THE Recent parley between Mr. Lamido Sanusi and the House of Representatives Committee on Banking and Currency might have come and gone, but it left a lot of questions unanswered about both parities. That the CBNÂ governor floored the lawmakers in the opinion of some, have reflected how shallow Nigerians understand the tenets of the 1999 constitution.
CHARLES KUMOLU reports.
PERHAPS the worst and the best is yet to come, as it relates to the ongoing reforms in the banking sector. That everyday pops up scaring revelations about the
mess in the sector, is largely eroding public confidence on the banks. Though the five sacked bank chiefs are the major casualties of the current Banking Sector Reforms, given their unprecedented fall from boardroom to court room, the Governor of Central Bank of Nigeria, CBN, Mr. Lamido Sanusi, is not exempted from the heat of the crisis.
Unfolding events, have not helped the apex bank governor either, as he is continuously being lampooned in some quarters.
Suspicions have come to shape whichever move he makes lately. The mixed feelings and the weight of condemnation, trailing the manner theÂ current exercise is beingÂ handled, appears to be making Sanusi a tragic hero. This weakness that is reducing the initial support for the reforms, is believed to be hinged on the manner CBN is handling the issue with out regard to due process.
Nonetheless, issues like the proposed sale of the five banks to foreign investors, the publication andÂ arrest of debtors among others, have not stopped questions like: In whose interest is Sanusi working?
The prominence that the question is getting by the day, seems to be justifyingÂ earlier reports by Vanguard Newspapers on the plot to take over five banks. Aside the alleged group interest to the issue, the constitutional questions surrounding the reforms, appears to be making a victim out of the CBN governor.
If the group interest side of the story, can be linked to the usual way sentiments are attached to government policies, the injection of four hundred and twenty billion into the ailing banks without legislative approval, seems to have become an albatross to the CBN boss.
It will be recalled that the House had summoned the apex bank chief, to explain the source of the four hundred and twenty billion bailout package to the banks.
The letter summoning the CBN boss, signed by the clerk of the committee James Obotu,Â CBN governor is expected to shed more light on the best way to arrest the situation and explain the reason behind his denial to take the issue to the National Assembly before embarking on the reform.
The summon, however raised a lot of expectations among different folks. For those, who alleged that the !999 constitution was defied, the sitting was expected to be Sanusiâ€™s baptism of fire. Others who donâ€™t share that view, expected to the contrary.
â€œWe challenge the CBN Governor to refer this Committee to any section of the Constitution of the Federal Republic of Nigeria which grants the CBN any special exemption from the binding effect of the constitution. The CBN Act cannot supersede the constitution and therefore any action taken pursuant to the CBN Act that is inconsistent with the provision of the constitution is null and void; ineffective and of no effect whatsoever,â€Chairman of Budget and Finance Committee, Hon. Ogbuefi Ozomgbachi
Whether Sanusiâ€™s revelations exposed the depth of the lawmakers knowledge, have left many tongues wagging. â€œthe reinforcing provisions of Section 42 (2) of the CBN Act allows CBN to inject capital into any bank facing liquidity problems by way of loans and other accommodation facilities on terms it deems fit, notwithstanding the restrictions imposed by Sections 29 (1) and 34(d) of CBN Act.
â€œThus, the injection of capital into the five banks, being by way of Tier 2 Capital, which is lending, is perfectly within the ambit of section 29 (1) and 42 of the CBN Act, â€the CBN boss noted to the chagrin of the lawmakers.
As the constitution was put to test at the sitting, Sanusi came out unruffled in the eyes of many but quickly changed the facility from bailout to loan. The outcome, however left questions on whether the lawmakers and SanusiÂ actually understood the tenets of the constitution.
Speaking to Vanguard on the matter, a member of the Federal House of Representatives, Mr. Halims Agoda, disclosed that what the house committee on banking and Finance did is not out of context, saying that the committee is obliged to know why the CBN took its action.
Agoda, Who represents Ethiope federal constituency, stated the question of wether the house did its homework well before inviting Sanusi, should not arise, stressing that given the magnitude of the issue at hand, the House was expected to intervene.
â€œI am not a court to interpret on the legality of Sanusiâ€™s action. But given the magnitude of what is happening, it is not out of context that the Committee intervened. The issue should not be looked from wether the House does not do its job well. Rather it should be seen that the committee did what was expected of it,â€ Agoda told Vanguard.
Continuing, he said, â€œIt is the responsibility of the House to know why the CBN did what it did, the way and manner he is going about it and what he intends to achieve with it. So people should leave courts to interpret the legality.â€
A Lawyer and Senior Advocate of Nigeria,SAN, Chief Emeka Ngige, shares almost a similar view with Agoda. â€œAnybody who feel it is not in contrast with the constitution, should go to the court and challenge it,â€he stated. Speaking in line with the believe in most quarters that Sanusi floored the lawmakers, Ngige argued that CBN Governor is perfectly correct in his defense of his actions.
According to him, â€œThe governor is perfectly correct in his defense. The funds he injected is not from consolidated revenue. It is from CBNâ€™s share fund.â€
The legal practitioner, who is a Senior Advocate of Nigeria, SAN, further disclosed that what the CBN did is like what the Nigerian Deposit Insurance Coportation, NDIC, can do, saying that the action is within the ambits of the law.
â€œAnd the bank has the power to do that. What the bank did, is just like what NDIC can do. When they discover that the liquidity ratio of banks is not much, they have the powers to act in order to save the banks from being distressed. They are empowered by the CBN act and other laws to grant loans and advances to the banks. So what is wrong with what CBN governor did?â€ Ngige, who was a counsel to former Vice President Atiku Abubakar, argued.
Further investigations, authoritatively revealed the unfolding drama about the crisis, has created crisis of confidence in the polity. In order to restore this eroding confidence, President and Chairman of Council of Nigerian Institute of Management, Mr. Peter Edeoghon argued that the CBN needs to be cautious on the issue or perhaps come up with a different way of replacing the management of the banks.
â€œBut I will suggest that instead of sacking the management, they would have made them to go on voluntary resignation. There is a lot to be done to restore peoples confidence. You know a lot of meanings are being read into it.
Edeoghon, however regretted that the issue has been hijacked by the press, a situation he believes will not be too healthy for the ongoing reforms. â€œIt is a two plumb thing. The CBN action, seems to be right in as much as it will save the banking industry from imminent collapse. It is a right regulatory decision. But I donâ€™t think they are managing the issue properly because they have left it to the press. And the press have hijacked it. Issues like this are not supposed to be left to be degenerating like this,â€ the NIM President stated.
The NIM boss, whose institute is involve with the training ofÂ managers and other corporate executives, further suggested the need to have a policy that will make banking activities transparent.
With this initiative, he maintained that the public willÂ knowÂ Â whether the banks are sinking at any time.
â€œSo, there is need for confidence building. If there is need for trial or others measures, they should follow due process. The courts should be allowed to determine if there are criminals elements in the banks. What is missing is the absence of banking transparency initiative like it is done in other countries.Â That policy should be put in place in order to allow people know what is happening in the banks,â€ Edeoghon submmited.
In the eyes of the law
Instructively, SectionÂ 80 (1) of the 1999 Constitution states that, â€œAll revenues or other monies raised or received by the Federation (not being revenues or other monies payable under this constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation.â€
Sub-section 2 of Section 80 further said, â€œNo moneys shall be withdrawn from the Consolidation Revenue Fund of the Federation except to meet expenditure that is charged upon the fund by this constitution or where the issue of those moneys has been authorised by an Appropriation Act, Supplementary Appropriation Act or an Act passed in pursuance of section 81 of the constitution.â€