Business
EFCC Recovers N13bn Illegal Fuel Subsidy Payments
The Economic and Financial Crimes Commission (EFCC) recovered about N13 billion as proceeds from illegal payments made under the subsidy regime between 2017 and 2021, The Tide source stated.
According to the source,this was based on the National inherent risk assessment of money laundering and terrorist financing in the Nigerian extractive sector document obtained from the website of the Nigeria Financial Intelligence Unit.
“EFCC the agency responsible for the investigation and prosecution of fraudulent subsidies in the oil and gas in Nigeria recovered N12,998,963,178.29 as proceeds of illegal payment made under the subsidy regime between 2017 and 2021”, the report stated in part.
A tabular breakdown showed that approximately N4.67 billion was recovered in 2017, N4.29 billion in 2018, N2.41 billion in 2019, N416.51 million in 2020 and N1.22 billion in 2021.
It was further noted in the report that there were several opportunities for fraudulent activities in the oil and gas sector.
“Opportunities for fraudulent activities exist in the oil and gas sector from extraction to sales of refined products to consumers.
“The absence of reliable equipment to measure the volume of crude oil being extracted makes it impossible to estimate the volume of crude oil extracted and even stolen through oil theft and vandalism.
“Oil theft also occurs in the downstream sector, as petrol pumps are rigged at petrol stations or adulterated.
“Also to be noted is the sale of petroleum products on the ‘black market’, giving rise to petroleum products being sold at exorbitant prices.
“Of concern is the emerging trend of filling station attendants acting as money agents, without appropriate customer due diligence carried out.
“It should be stated, however, that in most cases, the amount sold to an individual is usually not suspicious. However, if left unchecked, this practice could pose a threat to the country”, the report added.
It also noted that there had been diversion of petroleum products to non-designated retail outlets, which is a fraudulent practice that leverages on the fuel subsidy regime.
“Other fraudulent practices include the diversion of petroleum products to non-designated retail outlets to gain undue financial advantage.
“This practice may be intra- state, inter-state and across the borders of Nigeria to neighbouring countries.
“The Joint Border Exercise in August 2019 with operation code-named ‘Exercise Swift Response’ resulted in large number of seizures of trucks and other vehicles used to smuggle refined products outside the country.
“This exercise was coordinated by the Office of the National Security Adviser. This is also connected to the subsidy regime as the cost of PMS in Nigeria is significantly lower than in neighbouring countries.
“Another fraudulent practice is the smuggling of petroleum products. The NNPC recorded daily Premium Motor Spirit evacuation spikes in various depots across the country, against government projected volumes of daily consumption.
“These spikes led to the reactivation of Operation White II – an inter-agency task team comprising the NNPC, stakeholders and LEAs in May 2021. It was further reported that these volumes were being smuggled out to neighbouring countries like Benin Republic, Cameroun, Niger republic etc., with higher PMS prices compared to Nigeria.
“The OPW II team was mandated to curtail the smuggling, diversion and hoarding of PMS to ensure the Nation’s energy security. Intelligence-driven investigations are ongoing”, it stated.
In its biannual report known as Africa’s Pulse, which was released in April last year, the World Bank said increasing fuel subsidy put the Nigerian economy at a high risk as subsidy payments could significantly impact public finance and pose debt sustainability concerns.
In 2021, the Nigerian National Petroleum Corporation said fuel subsidy gulped N1.43tn, although there was no record for under-recovery in January.
The National Assembly approved N4tn as fuel subsidy bill for 2022, which was an increase of 179.72 per cent over the previous year’s subsidy bill.
However, experts have warned the Federal Government that the N4tn fuel subsidy bill would adversely affect the country’s economy.
The Central Bank of Nigeria (CBN) yesterday said 33 banks have met new minimum capital requirements under its recapitalisation programme, raising a combined N4.65 trillion to strengthen the financial system.
The apex bank disclosed this in a statement marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.
The statement said “Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy.”
The regulator said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said in the statement, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
It further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
To preserve these gains, the CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
The Tide learnt that foreign capital inflows into Nigeria’s banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025, up from $7.00bn recorded in 2024, amid the ongoing recapitalisation drive by the Central Bank of Nigeria.
Data from the National Bureau of Statistics capital importation report showed that the banking sector remained the dominant destination for foreign capital, accounting for $13.53bn of the total $23.22bn recorded in 2025, representing 58.26 per cent of total inflows, up from 56.81 per cent in 2024.
The surge reflects heightened investor interest in Nigerian banks as they raised fresh capital to meet new regulatory thresholds introduced by the apex bank, with industry-wide recapitalisation activities driving large-scale inflows across all quarters of the year.
However, the Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over weak credit flows to small businesses despite recent banking sector reforms.
The CPPE, led by a renowned economist, Dr Muda Yusuf, acknowledged that the ongoing bank recapitalisation exercise by the CBN has strengthened the financial system, but warned that the benefits have yet to translate into meaningful support for the real economy.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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