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Sanusi: An opponent of change

By Oroko Asuquo

Public affairs commentators who are searching for a perfect example of an instance where opponent of change have fought back to keep the decadent status quo, but have apparently failed, then one need not look too far from the episodes playing out in the ongoing developments in the Nigerian banking sector especially with the dismissal of five erstwhile powerful bank chief executives by the Central Bank of Nigeria (CBN) for alleged clear violations of the common ethical codes governing the management of commercial banks.

Some analysts believe that why the current boss of the Central Bank of Nigeria  has done so well so far in the ongoing reforms is because of the absence of political interference in the running of the CBN.
Analysts who are positivistic in their approach to the ongoing development in the nation’s banking sector have appealed to the current hierarchy of the central bank to remain resolute and consistent so that the malaise that afflicted the nation’s banking industry will not repeat itself in such callous scale.

These set of analysts pointed to virtually all previous reforms of the central bank of Nigeria which substantially failed to stem the tide of threats of imminent bank collapse because the chief executive of the nation’s apex banking regulatory body failed to maintain the momentum of change for the betterment of the ordinary depositors and genuine investors.

Just to refresh the memories of Nigerians, the central bank of Nigeria had by the end of 1998 liquidated 31 distressed banks many of which were private-owned. An estimated 1.5 billion United States dollars in depositor’s funds, according to Akin Olaniyan, were said to have been trapped in those banks with no guarantee that all the unlucky depositors would ever be able to recover their funds. Among the several reasons advanced for the collapse of these banks, in the judgment of the then central bank’s hierarchy, as recorded by Akin Olaniyan in his book, were fraudulent and corrupt practices perpetrated by bank officials.

In June 1997, the Central Bank in a publication painted the graphic picture of the distressing situation in the nation’s banking sector thus; “revelations from the proceedings of the failed banks (recovery of debt) and financial malpractices tribunal show that they obtained loan from their banks without proper documentation and comparable collaterals. Most of those who obtained loans in that way had no intention of repaying. The onserved common practices also include the inflation of contracts, insider abuse, and the receipt of brokerage on deposits collected.”
Most right thinking Nigerians know that if the leadership of the nation’s apex bank had kept to the spirit of the reforms in the banking sector subsequent problems that afflicted the banking sector could have been avoided.

Questions are being asked why the current upsurge in decadence was allowed to repeat itself even after the central bank of Nigeria under professor Chukwuma Soludo carried out one of the most far-reaching, reforms in the banking sector.
Godson Dinneya in his book “Political Economy of democratization in Nigeria” recorded the various reform measures introduced by the immediate past central bank of Nigeria governor Professor Soludo thus;
“The appointment in July 2004, of Professor Charles Soludo, largely considered an outsider, and with no personal interests to protect in the banking sector, marked the beginning of what turned out to be a revolution in Nigeria’s financial system.” The CBN immediately embarked on a 13 point reform agenda which included, among other things, the setting of a new N25 billion (the equivalent to $185 million) capital base for deposit-money banking business in Nigeria. Before then, Nigerian banks were required to have N2billion (about $16 million) minimum capitalization.”

“Administrative and strategic machinery, including the setting up of the Financial Intelligence Unit (FIU), was put in place for strict enforcement of corporate governance rules in the banking sector”.
Could it be then that professor Soludo and the entire bureaucratic and technocratic machinery of the central bank of Nigeria went to sleep shortly after the consolidation and reforms of the banks which was why we now have in our hands major problems of monumental proportions?
The Nigerian depositors are praying that the current administration in the central bank of Nigeria will not give in to the demands of the opponents of positive change in the nation’s banking sector.

Orok Asuquo, a public affairs analysts works in Calabar, Cross River State.


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