Money lost to fraud in Nigeria's banking system has nearly tripled over the past five years, an industry regulator said Wednesday.

An analysis published by the Nigeria Inter-Bank Settlement System estimated that 52.3 billion naira ($34.8 million) was lost to fraud in 2024, compared to 11.6 billion naira in 2020.

The West African country, home to a thriving tech and finance sector, has for decades faced a rival industry of internet-savvy "Yahoo boys," as fraudsters are popularly known.

The report said fraudsters attempted to steal 86.4 billion naira in 2024.

The numbers come after the latest GDP figures showed fourth quarter growth of 3.8 percent, the fastest in three years, in part driven by the services sector, including 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," NIBSS said.

Nigeria's digital payments system is regarded as one of the most robust in Africa, and tech startups in the country raised an estimated $400 million funding in 2024.

Such services have become even more important in recent years as a cash shortage and currency reforms pushed more users away from physical bank notes.

Fraudsters were said to use various methods, including withdrawing funds to gift cards and opening accounts with the stolen identities of senior citizens, minors and foreigners.

The report estimated that 400 million naira were received in accounts opened with the stolen identities of senior citizens.

NIBSS said some funds have been recovered and implicated bank staff are currently being investigated.

Nigeria is listed as a "grey list country" by international monitors alongside South Sudan, Bulgaria, Monaco and Croatia due to deficiencies in preventing money laundering and terrorism financing.

"Yahoo boys" have become so ingrained in Nigeria that several popular songs that touch on internet fraud, including a 2007 song 'Yahooze' released by Afrobeats star Olu Maintain, have enjoyed mainstream success.

Nigeria's Economic and Financial Crimes Commission (EFCC) anti-graft agency has also arrested several foreigners in connection with internet fraud.

In December, the agency arrested 792 suspects in the affluent Victoria Island area of Nigeria's commercial hub of Lagos.

At least 192 of the suspects were foreign nationals, 148 of them Chinese, the agency said.

EFCC spokesman Dele Oyewale said in a statement that foreign gangs recruit Nigerian accomplices to find victims online through phishing, targeting mostly Americans, Canadians, Mexicans and others in European countries.

Nigeria's statistical agency earlier this year said going forward it will add illegal and hidden economic activities while calculating the country's GDP. (AFP)

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