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SERAP: CBN Gets 7 Days Ultimatum to Account for ‘Missing’ N100Bn Dirty Notes, other public funds

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Socio-Economic Rights and Accountability Project (SERAP) has urged Mr. Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), “to account for and explain the whereabouts of the over N100 billion ‘dirty and bad notes’ and ‘other large sum of cash awaiting examination’ which are kept in various branches of the CBN.”

SERAP, which made the call through a statement issued by its deputy director, Kolawole Oluwadare, said the allegations are documented in the latest annual report recently published by the Auditor-General of the Federation.

SERAP also urged him to “explain the whereabouts of the N7.2 billion budgeted for the construction of the CBN Dutse branch in 2010 and the N4.8 billion budgeted for the renovation of the CBN Abeokuta branch in 2009, and to publish the names of the contractors who collected the money but failed to complete the projects.”

SERAP urged him “to explain the whereabouts of the allegedly missing outstanding loan of N1.2 billion granted to the Enugu state government in 2015 and the outstanding loan of N1.9 billion granted to the Anambra state government between 2015 and 2016 and to fully recover and remit the public funds to the treasury.”

SERAP also urged him “to refer these grave violations of the Nigerian Constitution 1999 [as amended], the CBN Act and the country’s national and international anticorruption obligations to appropriate anticorruption agencies for investigation and prosecution, as appropriate, and the recovery of the public funds.”

In the letter dated 29 June 2024 and signed by SERAP deputy director Kolawole Oluwadare, the organisation said: “These grim allegations by the Auditor-General suggest grave violations of the public trust, the provisions of the Nigerian Constitution, the CBN Act, and national and international anticorruption obligations.”

SERAP said, “These grave violations also reflect a failure of CBN accountability more generally and are directly linked to the institution’s persistent failure to comply with its Act and to uphold the principles of transparency and accountability.”

According to SERAP, “These grave violations have seriously undermined the ability of the CBN to effectively discharge its statutory functions and the public trust and confidence in the bank. The CBN ought to be committed to transparency and accountability in its operations.”

The letter, read in part: “We would be grateful if the recommended measures are taken within 7 days of the receipt and/or publication of this letter. If we have not heard from you by then, SERAP shall take all appropriate legal actions to compel you and the CBN to comply with our request in the public interest.”

“Explaining the whereabouts of the missing public funds, publishing the names of those suspected to be responsible and ensuring that they are brought to justice and the full recovery of any missing public funds would serve the public interest and end the impunity of perpetrators.”

“According to the recently published 2020 audited report by the Auditor General of the Federation (AGF), the Central Bank of Nigeria (CBN) has since 2017 been keeping over N100 billion [N100,672,999,000.00] ‘dirty and bad notes’, and other large sum of cash awaiting examination in various branches of the CBN.”

The Auditor-General fears that the ‘dirty and bad notes’ initially planned to be destroyed may have been ‘be diverted and re-injected into the economy.’”

“The CBN in August 2010 also reportedly budgeted N7.2 billion [N7,286,500,476.76] for the construction of Dutse branch building. The Dutse branch was due to be completed in November 2012 but the contractors have failed to complete the project.”

“The Auditor-General is concerned that the project may have been ‘awarded to incompetent contractor,’ and wants the ‘job completed without further delay.’”

“The CBN in 2009 reportedly budgeted N4.8 billion [N4,812,608,028.10] for the renovation of the CBN Abeokuta branch. The Abeokuta branch was due to be completed in 2012 but the contractors have failed to complete the project.”

“There is no significant renovation work on the site, several years after the proposed completion date. The Auditor-General is concerned that the project may have been ‘awarded to incompetent contractor,’ and wants the ‘job completed without further delay.’”

“The CBN also reportedly failed to account for the missing outstanding loan of N1.2 billion [N1,294,453,887.83] granted to the Enugu state government in 2015 and the outstanding loan of N1.9 billion [N1,994,383,561.64] granted to the Anambra state government between 2015 and 2016.”

“The Auditor-General fears the public funds may have been diverted. He wants the money fully recovered and remitted to the treasury.”

“Paragraph 708 of the Financial Regulations 2009 provides that, ‘on no account should payment be made for services not yet performed or for goods not yet supplied.’”

“Section 35(2) of the Public Procurement Act 2007 provides that, ‘once a mobilization fee has been paid to any supplier or contractor, no further payment shall be made to the supplier or contractor without an interim performance certificate.”

“Section 16(6) of the Public Procurement Act states that ‘all bidders shall possess the necessary professional and technical qualifications to carry out particular procurements; the financial capacity and adequate personnel to perform the obligations of the procurement contracts.’”

“SERAP notes that Section 15(5) of the Nigerian Constitution requires public institutions to abolish all corrupt practices and abuse of power.” Section 13 of the Constitution imposes clear responsibility on the CBN to conform to, observe and apply the provisions of Chapter 2 of the constitution.”

“Paragraph 3112(ii) of the Financial Regulations 2009 provides that, “Where a public officer fails to account for government revenue, such officer shall be surcharged for the full amount involved and such officer shall be handled over to either the Economic and Financial Crimes Commission (EFCC) or the Independent Corrupt Practices and Other Related Offences Commission (ICPC).”

“Nigeria has made legally binding commitments under the UN Convention against Corruption to ensure accountability in the management of public resources. Articles 5 and 9 of the UN Convention against Corruption also impose legal obligations on the CBN to ensure proper management of public affairs and public funds.”

“Nigerians have the right to know the whereabouts of the public funds. Taking the recommended measures would advance the right of Nigerians to restitution, compensation and guarantee of non-repetition.”

“The Nigerian Constitution, Freedom of Information Act, and the country’s anti-corruption and human rights obligations rest on the principle that citizens should have access to information regarding their public institutions’ activities.”


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E-Financial

Nigeria Worst Hit by Crypto Currency Fraud

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Fraud in the crypto industry in African continent has soared by 48 percent over the past year and Nigeria is worst hit according to report by CAJ News.

Nigeria Worst Hit by Crypto Currency Fraud

This is according to the Sumsub State of the Crypto Industry 2025 report, which indicates Nigeria recorded the highest rate of fraud across the sector, at 8,3 percent.

Thus, this percentage of verification attempts were flagged as fraudulent.

Uganda, Kenya and Tanzania all have fraud rates of 4,8 percent, with Cameroon (4,5 percent), Ethiopia (3,7 percent), Ghana (3,5 percent), Algeria (2,6 percent), Benin (2,6 percent) and Morocco (2,1 percent) recording significant rates.

The most popular fraud types are document forgery (affecting 31 percent of surveyed companies), phishing (20 percent) and money mulling (15 percent), followed by account takeover (14 percent) and forced verification (12percent).

Simsub, the cyber crime expert, believes this surge highlights the need for companies to adopt artificial intelligence (AI)-powered detection, biometrics and continuous monitoring to enhance security.

 

The report states that innovations like biometric checks, AI-backed automation and document-free verification have boosted crypto platform users’ on-boarding success rates to 93,39 percent and reduced verification time by 46 percent, overall improving customer on-boarding while reducing drop-off cases.

Hannes Bezuidenhout, Vice President of Business Development (Africa) at Sumsub, said Africa’s growing adoption of crypto provided its own challenges, but the company foresaw increasing demand and growing user expectations across the continent.

“So it’s crucial for VASPs operating in the region to implement secure verification systems and stay vigilant to fraud, while keeping an eye on evolving and new regulations concerning the crypto sector to avoid fines.”

VASP is an acronym for virtual asset service provider.

 

 


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E-Financial

Banking Consolidation Less Likely as Nigerian Banks Meet Capital Requirements – Fitch

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Fitch Ratings has said that Nigerian banks are making significant progress in raising core capital to meet new paid-in capital requirements. The rating agency noted that the banks are generally on track to meet the end-of-first quarter (Q1) 2026 deadline.

This is supporting a recovery in capitalisation from the impact of naira devaluation, providing fuel for business growth. It also reduces the likelihood of significant banking sector consolidation.

In March 2024, the Central Bank of Nigeria announced a significant increase in paid-in capital requirements (share capital plus share premium) for commercial, merchant and non-interest banks.

Banks have three ways to comply – through equity injections, M&A and downgrading their licence authorisation.

Fitch-rated banks have made notable progress towards compliance. Almost all have raised capital or formally launched the process to do so.

The two largest banks, Access Holdings and Zenith Bank, are the first to secure enough fresh capital to meet the N500 billion requirement for an international licence. First HoldCo, United Bank for Africa and Guaranty Trust Holding Company are taking a phased approach.

They have recently raised capital and have shareholder approval to begin raising more to meet the N500 billion requirement. First HoldCo’s and United Bank for Africa’s recent rights issues are awaiting final regulatory approval.

Fidelity Bank and FCMB Group have completed initial capital raisings but will need to raise more to maintain their international licences. As second-tier banks, they must raise significantly more capital relative to their balance sheets than larger banks.

They have extraordinary general meeting approval for this, although they could consider downgrading to a national licence as they each have just one foreign subsidiary.

Ecobank Nigeria Limited (ENG) and Jaiz Bank needed only small capital injections to meet their requirements and have already achieved compliance. We estimate that ENG is still in breach of its total capital adequacy ratio (CAR) requirement of 10 percent but it has further capital-raising plans to restore compliance. Stanbic IBTC Holdings has launched a rights issue to raise capital to maintain its national licence.

Strong investor appetite has ensured that the vast majority of capital raisings so far have been successful, and most first- and second-tier banks should be able to meet their new capital requirements through capital raisings alone. Therefore, we believe the likelihood of banking sector consolidation among first- and second-tier banks has decreased.

Union Bank of Nigeria (UBN), which is also in breach of its 10 percent CAR requirement, and third-tier banks have generally been slower to raise capital. Wema Bank has shareholder approval to raise enough capital to retain its national licence and plans to launch the process in April.

Coronation Merchant Bank recently received board approval. It is not clear whether UBN and unrated third-tier banks have received the necessary approvals. M&A activity and licence downgrades remain more likely among third-tier banks.

The capital raisings are contributing to a recovery in capitalisation from the impact of naira devaluation, which put pressure on capital ratios and increased US dollar credit concentration risks. Strengthened buffers over minimum CAR requirements will mitigate risks from a challenging operating environment, including regulatory intervention and further naira volatility, while providing room for business growth.

The capital raisings are unlikely to lead to banks with Long-Term Issuer Default Ratings (IDRs) of ‘B-’ being upgraded given the constraint of Nigeria’s ‘B-’/Positive Long-Term IDR.

However, they could contribute to Outlook revisions to Positive for some banks, and, providing CAR compliance is restored, to upgrades for UBN and ENG (both rated ‘CCC’). Capital raisings are more likely to affect National Long-Term Ratings, which measure the relative creditworthiness of Nigerian issuers.

 


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E-Financial

GTB Announces Zero Processing Fees on POS Transactions

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Guaranty Trust Bank Ltd has announced the removal of processing fees on all GTBank POS terminals, reinforcing its commitment to supporting businesses with cost-effective payment solutions.

This initiative, which took effect Tuesday, 11 February 2025, communicates that merchants using GTBank POS terminals will no longer incur Merchant Service Charges (MSC) when receiving payments from customers.

With this initiative, all qualifying SME Merchants can now receive payments at zero cost, allowing them to reduce operational expenses, whilst promoting the merchant’s enterprise, and enhancing customer experience.

Speaking on the initiative, Miriam Olusanya, Managing Director, Guaranty Trust Bank Nigeria, said: “At Guaranty Trust Bank, we are always looking for ways to add value to our financial ecosystem.

“By implementing the zero processing fees on POS transactions, we are empowering businesses to get the full value of every payment they receive, whilst also ensuring a more seamless and efficient payment experience.”

The Zero Processing Charge campaign aligns with GTBank’s ongoing efforts to empower businesses with innovative financial solutions that drive growth and efficiency.


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