E-Financial
CBN’s N2.9Trillion Intervention Saves Banks, Power Sector from Collapse- Report
The lifeline by the Central Bank of Nigeria (CBN) through various intervention funds may have saved Deposit Money Banks(DMBs) and the power sector from imminent collapse, according to the Sun.
Some industry observers insisted that the backing of Deposit Money Banks (DMBs) by the CBN in the take over of some Distribution Companies(Discos) and the roles being played by the apex bank to ensure their shares are successful transferred to new investors remained a leeway for the financial and power sectors.
Without the action, most of the stakeholders submitted that collapse of some banks as well as massive job losses would have remained inevitable.
The experts, who also noted that the apex bank’s backing of the takeover saved the country from economic catastrophe, noting that recovering government loans as well as that of commercial banks remained critical for the nation’s financial sector even as government intervention in the sector now stands at N2.9 trillion.
A power sector analyst, Adetayo Adegbemle, noted that the CBN role in protecting the collapse of the bank from power sector loan remained sacrosanct, adding that the indebtedness of the power sector to the bank would have led to the collapse of banks.
“I love the fact that CBN came into the power sector, not just to save the power sector. Don’t forget that, even though they have roles to play in the sector but they came in to save their own banking sector.
“The loans that the power sector took from the banks have become bad and if you do not do anything it is going to be on the books of the banks. So CBN backing the banks to take-over the shares is a good thing for CBN,” he said
Energy lawyer, Madaki Ameh, had stated that there was need for the total overhaul of the sector, insisting that the overhaul is long overdue and the takeover of the DisCos remained legally justified under the terms of the agreement, which brought them into the Nigerian Electricity Supply Industry (NESI).
He said the DisCos have not met any of the minimum thresholds set for them by government since privatisation despite the huge investment the government has continued to make in the sector.
“If you compare happenings in the power sector with the telecoms sector, you will see clearly that there were structural defects with the implementation of the privatisation policy in the power sector and that nothing short of a total take over of the DisCos and some of the non-performing GenCos would deliver the sort of efficiency required to transform the Sector in Nigeria,” Ameh said.
Backed by the apex bank, DMBs had taken over five DisCos amidst poor performance and inability to pay back loans, a development which is already putting some banks on the edge of collapse.
With indications that the government’s intervention fund to the power sector now hover around N2.9 trillion since the sector was privatized in 2013, stakeholders insisted that the total collapse of the power sector would have had serious implications, not only for the banks but the entire economy.
In what has been described as poor financial performance, Abuja DisCo, Ibadan DisCo, Kano DisSo, Kaduna DisCo and the Benin Electricity Distribution Companies (BEDC) have been at loggerhead with the banks in a move backed by the CBN, Nigerian Electricity Regulatory Commission (NERC) and Bureau of Public Enterprises (BPE).
Coming amidst a fresh $500 million loan by CBN to improve the capacity of the distribution companies, the development is happening at a time of global energy crisis where diesel now hovering around N850 per litre, as government spend heavily to subside Premium Motor Spirit (PMS).
A report by CSL Stockbrokers Limited, (CSLS) titled; “The continued rise of bank loans to power sector”, had last week stated that the power sector owed N836.08 billion to Deposit Money Banks (DMBs).
The payback loans notwithstanding, the DisCos are indebted heavily despite huge stimuli from the Federal Government and interventions from the Central Bank of Nigeria (CBN).
Prior to takeover, CBN had directed the Deposit Money Banks to take charge of the collection of electricity bill payments as a circular signed by Hassan Bello, director of banking supervision had linked the move to the recommendation of the Power Sector Coordination Working Group to improve payment discipline in the Nigerian Electricity Supply Industry (NESI).
BPE had disclosed last week that it is working with CBN to ensure that banks, which took over the DisCos exit in six-month as the Director-General of the BPE, Alex Okoh said the banks were not expected to hold the shares in perpetually.
“In fact, in conjunction with the CBN, we have given them a deadline of six months within which to sell those shares to credible operators approved by the BPE and NERC and should they not be able to meet that deadline, they can be given a maximum extension of another six months. So in one-year maximum, they should be out of the DISCOs.”
Recall that the Distribution Companies (DisCos) are responsible for the sector’s revenue collection. While there was clamour for an increase in tariff, the sector’s inability to improve on the collection and reduce losses, a basic part of DisCos Key Performance Indicators, as well as inability to make remittance to the Bulk Electricity Trading Company remained serious concern for the sector.
President of the Nigerian Consumer Protection Network, Kunle Olubiyo said the takeover has helped in averting massive job losses and prevented imminent collapsed of the banking Industry due to toxic loans.
According to him, those who were the pioneer investors in the DisCos are Nigerian, who meant well but lack the requisite technical requirements of the original financial bidding benchmarks and technical bidding benchmarks as originally set out as thresholds for financial diligence as well as the technical due diligence .
“What is most important is our ability as a nation to rally round indigenous investors with the rightfinancial muscles, who in turn can put together an assemblage of individuals professionals with collective cognate experiences of working in the business of management of power generation, transmission and distribution value chain to apply and take over. I am quite sure that in the next one, the present crop of receivers managers would have learnt a lot from the multifaceted sector wide learning curves,” he said.
Partner, Nextier Power, Emeka Okpukpara, had earlier noted that the initiatives by the apex bank is reducing financial liquidity in the sector, and introduced transparency, which enabled players in the sector to have access to information.
According to him, aside from offering visibility to the sector’s finance, the efforts ensured payment of debts as first-line charges.
Okpukpara said: “The financial discipline allows visibility of what DisCos are collecting. It allows debts such as generation, services, and other charges to be settled first before operating expenses.
“Transparency, in most cases, increases trust in a system. Therefore, I would recommend that the collection figures are made public since DisCos are custodians of market funds, rather than the owners.”
While electricity consumers pay for the inefficiencies of the sector under a Service Based Tariff arrangement, stakeholders are miffed that the current takeover by the banks remained pointer to poor corporate governance, technical and commercial losses as well as the dismal technical regulations in the power sector.
Recall that none of the DisCos, except Eko is currently able to meet minimum remittance order set by NERC, none of them has declared profit for eight years, none of them have also met the Key Performance Indicators (KPIs) set by the sector, leaving consumers to pay for minor repairs and maintenance due to the country’s energy situation.
Bank Customers Association of Nigeria (BCAN) has written to the Central Bank of Nigeria (CBN) seeking urgent intervention over what it describes as persistent and unauthorized charges being deducted from customer accounts across the country.
This was revealed by Uju Ogubunka, president, BCAN, during the 2025 Artificial Intelligence Conference hosted by SuperNews in Lagos.
Themed “Power of AI: Enhancing Efficiency and Customer Satisfaction for Better Financial Services Experience”, the event brought together stakeholders in the banking and fintech sectors.
Ogubunka expressed concern that many of the charges deducted from customer accounts particularly under the end-user billing model for Unstructured Supplementary Service Data (USSD) do not fall within the framework of fees approved by the CBN.
“On the issue of excess charges, we have formally written to the Central Bank of Nigeria seeking a permanent solution. If that doesn’t happen soon, Nigerian bank customers may have no option but to publicly demand accountability,” he warned.
The BCAN President painted a grim picture of banking satisfaction levels in the country, arguing that many customers remain deeply frustrated by poor service delivery, even as banks boast of adopting digital and AI-driven tools.
“Let’s be honest customer satisfaction in Nigeria’s banking sector today is practically non-existent. The number of complaints, petitions, and legal disputes being filed daily at the Bankers’ House, CBN, NDIC, and mediation centres tells the real story,” Ogubunka said.
He noted that if artificial intelligence had truly taken root within financial services as advertised, many of the recurring issues such as transaction failures, poor response times, and vague charges would already be resolved.
Johnson Chukwu, the conference keynote speaker and a respected financial expert, spotlighted the immense potential AI holds for transforming Nigeria’s financial landscape especially in areas like consumer lending, customer experience, and fraud detection.
Chukwu said AI now enables instant consumer credit scoring, making it possible for financial institutions to offer small personal loans with minimal human involvement.
“Today, consumer credit is expanding because AI tools can assess your income and spending habits. Telcos know your payment patterns, your locations, even where you smoked last night. That data enables quick credit decisions you apply, and within minutes, the loan is disbursed,” he explained.
Chukwu also emphasized how AI can drive hyper-personalisation in service delivery.
“With AI, one million customers can be treated as one million unique individuals. The system recognises your face, fingerprint, and transaction behaviour. It tailors services that suit your lifestyle and financial goals.”
He added that the technology can also drastically reduce the time it takes to resolve complaints, citing AI’s ability to mine customer data and instantly identify root causes.
Chukwu concluded his remarks with a framework for AI adoption in financial services, listing seven essential “C’s”: Capacity, Capability, Collaboration, Creativity, Cognition, Continuity, and Control.
“Artificial Intelligence will shape the future of customer experience and service delivery. Financial institutions that fail to embrace it risk becoming irrelevant. The time to act is now,” he said.
By Austin Kwesi Okere
On June 4, 2025, Bloomberg.com drew global attention with the headline: “World-Beating Cedi Slows Ghana Inflation to Three-Year Low.” Defying expectations, the cedi has appreciated over 42% against the U.S. dollar since January, making it the world’s best-performing currency this year. This rally has not only boosted investor confidence but also helped reduce inflation and restore economic momentum.
What’s Driving the Rally and Can It Be Sustained?
Early signs suggest the rally is rooted in more than market forces. Under President John Dramani Mahama, Ghana appears to be undergoing a significant shift in governance, with an emphasis on real economic growth and social development rather than short-term optics.
At the heart of this shift is Mahama’s eight-pillar economic strategy, which includes:
- Completing the IMF program with fiscal discipline,
- Reopening capital markets,
- Strengthening sovereign wealth and local government financing,
- Clearing arrears and improving public investment,
- Reforming public financial management,
- Boosting exports via the Ghana Exim Bank,
- Positioning Ghana as a regional trade hub, and
- Reviving infrastructure development.
These efforts are beginning to pay off. Ghana has indicated it will exit the IMF program as scheduled in May 2026. At a press briefing in Washington, IMF Communications Director Julie Kozack noted that Ghana had achieved its debt-to-GDP target of 55% three years early and surpassed its international reserves goal, reaching GH¢10.6 billion by April 2025. The cedi’s strength has also helped slash Ghana’s debt stock by about GH¢150 billion.
President Mahama, speaking to the Ghana National Association of Teachers, reaffirmed his focus on stability and inclusive prosperity. GDP growth reached 5.4% in the first quarter, reinforcing the view that the economy is back on a growth path.
Monetary Policy and Inflation Management
The Bank of Ghana has played a key role in managing inflation and currency stability. In March, it raised the benchmark interest rate by 100 basis points to 28%, a reduction from its 30% peak in 2023. From January to April 2025, it absorbed GH¢79.8 billion in liquidity – up 76.6% from the same period the previous year, demonstrating its commitment to macroeconomic stability.
These measures have had visible results: inflation fell to 18.4% in May, its lowest level in three years, down from 21.2% in April.
Everyday Impact: The Cedi’s Gains in Real Terms
The appreciation of the cedi is beginning to improve everyday life for Ghanaians. Industrial importers, for instance, are now able to buy machinery at significantly lower prices. One contractor, who paid GHS25,000 for a block molding machine last year, paid just GHS13,000 for the same model in June—a 48% price drop.
Fuel prices have dropped by about 15%, with some Oil Marketing Companies (OMCs) selling petrol for under GH¢12 per litre. This has led to a 15% reduction in transport fares, as announced by the Road Transport Operators Association in May.
Food and commodity prices are also falling.
The Food and Beverage Association of Ghana reports that the price of a bag of “Dubai” rice has dropped from GH¢460 to GH¢370, and a 50kg bag of imported rice that once sold for GH¢950 is now GH¢750. Cooking oil has fallen from GH¢1,000 to GH¢680 per gallon, and cement prices from GH¢120 to GH¢82 per bag.
In short, the stronger cedi is improving purchasing power, easing cost pressures, and lowering the cost of doing business.
What’s the Ideal Currency Level?
Despite the positive momentum, policymakers stress the need for balance. President John Dramani Mahama has underscored the importance of balance, cautioning that an overly strong cedi could harm exports. He suggests an optimal exchange rate range of 10 to 12 cedis per U.S. dollar – a level that supports both importers and exporters while preserving competitiveness.
Beyond interest rate adjustments, the sustained performance of the currency depends on broader structural and governance-related factors.
Three critical elements driving the cedi’s performance include:
- A government focused on real, inclusive growth;
- Reforms grounded in substance, not optics;
- Trustworthy, transparent governance.
This combination fosters domestic investment, reduces capital flight, and boosts economic confidence, setting off a cycle of growth and social cohesion.
Is the Cedi’s Rise a Temporary Spike or a Structural Shift?
Some analysts argue that Ghana’s currency rally reflects deeper structural improvements rather than a short-lived spike. Prof. Eric Oteng-Abayie of the Kwame Nkrumah University of Science and Technology points to several domestic drivers behind the rally.
The Bank of Ghana’s Gold4Oil and GoldBod programs have increased Ghana’s gold reserves by 40.6% between May 2024 and April 2025. A requirement that 20% of gold export proceeds be converted to cedis before accessing dollars has stabilized forex supply and bolstered reserves.
Meanwhile, the removal of distortionary taxes such as the E-levy and the planned phase-out of the COVID-19 levy, combined with prudent public spending, have strengthened fiscal credibility.
Ghana’s debt restructuring has also offered relief. With the next major external repayment not due until July 2025, foreign exchange pressure has eased. Complementing this, the central bank injected $490 million into the forex market in April 2025 to support the cedi.
External Factors Working in Ghana’s Favor
Global trends have also benefited Ghana. The U.S. dollar has weakened—dropping 10% on the DXY index—amid global trade tensions and fears of a slowdown. This shift has favored emerging market currencies like the cedi.
Record-high prices for Ghana’s key exports – gold at $3,400 per ounce and cocoa at $10,000 per ton – have significantly boosted foreign exchange inflows. The formalization of small-scale mining has further increased legal gold exports, strengthening Ghana’s external position.
Relations with Commercial Creditors Normalised:
Fitch Ratings has upgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B-‘ from ‘Restricted Default’ (RD), with Stable Outlook.
This was announced on their website on June 16, 2025. The upgrade of Ghana’s Long-Term Foreign-Currency IDR to ‘B-‘ from ‘RD’ reflects Fitch’s assessment that Ghana has normalised relations with a significant majority of external commercial creditors.
Ghana restructured its USD13.1 billon Eurobonds in October 2024. About USD2.6 billion of non-performing external debt still needs to be restructured. Of this, Fitch considers USD700 million to be commercial debt, representing 5% of total external commercial debt initially included in the restructuring perimeter. According to Fitch, “Ghana is negotiating with these outstanding commercial creditors, and we assess holdout risks as small.”
Can Ghana Sustain the Momentum?
While the outlook appears promising, the sustainability of this recovery will depend on disciplined policymaking, focused execution and the ability to maintain public trust. The early signs are encouraging, but in my view, “the jury is still out.”
Ghana’s case may well become a model for how transparent governance, strategic reforms, and global tailwinds can come together to drive economic revival – if the momentum can be maintained.
Austin Kwesi Okere is the Founder of CWG Plc and the Ausso Leadership Academy. In recognition of his contributions to business education and knowledge transfer across the continent, Austin was appointed to the Advisory Board of the Global Business School Network.
First Bank HoldCo Plc has disclosed that it spent over ₦15 billion to protect its banking systems from cyberattacks between January and June this year, as digital threats to financial institutions continue to rise across Nigeria.
Mr. Olusegun Alebiosu, CEO, First Bank
Mr. Olusegun Alebiosu, chief executive officer of the bank, revealed this on Wednesday while speaking on the sidelines of a two-day National Seminar on Banking and Allied Matters for Judges, held in Abuja.
Alebiosu said the bank invested ₦3 billion in cybersecurity measures in June alone, part of a broader commitment to safeguarding customer assets and maintaining trust in Nigeria’s banking system.
The News Agency of Nigeria reports that the CEO said the bank had the most robust cybersecurity framework in the country, which justified the substantial investment.
Speaking on the rising wave of cyberattacks targeting banking systems, Alebiosu assured First Bank customers that their funds remained secure.
He also expressed concern over the growing involvement of some Nigerians in cybercrime, stressing the urgent need for the country to tackle the menace decisively.
He said, “No customer would lose their money in First Bank unjustly. If their money is missing from First Bank, First Bank will pay it back. Before I joined First Bank, I had an account with First Bank. One of the reasons why I had an account with First Bank was that I said to myself, if my money is missing, it is the only bank I know I will collect my money back without any excuses.”
Responding to customers’ complaints about delays in addressing cases of fraudulent transactions, Alebiosu explained that the bank must carry out thorough investigations involving multiple stakeholders.
He said the delays often stem from the need for collaboration between security agencies and the recipient banks to ascertain the facts surrounding each case thoroughly.
Alebiosu also advised customers to be cautious when handling and sharing their financial information.
“Customers themselves, most times, also compromise their own security details; I have seen a lot of people that give their cards to somebody to help them withdraw money from their ATM. They compromised their password, so when something happens and you say, my money disappeared, you forget the day you gave your card to someone else and they can use that to transfer your money,” he said.
“Some people even compromise their own ID on the system carelessly; some give their Bank Verification Number (BVN), and they use it against them.”
“Now, why does it take time for the bank to react? everything you give to the bank, the bank has to investigate it. The money might have gone to other banks, so you start tracking from other banks, but sometimes customers are impatient,” he said.
Regarding alleged fraud committed by staff, he stated that the bank uses internal employee fraud detection software to monitor staff activities on its systems.
He added. “If you knew how many of our staff we sack on a monthly basis, you wouldn’t believe it. So if there are triggers, people will be involved. It is for us to run faster than them and see how we can help to stop these kinds of things in our system but wherever we see it, we deal with it decisively.”
He stated that curbing cybercrimes requires the active involvement of various stakeholders, including banks, law enforcement agencies, and the judiciary.
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