August 22, 2009
Now that the initial euphoria of Hurricane Sanusi – the Tsunami that blew away the Chief Executives of 5 major banks in Nigeria, and exposed the nyash of Nigerian billionaires, political and business men of timber and calibre as mere debtors - has blown over, it is now time to sit back and reflect on the terrible consequences of Sanusi’s hasty action on the Nigeria financial market and ask sanusi a few questions.
While Nigerians are generally happy that action are being taken to clear the rot in the banking sector, yet some are asking: Why would Sanusi rush to take action against 5 banks when the auditing of the remaining 14 banks is still ongoing?
On Sunday June 28, 2009, LEADERSHIP Newspaper reported that the managing directors of 5 Nigerian major banks, “led by a Delta State-born Igbo-speaking boss of a first generation bank that is also one of the biggest banks in Africa, were said to have raised the slush fund of N2.5 billion to lobby President Yar’adua not to appoint Sanusi as Central Bank Governor; Is Sanusi Lamido Sanusi on a vendetta against this “Delta State-born Igbo-speaking boss” and her cohorts for leading the campaign against his candidacy?
On March 23, 2009, under an article Group Plots Takeover of Five Top Banks; The VANGUARD Newspapers reported that ANTI-CONSOLIDATION forces have regrouped with the hope of dismantling the structures and forcing a takeover of the top five banks (The number 5 again!). The grand plan by the group, Vanguard said, is to cause panic and uncertainty in the industry and make the target banks look unsafe for depositors. Is this Sanusi’s agenda?
In the same article, Vanguard says that the group at work is made up of former bank owners who lost out during the consolidation exercise, a powerful clique in the present government, and some aggrieved persons in three of the six geopolitical zones in the country who felt left out in the consolidation exercise, Further, they ultimately plan to instigate government to take equity holdings in the targeted banks.
Now that Sanusi by injecting N400 Billion into 5 banks took equity holdings in the targeted banks, I wonder!
On August 4, Sanusi Lamido Sanusi in a certain telephone conversation said: “the removal of any bank’s board and its management would not in any way solve the systemic problems in the banking sector, and that the CBN’s immediate concern was on how to institute measures that would ensure that the banks are healthy and can meet minimum capital and liquidity ratio requirements to perform their primary role of intermediation at interest rates that do no emasculate the lending public”. What changed between August 4, and August 14?
The big question for those that know Sanusi-or those that thought they knew him- is: Who pushed him to act different from the viewpoint he expressed barely ten days earlier?
Seeing the terrible repercussions on the Nigerian economy – the depreciated value of the Naira, freezing of foreign credit line, Standard & Poor's yesterday cut of Nigeria’s sovereign credit ratings by a notch to B-plus from BB-minus - Was Sanusi properly briefed on the effect his action would have on investor’s confidence on our economy and its banking system? Finally, was due process followed in sacking the bank bosses?
Now that Sanusi has indicated no more bank bosses will be sacked no matter the findings of the result of the audit of the remaining ten banks; wouldn’t this give credence to the argument that the reserve bank by acting on the basis of CBN auditors’ findings to remove the board and management of 5 bank when it had not even had time to assess the findings of the audit report, nor finished the auditing of the remaining 14 banks were working to an answer; Why would Sanusi rush to take action against 5 banks when the auditing of the remaining 14 banks is still ongoing?
Sanusi in an interview yesterday in Kinshasa where he’s attending a conference of African central bankers said tiven what’s happening with oil prices and the improvements with peace in the Niger Delta”, we should not fear the current terrible outcomes of his hast action.
But in view of the declaration yesterday by the Movement for the Emancipation of the Niger Delta (MEND), that they will be compelled to resume with ferocious attacks on the oil industry at the end of their ceasefire on September 15, 2009 is Sanusi not being overly optimistic?
In my article elsewhere, I wrote:
It is important to separate the multifaceted actions taken this week by Sanusi and analyse each on its merit rather than lumping them together. In this way, we could then analyse his decision to sack the bank bosses clear-eyed and devoid of emotion:
Sanusi’s actions were threefold; Firstly, sacking of the Bank executives, releasing what CBN’s examiners unravelled following the audit exercise; secondly, releasing the names of Billionaire debtors that brought down the 5 Nigerian Banks and the details of their account, and: thirdly, handing them over to the EFCC for arrest and possible prosecution.
As one CEO stressed: "it would be uncharacteristic for the CBN to remove the boards and management of financial institutions without meeting them and informing them of the infractions they had committed, be it under the Banks and Other Financial Institutions Act (BOFIA) or the CBN Act.
The rule of thumb is that they must be informed and are always instructed to rectify the infractions (including recapitalising the banks, where necessary), failing which the CBN can decide to impose whatever sanctions it deems necessary”.
Why is Sanusi trying to destroy the bank confidence built up by the era of consolidation, complicated matters and harmed the economy?
Nigerians must be watchful. We have often been witnesses of Public officials cloth selfish group interests as national interest. The CBN is entitled to sanitise the banking sector, and ensure bank customers conform to banking rules and regulations.
Rather than premature praise singing, it is time Nigerians begins to assert themselves and hold up our public officials to public scrutiny. Our problem is that we don’t hold these men to account.
The fact is; for good or for ill, Sanusi is now there as the governor of the Central Bank of the Federal Republic of Nigeria, the custodian of our commonwealth; so that whatever he does impacts and is reflected on you and me.
Same goes for other public officials; it is only by holding their feet to the fire will we make sure they are NOT carrying out a hidden agenda that is inimical to both your interest and mine.
I have also written elsewhere that this is the type of aggressive approach we should bring to bear on examining our public officers.
Sanusi and the CBN must go the whole hog for full disclosures on the remaining Banks. The procedures now begun should run their full course. The regulatory, supervisory and law enforcement authorities must work to contain the hypocrisy in the financial sector. The implications of non-conclusion of these initiatives will be horrendous.
Mr. Sanusi had assured the nation that the process is far from over as many more banks' books are still under examination. Nigerians await his findings. Due process and fairness must be adhered to.
His appointment as govertnor of the CBN heralded much promise to the Nation, Over the years, some of the personnel that have been appointed to Nigeria's elevated position of Central Bank governorship left reputable legacies but many – the majority, had a disastrous tenure. Sanusi must not be allowed to thread that ignoble path.
Daniel Elombah Publishes www.elombah.com
[email protected]
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