By Emmanuel Ujah
The Federal Government has stated that it would only nationalize troubled banks that fail to recapitalize as a last resort. A statement by the Special Assistant (Communication) to the Minister of Finance, Ms Deborah Okafor, clarified the position of government, in Abuja yesterday, stating that both the Finance Minister, Dr. Mansur Muhtar, and the Central BankÂ ofÂ Â Nigeria (CBN) Governor, Mr. Sanusi Lamido Sanusi, are in agreement on this decision.
According to Okafor, what the Federal Government intends to do is to buy the shares of any of the affected banks that is unable to recapitalize and sell it to the public within the shortest possible time.
The text of the statement reads: â€œWe have noted in aÂ recent media reports with respect to the Federal Ministry of Finance and Central Bank of Nigeria sending discordant tunes in relation to governmentâ€™s strategy for restructuring and strengthening the banking system.
One area that has been mentioned in such media reports is that the Federal Ministry ofÂ Finance supports the nationalisation of banks, while the Central Bank of Nigeria is opposed to such intervention.
â€œIt is extremely important to reiterate governmentâ€™s position on this issue.
Governmentâ€™s policy position with regard to the restructuring ofÂ banks, as enunciated by the Honourable Minister of Finance â€“ Dr Mansur Muhtar and Governor of the Central Bank ofÂ Â Nigeria â€“ Alhaji Sanusi Lamido Sanusi, during the Annual Meetings of the International Monetary Fund and World Bank Group, is that in the event that some of the affected banks are unable to recapitalize and successfully go through a merger and acquisition exercise, the Government may acquire shares in such banks, if they are deemed systemically important.
Thereafter, Government equity will be sold at the earliest possible opportunity.
â€œSuccessful bank restructuring entails preserving the payment system, assuring that there are functioning banks, and that the residual troubled assets are managed and disposed appropriately.
We would like to emphasize that the Federal Ministry of Finance and the Central Bank of Nigeria would be guided by these three objectives in the on-going exercise of building confidence in our banking sector as well as ensuring that it is safe, sound and transparent.
â€œAs pointed out by the Honourable Minister of Finance in different fora, both the Minister of Finance and the Governor of CBN have had various productive meetings on the issues facing the banking sector. The Federal Ministry of Finance and the Central bank of Nigeria are coordinating efforts with a view to ensuring that our banks become more resilient and sound.
â€œThe institutional framework for coordination among regulatory agencies under the Financial Sector Regulations Coordination Committee (FRSC) is being strengthened. On different occasions, the Honourable Minister of Finance had mentioned the strong endorsement by the government of the actions taken by the Central Bank of Nigeria to restore confidence in the system.
â€œWe would like to reiterate the commitment of the Federal Ministry of Finance and the Central Bank of Nigeria to working together towards strengthening the banking system so as to ensure that it continues to contribute to the development of our economyâ€.