on the connection between money launderers and terrorists which she said were borderless and formed part of a larger network operating across agencies and across borders.
The acting governor said that in view of the growing menace of money laundering, law enforcement appeared a needle-in-a-haystack effort but that this should neither deter nor dampen the enthusiasm of law enforcers to combat financial and other economic crimes in all forms.
Earlier, Prof. Akan Ekpo, director-general of WAIFEM, described money laundering as a major threat to financial stability in any economy, particularly to small and fragile economies like the ones in the West African sub-region.
In another development, the CBN helmswoman has restated the need for the retention of the apex bank’s autonomy.
She said allowing the current status of the regulatory financial institution would further strengthen stability in the financial sector, sustain the gains already made towards sustaining the nation’s economy growth.
She spoke at the opening of a national seminar on banking, finance and allied matters for legislators held in Abuja.
Alada noted that the past two decades of financial re-engineering roles of the CBN had translated to improved macro-economic environment, access to credit, financial inclusion, payment and settlement system, employment generation and strengthening of the market mechanisms in the country.
FCMB Capital Markets Ltd. successfully led the issuance of GLNG Funding SPV Plc’s ₦11.85 billion 10-Year Series 2 Senior Guaranteed Fixed Rate Infrastructure Bond, which closed in February. This milestone underscores investor confidence in Nigeria’s clean energy transition.
The bond, issued by GLNG Funding SPV Plc and sponsored by Green Liquified Natural Gas (GLNG) as part of its capital-raising plans, is a key step in financing the construction of a mini-LNG plant with a liquefaction capacity of 200,000 standard cubic meters of gas per day.
The facility will help bridge Nigeria’s power supply gap and offer industries a cleaner, cost-effective alternative to diesel.
The issuance was backed by InfraCredit, an AAA-rated infrastructure credit guarantee firm, and is expected to generate over 500 direct and 2,000 indirect jobs, supporting Nigeria’s sustainable economic growth.
“FCMB Capital Markets remains committed to financing projects that drive clean energy adoption and long-term economic impact,” said Ikechukwu Omeruah, Managing Director, FCMB Capital Markets Limited.
“We appreciate the trust placed in us by GLNG and the invaluable role played by InfraCredit and investors in enabling the successful conclusion of this transaction.”
As gas adoption accelerates in Nigeria, a 2022 Clarke Energy report estimates that manufacturers could save up to 30% by switching to gas from the grid and as much as 80% compared to diesel.
FCMB Capital Markets, a part of FCMB Group, has been instrumental in raising over ₦3 trillion in debt and equity capital for leading corporate organizations in Nigeria over the past five years, reinforcing its position as a key player in the country’s capital markets.
Nine leading Nigerian banks collectively generated N14.26 trillion in interest income in 2024, reflecting a 119.55% increase from N6.49 trillion in 2023.
This surge is attributed to the Central Bank of Nigeria’s Monetary Policy Committee raising benchmark interest rates to combat inflation, which reached 34.80% by the end of the year.
Among the banks, Zenith Bank recorded the highest actual income increase, while First Holdco led in percentage growth. Access Holdings, UBA, GTCO, Stanbic IBTC, FCMB Group, Fidelity Bank, and Wema Bank also reported significant gains.
However, a portion of this income was derived from non-performing loans, raising concerns about the sustainability of these earnings.
In contrast, the manufacturing sector faced operational costs of N2.5 trillion, with high interest and energy expenses straining growth. Industry leaders have called for a halt to further rate hikes, warning of potential risks to the real sector’s recovery.
This financial dynamic underscores the contrasting fortunes of Nigeria’s banking and manufacturing sectors. What are your thoughts on these developments?
In a bid to woo global capital and enhance investor’s confidence, Nigeria’s top financial leaders presented a unified front at a strategic investment forum hosted at the Nasdaq MarketSite in New York.
The event was organised by the Central Bank of Nigeria (CBN) in collaboration with Nigerian Exchange Group (NGX Group), JPMorgan, and the African Private Capital Association (AVCA).
The exclusive gathering brought together leaders from the Nigerian diaspora, global investment institutions, and corporate executives for insightful dialogue on the country’s evolving financial landscape and its readiness to attract global capital for sustainable growth.
Governor of the CBN, Olayemi Cardoso in a fireside chat with Nobel Prize-winning economist Dr. James Robinson, outlined Nigeria’s monetary policy direction, growth prospects, and efforts to deepen its financial markets.
He reaffirmed the CBN’s commitment to disciplined policy management, market-friendly reforms, and enhanced transparency to foster a stable, investor-friendly environment. Cardoso also stressed the importance of strong collaboration between regulators like the CBN and market operators such as NGX Group, describing it as critical to building a resilient financial system and mobilising long-term investments.
Temi Popoola, Group Managing Director/CEO of NGX Group, moderated an engaging discussion on how Nigeria’s reforms are repositioning the country as an increasingly attractive destination for global capital.
“Today’s dialogue marks a pivotal step in reshaping global perceptions of Nigeria’s investment story,” said Popoola. “The candid engagement between policymakers, market operators, and investors reflects the real progress Nigeria is making. NGX Group remains committed to supporting reforms that strengthen market structures, drive innovation, and accelerate economic growth.”
While investors welcomed Nigeria’s reform agenda, they emphasized that sustained confidence will require consistent FX policies, lower transaction costs, reduced regulatory friction, clearer direction on non-oil revenue reforms, an improved ease of doing business, and continued transparency in monetary and fiscal communication.
The forum ended on an optimistic note, with participants expressing strong confidence in Nigeria’s economic prospects and its potential for deeper integration into global financial markets, provided reform momentum continues.
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