DELTA STATE — Two decades ago, Delta State’s banks were in contention for Nigeria’s most profitable bank. In the 1990s, it was a regional dynamo that was attracting foreign investors. Things changed when the banks started to fail.
That was the first illustration of the wave of bad loans that Nigeria’s former President Obasanjo is afraid could sweep the state’s banks. Under Obasanjo’s guidance, the banks were nationalized last year. Today, it’s the fall of nearby Delta State’s once-revered banks, and it’s the culprits he blames for the banks’ downfall — an erosion-causing wetland caused by build-up of surface water in rapidly growing Delta City, the heart of the state.
“You can tell there’s a crisis, just look at the figures,” said Obasanjo, 70, at a press conference Friday night.
Obasanjo offered few details but said the second explanation for the banks’ erosion woes could involve natural flood runoff from the Niger River, further corroding the banks. Though new drains are being built along the banks of the river, the river is still rising — a troubling problem in an arid region where Lagos has recently been losing tens of thousands of acres of land.
But unlike with the banks, Nigeria’s government can’t just build dams, the only permanent solution. Delta State is expecting $2 billion in investment in roads, hospitals and other social services by 2020. It will take 50 years to reduce the amount of water flowing to the banks, and the effort will cost five times what Nigeria’s government can afford.