As Nigeria celebrates robust growth in its digital economy, a shadow industry of sophisticated fraudsters is expanding at an even faster pace, according to alarming new data released Wednesday.
The Nigeria Inter-Bank Settlement System (NIBSS) revealed that banking fraud losses have nearly tripled over five years, reaching 52.3 billion naira ($34.8 million) in 2024, up from 11.6 billion naira in 2020. The report states that Nigeria’s GDP showed its strongest growth in three years, with a 3.8 percent increase in the fourth quarter.
As more transactions move online, criminals are finding increasingly sophisticated ways to exploit the system.
Fraudsters attempted to steal 86.4 billion naira in 2024 alone, with tactics ranging from gift card schemes to identity theft targeting vulnerable populations. The report highlighted that approximately 400 million naira were funneled through accounts opened using stolen identities of senior citizens.
Nigeria’s tech ecosystem, which attracted an estimated $400 million in startup funding last year, has made the country’s digital payment infrastructure among the most advanced in Africa. This digital transformation accelerated following recent cash shortages and currency reforms that pushed millions of Nigerians away from physical currency.
The country’s struggle with fraud has deep cultural roots, with “Yahoo boys” – as local fraudsters are known – even celebrated in popular culture. Several mainstream Afrobeats songs reference internet fraud, including the 2007 hit “Yahooze” by Olu Maintain.
International financial monitors have placed Nigeria on a “grey list” alongside countries like South Sudan, Bulgaria, Monaco and Croatia for deficiencies in preventing money laundering and terrorism financing.
The problem has increasingly involved international networks. In December, Nigeria’s Economic and Financial Crimes Commission arrested 792 suspects in Lagos, including 192 foreign nationals – 148 of them Chinese citizens. According to EFCC spokesman Dele Oyewale, these operations typically target victims in North America and Europe.
NIBSS officials indicated that some stolen funds have been recovered and investigations into implicated bank staff are ongoing.
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