The Central Bank of Nigeria (CBN) has explained why it is intervening in the issues surrounding the syndicated loans obtained by Etisalat Nigeria from a conglomerate of 13 Nigerian banks.
This is the first time the regulator would be confirming that Etisalat could potentially affect the Nigerian economy, particularly the banking sector.
According to Isaac Okorafor, CBN’s spokesperson, “Although it should ordinarily not be the role of a regulator to decide how individual bad loans are resolved, the CBN believes that Etisalat is a systemically important telecommunications company with over 20 million subscribers that if not well handled, may have negative implications for the banking system itself.”
According to him, the CBN and Nigerian Communications Commission (NCC) envisaged that the banks could reduce the company’s workforce which stands at over 4,000 thus prompting the intervention of the CBN and NCC.
“Both regulators implore the consortium of banks to re-assess its position in dealing with Etisalat,” he said.