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Nigeria Gets Bids For 4 Rescued Banks, Growth Key

Source: CHIJIOKE OHUOCHA, REUTERS. - thewillnigeria.com


Nigeria's central bank has received bids for four of the nine lenders rescued in a $4 billion bailout last year, Central Bank Governor Lamido Sanusi told CNBC Africa Television on Monday.

Sanusi said two foreign institutions were involved in the bidding process, as well as several local banks and private equity firms in partnership with foreign banks.

"The advisers have finished analyzing bids already received for four of the banks. We expect the bids for the others to have been completed by the end of this month," Sanusi said.

He gave no further indication as to who the bidders were.

Nigeria is in the process of setting up an asset management company (AMCON) which will purchase non-performing loans with collateral and chase the recovery of the bad loans. It will also inject funds and take equity stakes if there are unsecured loans which need absorbing.

Sanusi said much work had been done in the last month to value the bad loans and gauge how much of them are unsecured.

He said a recommendation had been made to the president on the constitution of AMCON's board and was confident that once that was approved, deals to buy non-performing loans from the rescued banks could quickly be announced.

"I don't see any reasons why AMCON can't take these decisions in the next few weeks," he said, but added that the recovery of bad assets would take much longer.

"As far as the details are concerned, it will take a year to go and audit every asset, to do every valuation, do legal due diligence, set up systems and processes," he said.

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The central bank has prioritized getting credit flowing again in sub-Saharan Africa's second biggest economy after last year's $4 billion bank bailout.

Interest rates have been on hold at 6.0 percent for more than a year and inflation is in double digits.

Sanusi said he would be satisfied with a headline inflation rate of 9.0-9.5 percent and that creating economic growth was his priority. Consumer inflation eased to 10.3 percent year-on-year in June, its lowest in more than two years.

"When you have a country of 150 million people with 70 percent below the poverty line, it is extremely important ... to provide a stable environment to ensure growth of the economy is not hampered by some desire to pursue a very low single-digit rate of inflation," Sanusi told CNBC.

"We have brought inflation down in the last one year from 16 percent to 10 percent. We think we can do single digits and that is good enough, 9 percent, 9.5, would do for me," he said.