Nigerian national security adviser criticises financial sector reforms

Apr 20, 2010

The Central Bank of Nigeria's attempts to overhaul the financial sector have been criticised by the country's new national security adviser.

Speaking to Nigerian ministers over the weekend, Aliyu Gusau said intervention by the bank has "damaged economic activity in the banking sector to the detriment of the larger society", Reuters reports. Last year, nine banks were at the centre of a £600 billion naira (€2.9 billion) bailout, with many of their Chief Executives fired.

Furthermore, the tenure of bank chiefs was reduced and work got underway to set up an organisation that would buy up bad bank loans - the Asset Management Company. Mr Gusau's Spokesman Adebisi Adekunle also quoted him as saying that the "fragility" of Nigeria's financial sector means it is important those who jeopardise the industry are prohibited from operating without further damage being done.

Mr Gusau added Nigerian ministers need to be careful when making reforms to the country's economy, which, according to the news source, is the second-largest in sub-Saharan Africa.

Governor Lamido Sanusi is leading the reforms, which included bailing out weak capitalised banks last year. He was appointed to his position on June 3rd 2009, replacing Professor Chukwuma Soludo.