Lamido for president!

I would have screamed to high heavens if it was someone else that simply signed over $2.5billion as bail out for the banking industry.  I wrote three different articles on this page analysing the subject of bailouts, pre-empting that one day we would be bailing out the banking industry and advising strongly against such a […]

I would have screamed to high heavens if it was someone else that simply signed over $2.5billion as bail out for the banking industry.  I wrote three different articles on this page analysing the subject of bailouts, pre-empting that one day we would be bailing out the banking industry and advising strongly against such a spending of scarce tax-payers funds.  The ultimate hazard, I had argued then, was the likelihood that the culprits (the bank executives and the collaborating customers) would get away with a slap on the wrist, while the people bear the brunt of such a bailout, with a reduction in the amount of money available for infrastructural development.  That was the case in the USA, and it’s more than a likelihood here.

The enormity of challenges facing the banking industry is gargantuan.  But it is obvious that when faced with a seemingly convoluted problem, the real challenge is to figure out where to begin unravelling such.  That is the hallmark of pragmatic leadership.  That is the step that Mr Sanusi has taken with a decisive removal of 5 of Nigerian banks’ MD’s and their Boards.  A leader, at any level, also has to be ready for outlandish criticisms about his intentions.  Imagine some of our people talking about a certain northern agenda, when in actual fact they should be rejoicing at the likely impact of this decision to offset positive events towards the redemption of this country.  For them one should ask; how many Northern MDs were appointed to take over the ‘failed banks’.  And is the publishing of banks’ bad debts not enough evidence of problems in banks?

This is my thinking and why I fully support the CBN decision:  Imagine that the removal of bank MDs will spin off a lot of caution in the way banking is being carried out in Nigeria.  Imagine that by the end of the inferno those we thought were rich ‘big men’ would have disappeared from reckoning.  Imagine that in the interim, there will be serious meltdown and chaos in the Nigerian corporate setting.  Jobs will be lost, salaries will be cut.  Imagine that will cause many people to suffer, and many dependants will find that the money that always come from their ‘brother’ in Lagos and elsewhere is no longer forthcoming.  Also those girls that have always had their men-friends pick up the bills for their rent and their cars and sundry items, will find the largesse disappearing.  Because in the first place, the largesse has always been a product of insensitive recklessness, theft and fraud.

Imagine that the business of banking will change fundamentally and revert to relationship management.  Imagine that banks will be forced to ramp up on their risk management capabilities such that they can now finance projects that will impact on the economy and then manage the possibility of losses in their outlays more effectively such as to prevent a re-occurrence of what is playing out today.  That would be good for the economy and for Nigeria at large, won’t it?  The only crack I can see in the unfolding scenario, is the continued insensitivity of our political elite, and the large size of government in a political setting.

Many governors maintain thousands of Special Assistants and Personal Assistants, who themselves have PA’s and SA’s.  And nothing has so far been done to indicate to these political elite, that the show is over and that they cannot continue accruing state funds to their personal use.  The governors and other politicians who did that in the past are walking free today and are kingmakers.  So this itself begins to make the action with the bankers look skewed.  But I also see a day in the near future when the Nigerian people will feel the pinch so much, that they will readily and openly challenge their political representatives to exhibit better sense of management.  I see the day that people flaunting wealth openly on the streets will be stoned, not celebrated, by the people.

I predict that this country will be lucky once again and escape total decomposition, and that what has happened will be a catalyst for better things to come.  For the first time we have named and shamed those who strut around as ‘big men’, but who are merely sitting on funds belonging to everybody.  Sceptics should know that the CBN by its recent action has saved us a lot of grief. If they hadn’t acted when they did, we’ll get to the banks one day and perhaps 15 of them will not be able to service customers again, because some ‘big man’ has collected tens of billions of Naira in cahoots with the MD and EDs (who also collected their share of the booty from the customer), and there is no more money to pay customers.  

Some say being a bank debtor is not a crime; but it can be, especially when well-intentioned credit is diverted for wrong purposes and when such monies are disbursed without proper analysis of ability, or willingness, to repay.  In that case it is the direct stealing of poor customers’ deposits by the bankers and their cohorts.  Poor farmers, salary earners, artisans and so on, cannot be allowed to continue to suffer that fate.  I know people who died on their sick beds, simply because they were unable to access their bank accounts in 1993/4.

However, it is important that the CBN clarifies its modus operandi in this matter.  What qualifies a bank MD for being removed?  We are aware that many of the still-being-audited banks are equally, if not more rotten.  It would be unfair to chicken out after removing only 5 bank MDs.  More needs to go.  A bank can be relatively small, but relatively worse run than most.  Also, many of these big debtors being named today, also have loans in just about every bank.  What we have seen is just a tenth of what they really owe.  CBN must go the whole hog with equal ferociousness.

Lastly, I wouldn’t want to put Sanusi Lamido in trouble with his Boss, President Yar’adua.  I know he doesn’t have any political ambitions (for now), and is just a man out to do a good job.  He must be commended for that.