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CBN’s $7.5 billion loans from US lenders mar Nigeria’s credit rating

Published

3 years ago

August 14, 2023

The Central Bank of Nigeria (CBN)’s security borrowing from JP Morgan and Goldman Sachs could set Nigeria’s credit rating on a free fall to junk amid efforts to reposition the economy.

The apex bank, in its newly released 2022 financials, reported borrowing $7.5 billion from U.S banks JP Morgan and Goldman Sachs by pledging securities.

Analysts say that the loan deal, which the central bank said was contracted “in exchange for its securities to be held for collateral”, may impair the nation’s fragile fiscal position and credit rating.

The CBN also disclosed that it entered into 30-day forward contracts totalling 3.15 trillion naira in 2022 with undisclosed counterparties.

Sylvester Anaba, an analyst at a Lagos investment house, said there won’t be severe consequences as much as CBN can pay back its debt to these foreign creditors.

“But if they default, then investors will begin to dump our bond. It will also impact our credit rating,” he said.

“Recently, they brought up some ratings and Nigeria was maintained at B-, about six notches down to junk rating. It means by the time CBN defaults; there is nothing that will save us from entering junk.”

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The apex bank disclosure on borrowings of $7 billion and $500 million, respectively, from JP Morgan and Goldman Sachs leaves fragile investor confidence in Nigeria in danger of fresh harm after President Bola Tinubu’s host of currency reforms and termination of a regime of costly fuel subsidies that are already winning international investors back.

Rating agency Fitch last November downgraded Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B-’ from ‘B’, citing “deterioration in Nigeria’s government debt servicing costs and external liquidity despite high oil prices.”

Moody’s earlier verdict

A verdict by New York-based Moody’s Investors Service early this year similarly cut Nigeria’s ratings to non-investment grade in danger to its prospects of sourcing debt from the international capital market.

The then Minister of Finance, Zainab Ahmed, rejected Moody’s position.

“But these are external rating agencies that don’t have the full understanding of what is happening in our domestic environment,” she said in a retort.

S&P Global Ratings

Against the backdrop of recent reforms, S&P Global Ratings earlier in August revised its outlook on Nigeria to stable from negative.

“Nigeria’s newly elected government has moved quickly to implement a series of fiscal and monetary reforms, which we believe will gradually benefit public finances and the balance of payments,” the rating agency said in a statement.

Analysts are worried that the various revelations from the newly released CBN financial reports may reverse the gains of recent months.

An exposure that high without documentation in the country’s public debt books is an early setback to recent measures like the unification of Nigeria’s multiple exchange rates, aimed at stabilising the naira.

Nigeria’s dollar bond due in 2030 sank 2.295 cents to its lowest level in the past one month on Friday at 83.221 cents as a crisis of confidence in the economy heightened among investors.

“We are currently grappling with a confidence crisis in the forex market. This may further worsen the confidence problem. It could aggravate speculative activities,” said Muda Yusuf, the chief executive of the Centre for the Promotion of Private Enterprise.

“Rating agencies are going to begin to revise our ratings. You know what that will do to our reputation as a country,” Dr Yusuf further said.

More Irregularities

CBN books for 2022 showed that $3.2 billion is owed to an unnamed party as foreign currency forward contract payables—no notes providing clarity on the transaction accompanying that item.

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“Since the loans from JP Morgan and Goldman Sachs etc., are collateralised with Nigeria’s foreign assets (securities), then the current gross external reserves of about $30 billion becomes $16.3 billion net,” a prominent economist who sought anonymity told PREMIUM TIMES.

“If the other outstanding obligations are included, CBN is technically insolvent,” he added, noting that the exchange rate is likely to depreciate further.

The analyst remarked that the low levels of the real reserves has encumbered the apex bank’s intervention in the currency market.

The current state of the reserves means investors will rather accept the exchange rate as it is at the moment on the knowledge that the reserves could run dry soon.

“The rush to the exit door will create an fx market stampede,” the analyst said.

The decision of international investors in 2021 to quit the open market operation (OMO) bills denominated in dollars was set to strain the reserves with foreign investment in the bills already at $17 billion a year earlier.

According to the analyst, “it was at this point that CBN took collateralised loans from these banks.”

The immediate past president, the CBN board and the National Assembly failed to bring Godwin Emefiele, the apex bank’s governor, to book in a mark of failure of oversight, making them culpable, he added.

“While they do not have to approve CBN transactions, they did not sanction the Governor for not publishing and gazetting Annual Reports, which would have exposed the scam.

“The entities that lent money to CBN have violated an important international norm: If the law of a country requires published audited accounts, they broke the law by lending to an entity that did not meet the law,” the analyst affirmed.

“The IMF should be asked questions: CBN was given IMF advances in 2020, what Annual Report formed the basis? What safeguards took place before the money was advanced? “Why has IMF Annual Reports since 2016 not pointed out these issues? Can IMF be relied upon as a credible and impartial organisation?” he said.

Opacity

Last year, Premium Times raised concerns over the failure of the apex bank to publish its financial reportsin gross contravention of extant laws.

For years, the Central Bank of Nigeria (CBN) repeatedly failed to release its annual reports showing details of its operations and financial obligations.

Since 2005 when it started publishing details of its annual report on its website, the CBN never failed to publish the report until it stopped the publication of the crucial documents shortly after the Muhammadu Buhari government came to power.

According to the CBN Act 2007, the apex bank is expected to publish its report within two months after the end of each financial year.

“The Bank shall, within two months after the close of each financial year, transmit to the National Assembly and the President a copy of its annual accounts certified by the Auditor,” the CBN Act reads in part.

“A report required to be submitted to the National Assembly and the President shall be published by the Bank in such manner as the Governor may direct.

“The Board shall ensure that accounts submitted pursuant to this section shall, as soon as possible be published in the Gazette.

“The Bank shall, as soon as may be practicable after the last day of each month makeup end, publish a return of its assets and liabilities as at the close of business on that day, or if that day is a holiday, as at the close of business on the last preceding business day,” the Act reads.

Analysts said the failure of the CBN to publish the report sent wrong signals to investors and others interested in understanding the state of the economy and concealed Nigeria’s fiscal problems for far too long. (Premium Times)

Related Topics:CBN Featured loan US lenders

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MTN Nigeria Suspends Airtime Loan Service

Published

1 day ago

April 17, 2026

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MTN Nigeria Suspends Airtime Loan Service

MTN Nigeria Communications PLC has temporarily suspended its airtime and data credit service, Xtratime, following new regulatory requirements governing digital consumer lending services in Nigeria.

The company disclosed the development in a corporate filing to the Nigerian Exchange Limited (NGX) on Thursday, stating that the suspension was necessary to comply with the 2025 Digital, Electronic, Online and Non-Traditional Consumer Lending Regulations issued by the Federal Competition and Consumer Protection Commission (FCCPC).

According to MTN, the Xtratime service—which allows prepaid subscribers to borrow airtime or data and repay on their next recharge—falls under the expanded scope of the new regulatory framework and now requires additional compliance and licensing processes before it can resume.

In the regulatory notice signed by Company Secretary Uto Ukpanah, MTN said:
“MTN Nigeria Communications PLC hereby notifies the Nigerian Exchange Limited and the investing public that the company has temporarily suspended its airtime and data credit advance service (‘Xtratime’).”

The telecom operator added that the suspension is tied to ongoing implementation of the FCCPC’s updated rules, which introduce stricter compliance, registration, and licensing obligations for all providers of digital or non-traditional credit services.

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MTN stressed that despite the suspension, customers can still purchase airtime and data through other available channels, including banking platforms, USSD services, and mobile apps, assuring that the decision is not expected to significantly affect earnings.

“Given the scale within the revenue mix, we do not expect the temporary suspension to have a material impact,” the company said, adding that updates would be provided in its Q1 2026 financial report.

The development highlights the widening reach of Nigeria’s consumer credit regulations, which now extend beyond banks and fintech loan apps to include telecommunications companies offering airtime advances.

The FCCPC had earlier introduced a framework for digital lending in 2022 but strengthened enforcement with the 2025 regulations, requiring all operators in the sector to register and obtain approval before continuing operations.

Under the new rules, companies offering short-term digital credit services must meet stricter standards on consumer protection, transparency, data governance, and ethical debt recovery practices. The commission has reportedly set an April 2026 deadline for full compliance by existing operators.

Industry analysts say the move reflects a broader effort by regulators to bring order to Nigeria’s fast-growing digital credit ecosystem, where airtime loans have become a key financial support tool for millions of low-income mobile users.

For now, MTN has not announced a timeline for restoring the Xtratime service, stating only that it will resume once full regulatory compliance is achieved.

MTN Nigeria Suspends Airtime Loan Service

Business

Dangote Named Only Nigerian on TIME100 2026 Global Influence Ranking

Published

2 days ago

April 16, 2026

Trends Admin

Africa’s richest businessman, Aliko Dangote

Alhaji Aliko Dangote, the CEO of Dangote Group

Dangote Named Only Nigerian on TIME100 2026 Global Influence Ranking

Nigerian business magnate Aliko Dangote has been named among the TIME100 Most Influential People in the World for 2026, as TIME Magazine released its latest list recognising individuals shaping global politics, business, technology, and culture.

Dangote, Africa’s richest man and founder of the Dangote Group, is the only Nigerian featured in the 2026 edition. He appears in the Titans category, recognised for his decades-long push to industrialise Africa through investments in cement, sugar, fertiliser, and the landmark Dangote Refinery—one of the largest single-train refineries in the world.

This marks Dangote’s second appearance on the TIME100 list, following his first inclusion in 2014, further cementing his status as one of Africa’s most globally recognised industrialists.

A key highlight of this year’s recognition is the tribute written by fellow Nigerian billionaire Tony Elumelu, who praised Dangote’s entrepreneurial journey and continental impact. Elumelu described him as “indefatigable, resilient, and foresighted,” and lauded him as “one of the greatest African entrepreneurs of our time.”

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He added that Dangote’s work demonstrates that Africans can create large-scale value “with our own resources, on our continent,” reinforcing the philosophy of economic self-reliance that has shaped both businessmen’s careers.

Interestingly, the gesture reflects a role reversal from previous years, as Dangote once wrote Elumelu’s TIME100 tribute when the UBA chairman appeared on the list in 2020.

The 2026 TIME100 list, now in its 23rd edition, features global figures across multiple categories, including Titans, Leaders, Innovators, Icons, Artists, and Pioneers. High-profile names this year include U.S. President Donald Trump, Chinese President Xi Jinping, and major technology leaders such as Google CEO Sundar Pichai and YouTube CEO Neal Mohan.

Other political figures featured include Israeli Prime Minister Benjamin Netanyahu and Canadian Prime Minister Mark Carney, alongside global leaders in health, finance, and multilateral institutions.

Analysts say Dangote’s inclusion carries strong symbolic significance for Africa, particularly at a time of economic restructuring and renewed calls for industrialisation and self-sufficiency across the continent. His multi-billion-dollar refinery project, in particular, is seen as a strategic asset aimed at reducing Nigeria’s reliance on imported refined petroleum products, boosting local production, and creating thousands of jobs.

The recognition also reinforces Dangote’s global reputation as a leading figure in African entrepreneurship, with his business empire spanning critical sectors of the economy and influencing industrial policy conversations across the region.

The TIME100 announcement precedes the annual TIME100 Summit scheduled for April 22 in New York, where selected honourees are expected to participate in discussions on global leadership and innovation.

The full list and tributes are available via TIME Magazine’s official platforms.

Dangote Named Only Nigerian on TIME100 2026 Global Influence Ranking

Business

Experts Reject World Bank Fuel Import Advice, Warn of Economic Setback for Nigeria

Published

4 days ago

April 14, 2026

Trends Admin

Experts Reject World Bank Fuel Import Advice, Warn of Economic Setback for Nigeria

Energy experts have strongly criticised recent recommendations attributed to the World Bank urging Nigeria to deepen fuel importation and further liberalise its downstream petroleum sector, warning that the proposal is economically risky, poorly timed, and inconsistent with Nigeria’s petroleum law.

The criticism comes amid growing debate over the findings of the World Bank’s latest Nigeria Development Update, which some stakeholders say suggests a return to higher fuel import dependence as part of broader market reforms aimed at stabilising prices and improving efficiency.

However, energy economist Prof. Ken Ife faulted the recommendation, arguing that it contradicts Nigeria’s long-term goal of energy self-sufficiency and undermines ongoing investments in domestic refining capacity.

“You cannot advise a country struggling to achieve economic self-reliance to return to fuel importation,” Ife said, warning that such a policy shift would reverse gains made under the Petroleum Industry framework.

He stressed that the proposal runs counter to the provisions of the Petroleum Industry Act, particularly the Domestic Crude Supply Obligation, which prioritises crude allocation to local refineries to support domestic production.

According to him, abandoning this structure would weaken Nigeria’s refining ambitions, increase exposure to global oil shocks, and worsen pressure on foreign exchange reserves.

“We are building capacity that could exceed domestic demand. Reversing course now would discourage investors and destabilise the downstream sector,” he added.

Ife further questioned the empirical basis of the recommendation, describing it as inconsistent with the broader analytical strength of the World Bank report.

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Other energy analysts echoed similar concerns, arguing that Nigeria is already at a critical stage of expanding domestic refining, including private-sector-led investments that are expected to reduce dependence on imported petrol in the coming years.

Energy analyst Kelvin Emmanuel also criticised the proposal, insisting that it is disconnected from current global pricing realities and supply chain risks.

He argued that landing imported petrol in Nigeria is already significantly expensive when freight, insurance, and exchange rate factors are considered, making large-scale import reliance economically unsustainable.

Emmanuel further noted that rising crude oil prices—driven partly by geopolitical tensions in the Middle East—have pushed global energy markets into volatility, reinforcing the need for domestic refining resilience rather than import dependence.

He also disputed claims that imported fuel could be cheaper than locally refined products, arguing that such assumptions ignore structural cost realities in the global supply chain.

On inflation and fuel pricing, Emmanuel maintained that Nigeria’s challenges are linked more to policy implementation gaps than production shortages, particularly in crude allocation to local refineries as outlined in the Petroleum Industry Act.

“If domestic supply obligations are properly enforced, price stability will improve and market volatility will reduce,” he said.

He also criticised proposals suggesting that Nigeria should expand social safety nets through borrowing, arguing that such measures could worsen fiscal pressure and contradict responsible debt management principles.

While acknowledging that social protection is important, he insisted that funding should prioritise grants or targeted revenue sources rather than additional debt obligations.

The debate highlights growing tension between international policy advice and Nigeria’s domestic energy strategy at a time when the country is attempting to stabilise fuel supply, reduce import dependence, and strengthen local refining capacity.

Industry observers say the outcome of this policy direction could significantly shape Nigeria’s downstream petroleum sector, foreign exchange stability, and long-term energy security.