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Banking sector reform not Northern agenda, says Presidency

*Says Sanusi action is yielding positive results

*Yar’Adua returns Tuesday

By Daniel Idonor
THE Presidency Monday rose in strong defence of the new reform initiated by the Central Bank of Nigeria (CBN) for the country’s banking sectors; declaring that the ongoing reforms is aimed at salvaging the sector from imminent collapse, and not to promote so-called northern agenda as perceived in some quarters.

The Presidency said it is not unaware of a possible shock and hiccups with the reform by the CBN which may trigger some negative actions from those affected, including very powerful interests like in the days of Soludo’s consolidation, but warned that neither the President nor the government would be move by such actions.

After one week trip to Saudi Arabia for scheduled medical check-up and the performance of the lesser hajj, which began since Friday, 14th of August, 2009, President Umaru Yar’Adua is expected in Abuja Tuesday.

CBN Gov Sanusi Lamido  and President Yar’Adua
CBN Gov Sanusi Lamido and President Yar’Adua

Presidential Spokesman, Mr Olusegun Adeniyi, who fielded questions from State House Correspondents, on feelings in some quarters that the reform is targeted at weakening the existing stronghold of the southern part of the country on the economy, stated that it is laughable for anyone to hold such opinion.

“I am aware there will be a few initial shocks and hiccups with Sanusi’s reform like it happened during Soludo’s consolidation exercise and that those affected will fight back and we are talking of very powerful vested interests here. But the President is convinced it is the right course of action by the CBN to avert what could turn out to be a national catastrophe in the financial sector and that is why Sanusi has his unwavering support”, he said.

He explained that if the recent action of the apex bank was targeted at undoing the southern part of the country through the promotion of a northern agenda, the same CBN would not have resorted to empowering the banks pumping over N42 billion to save them from collapsing.

“When people don’t want to address the real issues in Nigeria, they resort to cheap talk about some Northern or Southern agenda; are you saying that these bankers were distributing their money with southerners? I recall that when Prof. Chukwuma Soludo came up with Banking Consolidation in 2004, there was also an outcry by some bankers who were losing out with the campaign that Soludo was pursuing Igbo agenda. But looking back today, assuming Soludo had not consolidated the banks then, we would not even be talking of any banking sector today”, he affirmed.

Adeniyi stressed that “to come back to the point, if we were to assume Sanusi took the action he did in promotion of a so-called Northern agenda, then we should ask some questions: why would CBN pump in about N42 billion to bail out the five banks owned by people we have identified not as Nigerians but Southerners? Why would he appoint Southerners to replace the ones he removed? Why would he use our collective wealth as a nation to stabilize the savings of people who, if we buy the current argument, are Southerners?”

While advising Nigerians to “focus on the real issues”, he stated that the ongoing reforms “is a national agenda in the interest of depositors whichever part of the country they come from because we cannot continue to live a lie. Nobody has disapproved the fact that there were serious holes in those five banks and in any case, it was already common knowledge that at least three of those3 banks were in serious crises before Sanusi move in so what are these people talking about?”

He disclosed that the federal government was comfortable with the Sanusi led reforms ande urged Nigerians to cooperate with him and the new management team already put in place; saying that “I think Sanusi’s intervention is already yielding positive results”.

“On my way to Lagos last week to attend Prince Tony Momoh’s 70th birthday book launch I sat with a prominent bank chief who said that all the big debtors in most of our banks who had hitherto refused to honour their obligations had started paying back. That this the way it should be, you don’t collect loans from banks and begin to live as if you just won lottery.

According to him, the action of the affected bankers should be considered as fraud, asking that “If that is not fraud what is it since the bankers were quite aware that the money they were giving out so casually and irresponsibly is the life savings of some people?”

He explained that “you and I know how difficult it is for any businessman with brilliant ideas to secure a loan of between N1 million and ten million naira from our banks and I can speak from the experience of several friends. Yet some fat cats will walk into these same banks and collect billions of Naira on the basis of man-know-man without any form of security.

“Please don’t get me wrong, I am not saying it is wrong to borrow from banks but when you borrow money from the bank, you must realize there is a corresponding responsibility to pay back. The management of our banks must also recognize that the deposits in their vaults are held in trust”, he stressed.

On the President’s trip to Saudi Arabia and his expected return, Mr Adeniyi said “Yes, the President returns tomorrow (today) having completed his medical checks early last week before performing the Umrah”.


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