Nigerian president targets financial stability

Jul 20, 2010

Nigeria has addressed problems arising from the recent financial crisis by creating an asset management company.

It will purchase bad bank loans in a bid to encourage private sector lending, with President Goodluck Jonathan having signed off on a bill proposing its formation. Through the creation of the Asset Management Corporation of Nigeria, Mr Jonathan said he hopes to stimulate economic recovery as well as guarantee that the country's financial sector remains stable.

"I sign this bill today in full recognition of the critical role that [the asset management corporation] will play in achieving these two critical objectives for our economy," he added. The move may help boost Standard & Poor's rating of Nigerian banks, as the firm's John Gibling told Reuters last month they are still considered to be at risk despite the bailout. Last year the Central Bank of Nigeria bailed out nine financial institutions, providing $4 billion (€3 billion) to ensure they could continue lending.