Nigerian banks name clients with suspicious dollar deals

Bloomberg

Nigerian lenders have started exposing names of customers allegedly obtaining dollars by false pretense, to later trade them at a profit in the parallel market.
Some customers have been found to be taking advantage of a lucrative 37% differential between the official and black market exchange rates by obtaining the greenback at the official rate of about 416 naira per dollar, only to subsequently sell in the unauthorized market at a more expensive average rate of about 570 naira per dollar. These customers are able to beat regulations by presenting false travel documents.
Zenith Bank Plc, the nation’s biggest lender by market value, has published 987 names of customers engaging in the illegal practice on its website while Fidelity Bank Plc, a mid-tier lender published 83 names. United Bank for Africa Plc, First City Monument Bank Plc and Wema Bank have also published names of defaulting customers on their websites.
The publication follows a directive from Nigerian central bank to identify such customers and ensure they refund the hard currency. The regulator first alerted banks of the ongoing practice last year.
Africa’s biggest crude producer started rationing dollar supply in 2020 due to lower oil income that accounts for about 90% of foreign-exchange earnings. It has been forced to devalue the local currency three time in the last two years and still has a backlog of about $1.7 billion in unmet dollar demand from investors, according to the International Monetary Fund.
Measures announced by the central bank to curb dollar shortage are not yet yielding the desired results, according to the Manufacturers Association of Nigeria.
Exposing customers by publishing their names could dissuade them and others from the fraudulent act, especially if they were corporates, Oluwasegun Akinwale, an analyst at Coronation Asset Management in Lagos, said by phone.