ANNOUNCEMENT 14 Aug 2009In August 2009, the government of Nigeria announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
Central Bank of Nigeria. 2009. "Address by the governor of the central bank of Nigeria, Mallam Sanusi Lamido Sanusi on developments in the banking system in Nigeria." http://126.96.36.199/Out/speeches/2009/Govadd-14-8-09.pdf
Central Bank of Nigeria. Public Statement- 18/08/2009. http://188.8.131.52/out/publications/pressRelease/GOV/2009/PUBLIC_STATEMENT_18082009.pdf
Omoh, G and B. Komolafe. 2009. "CBN sacks 5 banks' CEOs, appoints acting MD/CEOs. "http://www.vanguardngr.com/2009/08/14/cbn-sacks-5-banks-directors/
Our Reporters. "Nigeria: Bailout may hit N1 Trillion." may hit http://allafrica.com/stories/200908180001.html
Reuters Africa. 2009. "Update 1: Nigerian cbank guarantees foreign loans after bailout." http://af.reuters.com/article/nigeriaNews/idAFLI28815620090818
The Central Bank of Nigeria on 14 August 2009 announced a 400 billion naira (USD 2'560'000'000) bail out for 5 banks after sacking the CEOs and executive directors of the banks on 14 August 2009. The beneficiary banks of this bailout are the Oceanic Bank, Intercontinental Bank, Finbank, Union Bank and Afribank. Acting CEO's were immediately appointed and the Central Bank has guaranteed foreign loans and corresponding banking lines.
The primary grounds for the bailout is the financial instability of the banks that was primarily caused by the poor management practices of the CEOs and the rest of their management team. The banks are said to have accumulated bad debts of US$7.6 billion (1.14 trillion nairas). The excessively high level of non-performing loans was attributed to poor corporate governance practices, lack of adequate credit administration and absence or non-adherence to credit risk management practices. The five banks account for 40% of credit segment of the banking industry of Nigeria.
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.