Your money down the drain

In a society like Nigeria, their luck is even more assured.  Here, nobody faces the wrath of the law especially when they steal enough money to purchase royal fathers and anybody else that matters.  Indeed in a political environment as we are today, anybody can steal as much as they like, and then use stolen […]

In a society like Nigeria, their luck is even more assured.  Here, nobody faces the wrath of the law especially when they steal enough money to purchase royal fathers and anybody else that matters.  Indeed in a political environment as we are today, anybody can steal as much as they like, and then use stolen wealth to become kingmaker, sponsoring governors and presidents alike.  The Nigerian society today wallows in abject degradation in spirit and soul, from the private to the public sector.

I have just enumerated N123billion ‘written off’ in the banking industry, between just five banks.  There is much more to come, and even what has been written off now is just a fraction of what each individual bank is sitting on.  How much more are we to expect?  Perhaps a Trillion Naira or Two.  And we have them to thank for the recklessness with which they ruled their little kingdoms.  What could have given our bankers the idea that the banking industry could run so far out ahead of the rest of the economy?  When we raised several alarms and reminded anyone who would listen that the phenomenon of snazzy Nigerian banks declaring out-of-the-world profits was a mirage and was going to do great damage to the society, some of us were shouted down.  Now see what we have put ourselves into?

Firstly, for those who have been repeating the tired mantra that the ‘fundamentals’ of Nigerian economy, its banks, and its stock market, were ‘strong’, there you have it.  The ‘strength’ of Nigerian banks was built on the systemic corruption of the Nigeria society (as they grab from people who do not have, making us all poorer just so they can look good, and they obtain and sit on badly-needed public sector funds for pecuniary benefits), and also on unnecessary exuberance which has come to define what the average Nigerian stands for.  These were the same banks that went all out and traumatised the average Nigerian with their incursion into our stock market, raising unprecedented amounts of money from poor Nigerians, pumping up the market, and then dumping shares massively and making hapless Nigerians pay for this.  

But for the entry of Sanusi Lamido, who is perhaps strong-willed and not easily compromisable, will we be hearing of these write-offs?  I know that most banks in Nigeria had planned to post profits at least 50% higher than they had last year.  We would by now be hearing of banks declaring N80billion or more, and then they would all be competing on the platform of whose profit was the largest, while they ignore the larger damage they are doing to society.

People erroneously think that what is being written of is margin loans to the stock market.  Well, maybe that’s part of it, but the bigger issue has to do with the entire loan portfolio of all the banks.  Margin loans are a late entrant to the foray of deception going on in the Nigerian banking industry.  It is, to me, a non-issue.  The fact is that the more money our banks raised (from a poor people), the more they wasted.  I’ve tried in the past to bring some of the unwholesome practices to the fore on these pages.  Read again a recent article which I originally titled ‘Exorcising The Nigerian Banking Industry’, but which was erroneously published as ‘Welcome The Real Great Depression’.  The latest World Bank Global Development Finance Report alludes to the fact that more than 50% of the loan book of Nigerian banks were technically bad and could default.

One day the story of the Nigerian banking industry will be told. The industry itself is indeed a symptom of what our society has become.  No one wants to do any real work anymore, everyone wants to push a pen and dress gorgeously.  No one wants to soil his hands, but everyone wants to make seriously big money, fast.  Everyone wants to play with money that is not theirs, and everyone wants to cut corners.  Yet we complain about how bad Nigeria is.  When you combine the activities of the private sector with the callousness going on in the public sector, it is evident that nowhere else on Earth are a people working so actively towards the devaluation, bastardisation, and eventual destruction of their own society as we are doing in Nigeria today.

Two major problems face Nigeria today, emanating from the trajectory of the banking industry.  Firstly, what do we do about so much public sector funds sitting in our banks idle, when they ought to have been disbursed for sundry developmental purposes?  This is the core of funds on which we have built such a gargantuan banking industry, which itself has now effectively exported serious economic contagion to many innocent West African countries (who should have known better anyway).    The second is what do we do about the complicity of our politicians who are beneficiaries in more ways than one, from the rot that is going on in the Nigerian banking industry?  

For in spite of the apparent retardation that has beset many of the so-called ‘whiz-kids’ that we prop up as role models in the banking industry, some of whom have received the now meaningless national awards, the industry apparently corrects itself every other decade or two.  The last time it was Sani Abacha marching some of these guys to his gulag.  And after that the industry piped down a bit. As I write, Lamido (my main man), has just succeeded in sacking the boards of five of these banks.  But will they be rightly prosecuted as they should?  Will President Yar’adua do the needful?  If no former state governor is in jail, no one convicted and in jail on account of Halliburton and the rest, will the bankers be brought to book for the frauds?  

Recall that some of the bank MDs now sacked were at the vanguard of political sycophancy just a few years ago.  They formed the infamous ‘Corporate Nigeria’ and cornered the people’s wealth.  They ripped us all off in the stock market and threw wanton wealth in our faces.  They thrived under the rule of recklessness that was the hallmark of Obasanjo government.  Now the chicken has come home to roost.