Nigeria’s banks lent recklessly — then the central bank fired all the CEOs

Nigeria’s banking sector had grown rapidly in the 2000s, following a 2005 consolidation that reduced 89 banks to 25 and created a class of powerful bank CEOs. The banks aggressively lent against the booming Nigerian stock market, using depositors’ funds to finance margin loans and speculating in equities.

When the 2008 global financial crisis hit, the Nigerian stock market collapsed by nearly 70%. Banks were left with massive non-performing loans as margin calls went unpaid. In August 2009, newly appointed Central Bank Governor Sanusi Lamido Sanusi conducted an audit that revealed the banks were technically insolvent. He fired five bank CEOs — including the powerful Cecilia Ibru of Oceanic Bank — and charged them with criminal mismanagement.

The central bank injected over ₦600 billion ($4 billion) into the affected banks to prevent a systemic collapse. The Asset Management Corporation of Nigeria (AMCON) was created to acquire bad loans. Two bank CEOs were imprisoned. The “Sanusi Tsunami” became a defining moment in Nigerian financial history, but the cost of the bailout was borne by taxpayers, and the episode exposed how deeply the banking sector had been looted by its own executives.