• The West African Development Bank (BOAD) is providing $82.5 million to Niger to stabilize Sonibank, a key public bank facing financial distress.
• Sonibank has been struggling with liquidity issues and non-compliance with regional banking regulations.
• The bailout comes amid broader instability in Niger’s banking sector, worsened by the political crisis and economic sanctions.

Niger’s banking sector is under strain, and one of its largest public banks, Sonibank, is at the center of the crisis. To prevent its collapse, the West African Development Bank (BOAD) has approved an $82.5 million (CFA50 billion) financial package for the government. The funds will help stabilize the bank, which has been struggling with liquidity shortages and financial mismanagement.

The decision was announced on March 27 during BOAD’s board meeting in Dakar, led by President Serge Ekué. Alongside reviewing its 2024 financial statements, the bank approved 15 new financing projects, including this critical support for Sonibank.

Sonibank, which holds nearly 8% of Niger’s banking assets, has been in a downward spiral for months. A recent report from the International Monetary Fund (IMF) revealed that the bank’s capital is in negative territory, amounting to -0.7% of Niger’s GDP (roughly -CFA80 billion). This signals a state of technical insolvency, requiring urgent recapitalization.

Liquidity issues have also worsened. Sonibank has struggled to meet withdrawal requests from customers and is no longer complying with key financial regulations set by the Central Bank of West African States (BCEAO). The crisis stems from mounting unpaid debts, rising bad loans, and a sharp decline in deposits—largely due to the economic downturn that followed Niger’s July 2023 coup and the resulting regional sanctions.

BOAD’s $82.5 million injection is designed to strengthen Sonibank’s capital, restore its ability to honor commitments, and ensure it can continue financing Niger’s economy. The bank plays a crucial role in supporting small businesses, local governments, and the agricultural sector.

With Niger’s economy already under pressure, Sonibank’s inability to provide credit had started affecting broader financial stability. The BOAD bailout offers breathing room, but long-term recovery will require deeper reforms.

While BOAD’s intervention is a temporary fix, Sonibank still faces major hurdles. To regain stability, it must overhaul its governance, improve asset quality, strengthen internal controls, and rebuild trust among depositors and institutional investors.

The challenges go beyond Sonibank. The IMF reports that four out of Niger’s 14 banks no longer meet the BCEAO’s minimum capital requirements. Non-performing loans (NPLs) have soared above 24% of total loans—far exceeding the regional average in the West African Economic and Monetary Union (WAEMU). Some banks are even struggling to meet cash withdrawal demands.

The crisis exposes deep-rooted vulnerabilities in Niger’s banking system: an overreliance on public sector financing, weak credit diversification, and rising sovereign risk. The post-coup political turmoil, regional sanctions, and the prolonged border closure with Benin have only worsened the situation, drying up deposits and further destabilizing financial institutions.

For Niger’s authorities, the challenge is twofold: they must stabilize struggling banks like Sonibank while pushing for broader banking sector reforms. Stronger oversight, stricter regulations, and better governance are needed to ensure long-term financial stability. Beyond Sonibank, the country’s ability to maintain an effective banking system is at stake.

Fiacre E. Kakpo