By RARZACK OLAEGBE
Internet fraudsters fleece Nigerians of millions of naira every day.
The dead resurrected and spoke in Kenya’s financial sector theatre. When Alfred Basweti’s signature appeared on Kenya Union of Savings & Credit Co-operatives (KUSCCO)’s 2022 financial statements, it was not merely an administrative oversight. It was the perfect metaphor for a financial system haunted by phantom profits and ghostly accountability. There was one problem, though: Basweti died before the document went public.
A November 2024 PwC forensic audit exposed how the executives inflated assets by Sh14 billion: They paid fictitious dividends from member savings. They funnelled Sh1.6 billion in untraceable commission. This macabre detail emerges from the heart of Kenya’s most devastating financial scandal. It threatens the stability of a financial sub-sector that forms the backbone of middle-class aspirations in Kenya.
On the other hand
Nigerian banking fraud has trippled. A report released by Nigeria Inter-Bank Settlement System (NIBSS) revealed that funds lost to fraud in Nigeria’s banking system have nearly trippled over the past five years. Analysis by the NIBSS estimated that 52.3 billion naira ($34.8 million) was lost to fraud in 2024.
On the one hand
In 2020, 11.6 billion naira went missing. This happened in Nigeria with a thriving technology and finance sector, the finance sector that is confronting a rival industry: Yahooze. That is another name for the industry populated by the internet-savvy Yahoo boys. Do you remember Yahooze? It was a successful song released by Afrobeats star Olu Maintain in 2007. The song celebrated the internet fraudsters.
Internet fraud is now an industry. It is thriving. It is jostling for attention with the finance sector. The fraudulent acts listed above came via the internet. Many Nigerians have lost billions of naira to these rats. What have we done to arrest the situation? We turned the act into a song and a dance. Yahooze.
In the long term
According to the report, fraudsters attempted to steal 86.4 billion naira in 2024. The numbers came after the latest GDP figures showed fourth-quarter growth of 3.8 per cent. This increase got a boost through the services sector: Finance and insurance. “The amount lost to fraud has increased over the past five years along with the growth of financial transactions in the digital payments sector,” the report stated.
Nigeria’s digital payment system is one of the most robust in Africa. We have a thriving technology startup ecosystem that raised an estimated 400 million dollars in 2024. According to media reports, such services are important as a cash shortage and currency reforms pushed users away from physical banknotes.
Because of the learned e-payment habit by Nigerians, fraudsters are using various methods to defraud unsuspecting Nigerians. Gift cards. Accounts opening. They are using stolen identities of senior citizens, minors, and foreigners to perpetrate the act. Due to this, an estimated 400 million naira was received in accounts opened with the stolen identities. Aside from this, many Nigerians were complicit in the act. Some were ‘’employed’ to find victims online through phishing. They targeted mostly Americans. Canadians. Mexicans. Etc.
Why do these matter?
The law recovered the stolen funds and arrested some bank employees. However, the international fraud monitors have categorised Nigeria under the “grey list.’’ Do you know the co-travellers? South Sudan. Bulgaria. Monaco. Croatia. These countries were deficient in preventing money laundering and terrorism financing. Meanwhile, the Economic and Financial Crimes Commission had arrested several foreigners in connection with the internet fraud.
In the short term
While we danced to Yahooze, the fraudsters are fleecing Nigerians of millions of naira. Every day.
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