The reform and phobia for Islamic banking
When Lamido first announced the sacking of the five Managing Directors of mismanaged banks along with their Executive Directors, what became clear obviously was that the young man was ready for a big fight with those who have for long found succor in sipping the economic blood of Nigeria’s petty bourgeois elements who either bought […]
When Lamido first announced the sacking of the five Managing Directors of mismanaged banks along with their Executive Directors, what became clear obviously was that the young man was ready for a big fight with those who have for long found succor in sipping the economic blood of Nigeria’s petty bourgeois elements who either bought shares in these banks or are mere depositors of varying categories.
The reality of the grave situation lies in the fact that the issue at stake is statistical and not grammatical. It is an issue that has to do with money, investment and the management of such monies and investment by those whom we thought stood tall in the comity of humanity and sought for our trust not only to invest in such banks but even take our hard earned monies for safe keeping with the hope that we may do business too.
When Sanusi and the CBN announced the sacking of these banks’ executives, I became skeptical of the fact that he was biting more than he could chew for the fact that under presidential democracy and the constitution of Nigeria that is in operation today, no monies could be expended without appropriation.
I did join the chanting crowds in the beginning not on the propriety of the action to sack those erring bank executives and the resultant insider abuses they perpetrated thereby causing the distress situations in the various banks, but because as a student of the legislature as an institution, I thought the Governor of the CBN had exceeded the limits of authority by committing such a large chunk of national resources in the bailing out of the five banks.
I held that belief very fervently until I met Waziri Adio who was with the Governor when he appeared before the House of Representatives Committee on Banking & Currency. I was re- educated on the meaning of bail out viz a viz what happened in the United States of America. What we thought at the beginning was that what the CBN did was to bail out these five banks.
On the contrary, there was no public fund in reality injected into any of these banks. This is commonsense. For instance, public funds or monies accruing to the government is collected in the federation account and there are laws on how these monies are shared amongst the beneficiaries. After sharing, each level deploys its own into uses by appropriation act.
It is an illegality for any level to deep its hands into the coffers of state without abiding by the enabling or existing laws regarding such. In the case of the CBN, what was done was simply opening new windows of access to these banks so they could meet their day to day activities but not without penalizing those who were responsible for the mismanagement of resources under their care.
I was convinced the more for instance when I was told that the CBN does not require parliamentary approval before it for instance mops up excess liquidity in the economy. This it does through sale of treasury bills and other related bonds. Equally, the CBN does not require any legislative stamp before giving loans to banks from time to time.
The new song now spearheaded by some magazines is that this action which Nigerians ought to commend is interpreted as a desperate route to entrenching Islamic Banking in the country. What is the relationship between the simple sack of erring executives with the introduction of Islamic banking in Nigeria? In any case, what is wrong with Islamic banking? Was it not approved under Charles Soludo? Was he a Muslim when he approved of it? Why would any shallow thinker imagine that Sanusi Lamido would soften the grounds or liberalize the atmosphere so that Islamic Banking takes immediate effect in the country?
Such a myopic standpoint has been responsible for Nigeria’s failures to tap the available opportunities in institutions that have bearing with the Islamic religion. When Nigeria in the 1980s wanted to join OIC, it was an issue despite the huge number of Muslims in the country. Uganda, with a slim population of Muslims for instance is a member of the OIC just for the benefits that accrue from that grouping, but the elites here are thinking otherwise because they are largely deliberately or otherwise uninformed.
Nigeria is the largest contributor amongst African nations in the Islamic Development Bank, yet we cannot access facilities from that bank just because some terribly uniformed elites would make religious capital out of it and cause tension and even crisis in the country.
The earlier this nonsense is stopped the better for all of us. The attention of Nigerians should be on what is mutually beneficial to the people and the nation and not cheap blackmail, slander and ignorant partisanship which in the end does no one any good.