By Dele Sobowale
Behind the facts of economics are the facts of psychologyâ€¦ The emotions of fear and confidence, the judgment of doubt and certainty, constitute a very important medium through which we see economic values â€”Arthur Stowe Dewing, Harvard Business Review October 1923, Vanguard Book of Quotations, p 45.
LET me start this series with the facts on which there can be no serious dispute ore delving into areas where the GSM text punches will fly. Even disagreements are healthy for us.
At the very least they ensure that other views are heard before final decisions are made on important matters concerning our lives. On the other hand, I remember my late friend, a white racist who hated black people but, for some reason, liked me tremendously.
Joe Kowalski, an ex-Marine, 6 feet 6 inches tall with whom I, (5 feet 6 inches – even in high heel shoes) spent several Saturday nights, as a â€œtag teamâ€, crawling the night clubs of downtown Bostonâ€™s Combat Zone, in search of â€œbooze, broads (girls) and brawlsâ€, (not necessarily in that order), was a philosopher of sorts. He left the world with the eternal words that â€œThere is no dispute that a punch in the nose cannot fix.â€
And he lived his philosophy. Only God knows how many punches in the nose he delivered and endured. I would generally hold his shirt and duck under a table – only to emerge and knock someone out with a bottle on the head or jaw.
There was often blood everywhere, to which Joeâ€™s philosophical reaction was often â€œwhatâ€™s a little blood spilled between friends?â€ And a few minutes after we would be sitting and drinking with the fellow(s) we were fighting with.
If ever there was ever a spirit of â€œno permanent friends; no permanent enemies,â€ I saw it on display among those ruffians. It was a lovely time!
But, that is only a diversion to the serious business of banks. And may be it is not a digression after all.
By the time the real story of Nigerian banks have become unravelled, because they are still deliberately shrouded in mystery by the banks and the Central Bank of Nigeria, CBN, rest assured there will be a lot of blood on the floor – one only hopes and prays that it will stop only at financial blood letting.
But, let me provide the conclusion before the â€œstoryâ€ starts. Contrary to what we have been told, all is not well with some banks – including three or four which have enjoyed favourable publicity. However, as promised let us start with things we can agree on first.
Banks constitute the heart beat of the modern economy and their influence has grown in tandem with the enveloping spread of globalization.
Today, along with a countryâ€™s fiscal and monetary, as well as trade policies, which are under the purview of government, banking practices, which often transcend national borders, also define the economic wealth and health of nations. There should be no disagreement on that.
Now, when Arthur Dewing mentioned the emotion of fear – in the quotation above -Â he was talking about a variable which is seldom taken into account when discussing economic matters.
Yet, when considering Nigeriaâ€™s economy in general, and the banking sector in particular today, can we not also agree that we live in fear – not confidence?
Let me quickly illustrate with a few examples.
Even before Cross River was deprived of its oil wells, the government was already in a quandary about how to meet its obligations to the people.
Now, the only common word coming out of the mouths of leaders of that state is – chaos. But, anyone who thinks Cross River is alone in this predicament is living in a foolâ€™s paradise. Virtually, all the states of Nigeria and all the 774 local governments are in deep financial trouble.
The banks which used to lend them money – when the times were good – would no longer lend because they can read the signs of distress everywhere and because they themselves really donâ€™t have as much money as before to lend.
Yet, the banks have been making a kill out of government lending. What could be better than for a customer to deposit money with you, interest free (except for the kick-backs to the government officials), only to turn around and borrow the same amount at 30 per cent.
Now, the â€œprodigal sonsâ€ donâ€™t have the money with which this internal round-tripping is done. As they say in Godâ€™s own country – â€œthe party is overâ€. The governments now live in fear; the banks also operate in fear.
Oil producing companies used to be the first choice of the brightest and the best graduates – even if posted to Niger Delta. Today, everybody connected with the sector lives in perpetual fear (of kidnapping, assassination, collateral destruction, pyromaniacs, arsonists, 419ers, JTF, militants, politicians etc) – from the chief executives to the chief janitor.
As for the insurance companies associated with oil companies, one chief executive summed up their predicaments. â€œThey give us good money such as we canâ€™t get elsewhere. But, I canâ€™t sleep anymore. Militants can in one day wipe us out.â€
Now, even a child knows that fear and increasing investment – like oil and water – donâ€™t mix. So out of fear, investors now regard Angola and Ghana as better destinations for their foreign direct investment.
The funds which should be available to grow the Nigerian economy and sustain our mega-banks are not forthcoming in the quantum we need for our future.
The bankers know this, the oil sector executives know this – in short everyone is afraid for the future because of the catalogue of fears now plaguing the land.
Pensioners, when they have not died waiting for their entitlements, are scared.
They are frightened because what they were promised would be monthly payments have become quarterly or bi-annual payments.
Even then, the punishment they receive before collecting their pittance is indescribable – no food, no medical care, rags on shoulders; drinking from the well of sorrow in a land flowing literally with money.
Yet, billions of naira flow into the economic system through the old people we have decided to treat with the indignity they donâ€™t deserve. But, the joke is on us.
The money they donâ€™t receive on time will also not be available to oil the wheels of economic progress; it is the younger ones who will suffer more of the consequences later.
Manufacturers are alarmed; the Nigerian employees of multi-nationals now live in mortal fear that their jobs may be relocated to Ghana; where, naturally, Ghanaians will be preferred candidates.
The de-industrialisation of Nigeria, which had gathered pace will swell the unemployment market to an unprecedented level.
For those over 40, there might be no future employment. And when the factory closes, the pay cheques stop, the bank accounts will eventually read zero or debit. So, who here is not afraid?