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NIGERIAN ECONOMIC MELT DOWN

October 11, 2008

Just when we thought fortune was a bitch, here we are with a World economic meltdown. Remember the Nigerian Stock Market collapsed a few months ago under the heavy weight of its boss, Ndi Okereke Onyuike. My meager investments have suffered along with the stock market meltdown. But how is this latest World accident likely to impact on Nigeria and by extension, my economic recovery and build up. Again, perhaps I need to provide you with some information about my status so you could give advice based on my true situation. I watch CNN and subscribe to DSTV.

Just when we thought fortune was a bitch, here we are with a World economic meltdown. Remember the Nigerian Stock Market collapsed a few months ago under the heavy weight of its boss, Ndi Okereke Onyuike. My meager investments have suffered along with the stock market meltdown. But how is this latest World accident likely to impact on Nigeria and by extension, my economic recovery and build up. Again, perhaps I need to provide you with some information about my status so you could give advice based on my true situation. I watch CNN and subscribe to DSTV. That perhaps makes me a middle class by Nigerian standards. I have been watching Obama and hence could not have missed this American solution to Soludo’s invention. Nobody gives credit to a black man. Let me take you back a while. Remember when Soludo decreed 25 billion minimum for Banks. Some Banks naturally were ocean floor bound as there was no way they could survive. Soludo invented what he called FORBEARANCE. In this formula, he dipped his hands into our money and subsidized Bankers who had run their Banks to the ground. He urged their insolvent Banks to be taken over by large Banks and brought Government money to insure their losses so they could consolidate and merge with the big boys. That was a few years back. Now, America is doing precisely what Soludo invented without giving the big boy credit. If this was music, we would call America a pirate. This intellectual property of Soludo has just been plagiarized. And here we are keeping quiet. America would be suing Nigeria if the shoes were worn the other way around. Let us begin this discussion from me if you don’t mind. I am a fifty something year old male who was quite happy until July. In fact very happy I watched my investment building up impressively. In fact, I was in the forefront of the normal queue when Bank stocks are rumoured to be preparing for stock market appearance. My regret then was that I was rather too traditional. Why did I not jump into the market so late when young vibrant risk takers were making a mint? Beginning from over a year ago, I was introduced to the new wonder bank by my friend. He had been too busy making money to notice that I was outside of the new economy. He told me by accident actually as he would not have deliberately chosen to reveal the source of his financial success. But having finally opened the lid, He persuaded me to talk to a broker and introduced me to one. It turned out he had substantial financial interest in the brokerage mint. Prior to that regrettable persuasion, I had been watching television and hearing about bank stocks that appear to have continued to multiply at a binary rate like an amoeba. Practically everyone in my economic bracket and below saw the vision long before me and took action before I could even believe what was happening. You buy into a Bank, twelve months after, you had dividends of 7% or above and your stock holding had tripled as the market dribbles its way into your pockets. That was until a few months ago. In actual fact and this is no fiction, the Banks requested a deposit of 30% and they match your money with 70% to buy their stocks. They call it margin. And greedy as we all are that was precisely the point at which we should have wondered why banks have suddenly taken on our social responsibility in addition to their burden of marketing customers. What is in it for them to want us to partner them in profit making? But the season was too profitable to think and those profligate few among us had suddenly reformed their wayward ways and become very stingy as they took all their money to the stock market. They had all suddenly become investors. Contractors took mobilization and ran straight to the market to purchase shares while contracts suffered. Ministers had internet in their offices monitoring the markets and jumping up and down in consonance with the gravitational forces guiding their looted funds. 419 people all changed their business and started profiting from a more lucrative trade. Now it is pay day. We are all poor investors but the Banks are still declaring bundles of profit. The question many ask today is why are we carrying the can while the Banks which loaned these unsolicited funds are making out like a bandit cashing in on collateral without even asking their customers for an interview. How fair is it for us to rescue them with our money when Soludo gave them forbearance from our treasury while they come round to impoverish us all when business suffers a bump. Watching Television is great. Looking at ordinary American folks talking tough to their leaders, asking questions and punishing McCain for the sins of George Bush and their common party, the Republican Party is quite rewarding to democracy. We see how it should be done. What heat leaders must endure if they call on the people’s money for help. When ordinary poor people are entitled to a voice and when nobody can check whatever they chose to say when their day in the sun comes. From DSTV, you can telepathically extrapolate situations in the World to events at home. All these Banks all these years in America and Europe had been cooking their books and polishing the looks of their CEOs. Just the way our Banks have been copying this culture of fraud and stealing. Balance sheets carrying bad debts which keep up appearing in profit claims and projections. Their CEOs abroad, if you have been watching like I have, have been smiling to the stratosphere, buying very expensive yacht, some buy Airplanes or business jets as they chose to call it. They have also bought very expensive real estate in Tornado free zones of America, United Arab Emirate particularly Dubai, Acapulco in Mexico or Malaga in Spain while keeping expensive Park Avenue homes. But ordinary American folks informed and ill informed are in on the debate. A great gift of democracy which a free and fair election alone can guarantee. They are asking Government to first auction off these luxury extravagances before Washington can create a bail out. And that is very interesting because when Soludo was giving out our money to Banks, we were not in on the debate. When Nigerian Banks claim to make all these billions, the first question is what are they selling? What are Nigerian Industries producing. Who are the borrowing Companies and what are they doing with the money. What a shame that these questions do not bother anybody. First, there is no production economy in this Country. Power Holding Company guarantees that. There is no electricity anyway, therefore there is no way to lend to factories that will surely collapse as rapidly as a ripe apple falls off a tree. What we have is a trading economy. This does not really have to be bad depending on what is traded ,whether it is services or products primary or secondary. The tragedy is that only two items are on offer . Paper assets otherwise known as stocks. The second is dollars otherwise known as foreign exchange. And the Banks are right in the middle of both recycling processes. And when they grant loans once in a while, it does not go to importing raw materials for factories or enhancing agricultural production. Never. It goes to trading in stock and recycling money on paper. As for foreign exchange, they do it by themselves. They grant no loan to anybody there. They can handle the deal all by themselves. These Banks do not serve Nigeria, yet when they are in crisis, our money is taken from Central Bank to bail them out. If there is a loud noise of protest in America and a huge debate in Europe, we have no right here to discuss it. Because the money is so ripe in CBN and if Banks don’t take it Government thieves will do so anyway. Now when we look at the face of Television to witness this American economic meltdown, we can see the picture playing in our minds about the inevitable looming disaster here at home. Now look at our Banks and notice the huge billions they declare. Can you relate it to the pitiful dividends they extend to those they claim to be making rich. Those who buy their stocks. Can you now see a carbon copy of the Banks going under abroad. Now, our CEOs have been quicker to develop extravagant tastes for enjoyment. The fashion these days is for Bank CEOs in Nigeria to purchase Boeing business jets claiming they need this to supervise their branches in Banjul Gambia or Sao Tome and Principe. By my last count, I have five Managing Directors of Nigerian Banks on my finger. Whose money are they spending. Can you see all the yacht moored to the waterfronts in Victoria Island. Well most are for Bank Executives who need once in a while, to wind down at Takwa Bay. They really cannot swim but, this is how they do it in America. And whatever is fashionable in America must be reasonable here at home. I guess what we are saying here is that these unreal Bank profits are ticking time bombs. And instead of Soludo designing new forbearance strategies, it is time to begin oversight functions on these Banks before they collapse completely taking our economy along with them. It is not a matter of if, it is a question of when.

 

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The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of SaharaReporters

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