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FG worries over CBN reforms…laments effect on economy

By Charles Kumolu

THE Federal Government appears to be worried over the reforms introduced by  Governor of the Central Bank of Nigeria, CBN,  Sanusi Lamido Sanusi, as Presidency sources said the reforms have had devastating effects on the economy.

A source in the Presidency, told Vanguard that the Acting President, Dr Goodluck Jonathan has continued to receive reports indicating that the policy introduced by Sanusi is strangling Nigerian banks and in effect devastating the nation’s economy.

Apart from about 23, 000 workers who are said to have lost their jobs in the banks since October last year, Nigerian investors, importers and manufacturers are said to be suffering because banks are no longer granting loans and other facilities that would help them carry on with their businesses.

Although government is said to be aware as well as worried over these developments in the past few months, latest report which shows that core investors in the Nigerian economy are now seeking for loans from foreign banks and other financial bodies was said to be responsible for government’s desperation to find a quick solution to the problem created by the CBN Governor.

Government is said to be considering the option of sacking Sanusi as a way to restore confidence in the system and has started making consultations with the National Assembly leadership on how to carry out the plan.

One of the companies that has been hardly hit by the Sanusi’s reforms is Dangote Group which may be considered the highest single private employer of labour in the country.

Dangote is said to have  approached Standard Bank of South Africa for a loan of US$350million to enable it attend to pressing financial needs, an action which was said to have made Acting President, Goodluck Jonathan comfortable.

Following the approach of Sanusi, who also got the Economic and Financial Crimes Commission, EFCC, to begin to harass and even threaten to arrest companies and individuals who obtained facilities from banks, Dangote Group was said to have been forced to hurriedly source for US$1.27billion which it used to settle loans it took from a consortium of 10 banks in Nigeria, even though the loans were supposed to be due for repayment by 2015. 

After making such huge payment that was not envisaged, Dangote Group is said to be facing some financial challenges in its determination to erect cement companies in Ibese, Ogun State and Senegal as well as its expansion drive and prosecution of on- going projects at Obajana Cement Company.

The publications made by the CBN last year of companies and individuals that are indebted to Nigeria banks and the ways the matter was dramatised had made the Dangote Group to source for the loan to avoid public ridicule, even though CBN did not disclose that the loan was not yet due for repayment but rather listed it as unserviceable and thereby criminalising such transactions.

Apart from Dangote, many other companies are said to be seeking for facilities from banks outside the country. Another example is Eternal Oil which is said to have asked the Japanese Bond Market for a loan of N1.2billion.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.