Money lost to fraud in Nigeria’s banking system has nearly tripled over the past five years, according to an analysis released by the Nigeria Inter-Bank Settlement System (NIBSS).
NIBSS estimated that N52.3 billion was lost to fraud in 2024, compared to 11.6 billion in 2020.
The report also indicated that fraudsters illegally attempted to obtain N86.4 billion in 2024.
These figures were reported shortly after the latest GDP statistics showed a fourth-quarter growth of 3.8 per cent, the highest rate in three years, primarily fueled by the services sector, which includes finance and insurance.
Nigeria’s digital payments system is considered one of the strongest in Africa, and tech startups in the nation secured approximately $400 million in funding in 2024.
Such financial services have gained greater significance recently due to a cash shortage and currency reforms, which have driven more users to abandon physical banknotes.
“The amount lost to fraud has increased over the past five years along with the growth of financial transactions in the digital payments sector,” NIBSS said.
Reports indicated that fraudsters are employing various tactics, including the conversion of funds into gift cards and the establishment of accounts using the stolen identities of elderly individuals, minors, and foreigners.
The report suggested that N400 million had been deposited into accounts created with the stolen identities of senior citizens.
NIBSS noted that some funds have been retrieved, and bank employees involved in the fraud are under investigation.
Nigeria is classified as a “grey list country” by international watchdogs, alongside nations such as South Sudan, Bulgaria, Monaco, and Croatia, due to weaknesses in its measures against money laundering and financing terrorism.
Economic and Financial Crimes Commission (EFCC) has also apprehended multiple foreigners concerning internet fraud. In December, the agency took into custody 792 suspects in the upscale Victoria Island region of Nigeria’s central city, Lagos.
According to the agency, at least 192 suspects were identified as foreign nationals, with 148 being Chinese.
Dele Oyewale, spokesman, EFCC, said in a press release that foreign criminal organizations recruit Nigerian partners to target victims online through phishing schemes, primarily focusing on individuals in the United States, Canada, Mexico, and various European nations.