When Sanusi Lamido was to be appointed Governor of Central Bank of Nigeria, there was a thick opposition climate that called attention to his state of origin and the constitutional clause about federal character. It was very rightly claimed that  the principle of Federal character was being violated because Kano state was producing more than its fair share  of Cabinet Ministers. Others added further that Sanusi’s specialization was in risk management and that the Central Bank was not a risk-taking bank neither did it need somebody who read Islamic banking because western financial institutions will be afraid to do business with him. 

The other flank of oppositionists was that Charles Soludo revolutionized the Banking industry with his re-capitalization venture. The growth rate in the economy under Soludo was applauded and seen as something attributable to his ingenuity and the new technocracy under the Obasanjo administration. Generally, there was a new faith and belief in the credit system as there was an emphasis on creating a viable credit economy. The stock market began to boom and returns were high, Nigerians became enthusiastic and everybody suddenly became a either a stock broker or stockholder or one way or the other interested in purchasing shares and stocks.   The price of crude oil was high and it hit the US$147 per barrel mark. There was a false sense that all was well and that Nigeria’s economy was on a path towards development in the sense of the South East Asian Tigers experience.

The flipside of the claims was that poverty soared, capacity utilization in industry declined,  there was de-industrialization; banks became involved in  trading, buying and selling crude oil and they were all heavily dependent on state funds drawn from the  Federation Account or states monthly allocations. Mortgage banking was in recession, short term loans were preferred to long term loans, interest rates were so outrageous, trading was preferred to manufacturing and insider hireling activities took preference in the stock market-the rules were not obeyed. All the dangers of an economy that was sliding were already on but we enjoyed the honeymoon of high yields on returns on shares. The meltdown came and it had its impact, but frankly speaking, the meltdown was not the fundamental cause of the crisis in our stock market and banking sector.

The Nigerian economy is held hostage by a group called “Corporate Nigeria”. Rather than assisting to build a strong and virile economy, this group is engaged in speculative accumulation and quick returns which in any way did not assist the economy. Corporate Nigeria had a complex and intricate relationship with the state and as such they were able to maneuver and manipulate their way all through. The impression we were given as novices and non-bankers was the  banking sector had been sanitized and it was the booming aspect of the Nigerian economy. But elementary economics teaches us that banking is about money and transactions not merely warehousing money (a.k.a re-capitalization), money is meant to facilitate and assist transaction and to assist development. But the money was not focused on critical sectors that will create jobs (not poverty alleviation) or revamp our industries; rather it was concentrated in telecommunication, oil and other such sectors that never added value to the growth of the economy.

Sanusi Lamido’s window on the banks showed three things: first that many of the banks behaved in irresponsible ways because they violated all known banking rules and procedure; second, many of those who were given loans had not performed well, the implication being that it soared the debts of the banks and put them at high risk; and third that people merely secured loans because of their names. Simply put, they used their names as collateral. This has brought to question even the issue of who is defined as an investor in Nigeria.

What has been the character of our banks?  Young ladies are recruited and given targets of varying sums of money to meet, all running into millions of Naira, which they must meet within months or else they are relieved of their jobs. Management does not care how those ladies raise the money. Huge deposits became substitute for a healthy bank, after all the essence of re-capitalization pointed to that logic. Young girls were used to help recapitalize and sustain the finances of banks and some of them were forced to compromise themselves and do things they ordinarily would not do-all because they wanted a job.

In the boom era, many Bank executives and big “investors” made generous donation at launchings, be they political, educational or religious, and they were hailed. All other sectors were in deep crisis except the banking sector. The banks that ought to provide the leverage for other sectors to grow, celebrated itself not by the loans given to genuine investors, but by the money it sat upon,  not by the long term investments made but by the  short term speculation it made. The risk element in taking loan  was directed at a  specific set of people-the poor. The rich undertook no risk. It was easy for big scale traders to get a loan than for small scale manufacturers and enterprises to secure loan.  In no time, everything came to the fore.

 Four banks may have been mentioned, however they are not the only ones. Virtually all the key banks in the country are guilty of the same offence, and there is need for proper scrutiny of the records. They all tried to out-do themselves in the tricks of the trade. This calls to questions what we define and design as banking rules and our regulation of the banking system. Are they stiff enough?  Are the rules truly applied? Are they being obeyed? Who applies them, are the examiners above board or are they compromised?

The Nigerian banking sector is in tatters and needs urgent surgery. The issue of non-performing loans currently being addressed merely focuses on one aspect of the rot in the banking sector and it says very little about the rot that has engulfed the Nigerian system. Many Nigerians banks have been the conduit-pipes for money laundering and they have been safe haven of many corrupt politicians who  stole  Nigeria's money and stacked them away, abroad. Every politician who faces the EFCC should be charged along with the bank that facilitated his/her money laundering and financial crimes. There is no public office holder who can take such huge quantity of money away without a systematic and orchestrated strategy anchored on the  officials of a bank who effect the transfer of such  monies to  banks in New York , Paris, London, Tokyo, Geneva and so on.

Many Nigerians are happy that the hammer is falling on some but they also assert that somebody will likely go and meet an Emir, Oba or Obi, or see one Governor or powerful Party chieftain or even proceed to Aso Rock so that the clean-up process is halted, if not reversed. Many have said that Sanusi may soon calm down when he sees the interests and forces that are behind those whom the axe has fallen on. Ordinary Nigerians will be disappointed should that happen. Others have said that it is envy because all those axed are “southerners” and the goal is to “retaliate” for recapitalization which saw northern entrepreneurs and bosom capitalists sidelined. The claim is that the north is under-banked as a result of re-capitalization instructed  by Charles Soludo, hence Soludo was anti-north, so the argument goes.  But such kind of claim is not healthy for Nigeria, it erodes the credibility of the good things Soludo did and legitimizes the bad things he did. Either way this is not a correct spirit or attitude. For me, I would give Sanusi a benefit of doubt, at least for now because the banking sector as is currently constituted stinks and in dire need of this type of shake up in order to instill some sanity and people’s confidence in it.

 What is happening in the banking sector should be extended to all other sectors. While others may stand by and pillory the bankers, all they need do is to put a  mirror and view their own reflection. Many aspects and sites of the Nigerian economy and public sector are in total crises. They need an urgent repair in form of surgery. It took a Sanusi Lamido to get  the bank exposed, we need more  of this type of  leadership in Nigeria today. How can we get them into position of power? That is the most critical challenge we face

There are so many  intellectuals with good leadership qualities  in Nigeria but they have not and may never be offered the opportunity to serve, because we live in a society where corruption is the measure  of how wealthy we are and the extent of our development;  instead  of being seen as the measure of our poverty and underdevelopment. To get the likes of  Sanusi to be effective or make an impact, there is need for an ethical revolution and a mental regeneration.

We must “think Nigeria First” before anything else- personal or ethnic; we must think the public good and the multitude that are without jobs and that have been sunk into irredeemable poverty.  While it is pleasant to talk about what others have done to us-corrupt foreign businessmen and women, unqualified people brought into Nigeria under expatriate quota and so on, we should also see what Nigerians have done to themselves. Is it not Nigerians who go to India and China to import chalk in place of drugs? Is it not Nigerians who collect mobilization fee and refuse to prosecute contracts? Is it not Nigerians who deny sportsmen and women their allowances at competitions?  Is it not Nigerian contractors who badly construct roads that give way to potholes in a matter of weeks and thus become death traps? Is it not Nigerians who stole monies at PHCN and facilitated the boom in Generator market? Let us examine ourselves first before we start the process of accusing external infiltrators who by all means will always be there waiting for the slightest opportunity to cause a havoc. But if there us no crack in our system, they will not find it that easy to penetrate.

As a country and as a people, we have cause to be proud, but daily we are being dishonored, disgraced and humiliated by the actions and inactions of those we entrust with power-not just political power but also economic and cultural powers. The banking sector clean-up is good, but it should go the whole hug; and the philosophy of reform should be carried to all other sectors of government and society. To sanitize the banking sector alone and   leave all other sectors will only beg the question and cause further chaos in the system. This is because in no time the rotten sectors will infect the pockets of Islands that the government is thriving to create. To the Central Bank Governor,  I will say  its too early to give kudos or shout freedom:  all I can say is that the battle has just begun.

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