Nigeria’s Weekly Woes.
In Nigeria, its one week one trouble or even more. Some authors have described Nigeria as a theatre and Nigerians the actors. Less than a month ago we were talking about the Niger Delta crisis, the militants, and the federal government amnesty. Hardly have we finished talking about the above, did the Boko Haram crisis erupted. As the Boko Haram troubles were about to die down, then came what I call the “Nigerian banking crisis” (Central Bank of Nigeria’s sacking of five bank chiefs and the astonishing in house revelations). By the time this crisis will die down, another national crisis will come up. I want to be proven wrong.
The Central Bank Governor (Lamido Sanusi) has simply done his job by sacking some bank executives for what I call gross misconduct. However for him (the Central Bank Governor) to complete this job, he need to also sack those Central Bank officials that continued to grant these banks facilities, despite their ailing financial state. Will this exercise started by the Central Bank Governor lead to another banking reform or full blown banking crisis? I will believe the later. Be that as it may, I know there will certainly be changes with the commercial banks. I wish to use this medium to suggest to the Central Bank Governor (Lamido Sanusi), to use his position and stop our commercial banks from sending young ladies and men running after people begging for cash to be deposited in their banks. The amount of targets given to banks staffs to get is simply outrageous.
It appears that the special units at the Central Bank of Nigeria, who are responsible for monitoring commercial banks, have failed in their duty or they are part of these non performing loans. Otherwise why didn’t they prevent this mess from happening? Who and who were responsible for this unit at the Central Bank? Why did the ex Central Bank Governor (Chukwuma Soludo) told the Nigerian Senate and Nigerians that all were good with all commercial banks in Nigeria?. Why did the past Central bank management connive to misinform the Nigerian public by deliberately covering these banks? Nigerians deserve a lot more explanations.
The Central Bank has also published the names, companies and their directors who have put these banks and the nation in this crisis. However this detailed list of these bank debtors has equally shown that, these are men and women who frequent the corridors of power, for example Dangote, Otedola, etc. Let’s not forget that this same Dangote was unanimously voted the chairman of the Nigerian Stock Exchange. Transnational Corp of Nigeria Plc, who has Prof Ndi Okereke-Onyiuke as one of their directors, is also heavily indebted. Prof Ndi Okereke-Onyiuke is the Director General of the Nigerian Stock Exchange.
The Central Bank has asked these bank debtors (Dangote, Ndi Okereke-Onyiuke, Alhaji Arisekola Alao etc) to pay their debts or the CBN will take appropriate legal actions to ensure payments. Could the Central Bank be kind enough to tell Nigerians what these legal actions would be? Could this be a criminal case? Can the Central Bank move against these directors? Will the Economic and Financial Crimes Commission arrest these debtors? Which reminds me, I read that the Economic and Financial Crimes Commission (EFCC) has arrested some of the sacked former bank chief executives. To achieve a balance and fairness, the Economic and Financial Crimes Commission (EFCC) should arrest immediately the debtors and those Central Bank officials who failed in their duties to spot this. There is no point arresting or declaring only the bank executives wanted. The debtors and some Central Bank officials should also face the music at the same time.
The Central Bank should make public the financial state of the remaining banks. The federal government and the National Assembly should intervene immediately on this matter. The affected banks should also be nationalized pending when these debts will be recovered, and that is if it will ever be recovered. Those bank executives who have gone into hiding should report themselves to the EFCC immediately. Nigerians should volunteer information to the law enforcement agents on the whereabouts of these people. Going underground means they have something to hide. Those that have relocated to abroad should remember the case of three British Natwest Bankers (David Bermingham, Gary Mulgrew and Giles Darby) that were extradited to the United States to face charges connected to Enron fraud case. The Nigerian authorities should sign extradition treaties (if there are none already) with western countries so that Nigerians who commit crimes at home and run away can be extradited back home to face charges.
The pains of this mess will eventually be borne by the innocent Nigerian masses that already have too much problems. The Central Bank should also use their privileged position to expose other shady financial transactions by all ministries, government departments and agencies, especially the Nigerian National Petroleum Corporation. These revelations by the Central Bank might be a child’s play if the Central Bank should expose other sectors. Obviously this has made a mess of the banking reforms carried out by former Central Bank Governor (Soludo) who is also a beneficiary of the non performing loans that is causing this banking crisis in Nigeria.
The sacking of these bank executives and subsequent revelations about their financial state might trigger a ripple effect like mass withdrawal of funds. Nigerians know the pains of collapsed banks. Many innocent bank customers have died in the past as a result heart attacks occasioned by collapsed banks. Businesses have closed and many families made destitute as a result. I see no reasons why there will not be mass cash withdrawals as experiences have taught Nigerians bitter lessons.
On the international scene, this will further drive away foreign investors. Even the Nigerians in Diaspora will be reluctant to invest at this rate. Investor confidence is no more. Am sure local investors in Nigeria will be too scared which bank to do business with? Events are made worst due to global economic recession. Many sectors of the Nigeria’s economy will suffer as a result of this banking crisis. The “government’s economic policies” like vision 2020 might also be affected.
The Guardian newspaper of Wednesday August 19th 2009 (online version) reported that the Central Bank of Nigeria is planning a road show in the United Kingdom to explain its action and the soundness of the Nigerian banking industry to the international community. I think this might be a waste of time and resources because the international community will ask the Central Bank that is organizing the road show, why didn’t they spot these problems earlier and why did the (CBN) continue granting these five banks facilities when their books were not in order. The Central Bank should concentrate on cleaning up the banks. The positive impact of your (CBN) sanitization exercise in the banks will convince the international community. May God bless Nigeria.
Chinedu Vincent Akuta
An activist and leader of “Support Option A4 Group” Leicester-UK