Sanusi’s unintended consequences
For if the first consolidation program had had a developmental focus, it would have been so directed. What we achieved with that process instead was a metamorphosis of our 89 banks of all hues and shades, into of the craziest, most selfish, misguided, philistinic and ultra-competitive banks in the history of banks. The banks simply […]
For if the first consolidation program had had a developmental focus, it would have been so directed. What we achieved with that process instead was a metamorphosis of our 89 banks of all hues and shades, into of the craziest, most selfish, misguided, philistinic and ultra-competitive banks in the history of banks. The banks simply swallowed up the regulators, created a few mega-oligarchs, disbursed peoples’ savings to themselves and their friends, sat on badly-needed public sector/infrastructure allocations, collapsed the stock market with greed, and ensured that property prices across the length and breadth of the country skyrocketed (what with their establishment of glistening, expensive branches amid abject and crass poverty in the length and breadth of the country). That was the unintended consequence of the first ‘consolidation’.
So what will be the unintended consequences of Sanusi’s banking revolution? The direct consequences are that bankers have been disgraced and some may face the full wrath of the law, politicians who have vested interest are jostling to truncate the process, and Sanusi’s initial aim is about risk management and corporate governance. He believes some people do not have business doing banking and rightly so. Like they say if you have integrity, nothing else matters, and if you don’t have integrity too, nothing else matters. Sanusi is very much concerned with ensuring only people with some bones of integrity in their bodies run the banks. That in itself, in the present day Nigeria, no thanks to the trauma we have suffered in the hands of our so-called leaders, is an arduous task to achieve. Would we have to lay off every bank staff so as to re-input a new paradigm in the system? Is that a feasible scenario? Yet what the industry needs is a change in paradigm, a new way of thinking.
But I can see the unintended consequences of Sanusi’s intervention already; end-points that may not have been articulated by him and his team from the beginning. As a result of the brave clean-up of the system, and in spite of the cacophony of criticisms, banks will be more careful how they share the people’s deposits as if it was some armed robbery loot among their friends (and to themselves). No one wants to be a guest of the EFCC and be bitten by merciless mosquitoes. Banks will also very carefully and favourably consider credit proposals presented to them by aspiring entrepreneurs going forward. For the banks have been called back to their senses and now they can see very clearly that there is a need to balance their goal of profit maximisation with some social responsibility.
People keep savings in banks innocently. But banks harness these deposits for a purpose. Now the deposits will be harnessed towards the provision of infrastructure. The first five busted banks had over N747billion with just a few oligarchs. If that money had been channelled towards energy, or roads or rail network, this country will not be the disgrace it is today.
Some people have also been trumping up legalese, saying that the man acted outside the constitution. They are quick to quote what happens in the United States. But look around you and see what kind of jungle we live in. People with blood on their hands are approaching the court of equity. ‘How manage?’, like our people will say in pidgin English. Have the people on behalf of whom the paid advocates are demanding equity treated the people of Nigeria with equity when they should? Have they not breached the trust that the people reposed in them, by employing the people’s savings for flights of fancy?
With the embarrassment of people who we thought were untouchable in Nigeria before now; people who had donated billions of Naira to the ruling party, wined and dined with the President and First Lady; travelled the whole world to receive awards as ambassadors of Nigeria; been recognised as the best of Nigeria’s export by the international community, a precedence has also been set, because politicians can then be brought to book someday in the future, while the president washes his hands clean of them. It may be the current president, or another one. But the fact that the bankers are being dealt with in the proper manner befitting of their malfeasance, will make the people demand for more evident and stricter measures against politicians who had gotten away with blue murder in the last 10 years. It will be difficult to call daylight robbery ‘party/family affair’ going forward.
But perhaps the most important unintended consequence of Lamido’s action is that he has unwittingly been used by God to avert the total disintegration of this country, by diffusing a growing class tension. The business model employed by the banks before now, made them see nothing wrong in self-aggrandisement. So the politicians as well as the bankers lorded it over the people. Bankers from AGM and above now move about with police escorts, while the new IG complains that 75% of his Force are presently employed to be houseboys and bag carriers for all shades of charlatans. On my return from a trip to Ghana last year, I had written that this singular factor separated the two countries; that the rich people in Ghana do not openly flaunt their wealth to the poor people, and that this factor alone is why we are in all shades of war in Nigeria today.
If we had continued with status quo, the damage being done to society would have been further solidified and while everybody blames everybody and nobody does anything about the situation, perhaps the nation would have erupted into another senseless war sometime soon. So instead of people ‘breaking his balls’ like the Italian Americans would have put it, I think we should be seriously grateful for the gift of Lamido Sanusi.