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Danjuma: Focus on the Economy, says Renaissance Professionals

The Renaissance Professional has urged the recently set up Presidential Advisory Committee headed by Lt Gen. T Y Danjuma to focus more on the economy and asked the CBN to provide a detailed and comprehensive financial sector blueprint as a first step towards reversing current economic situation in the country.

A statement signed by Victor Shodipo on behalf of the group highlighted a six-point demand from the apex bank “said rather than the CBN Governor, Mallam Sanusi Lamido Sanusi, brandishing his controversial ‘blueprint by piecemeal’ the detailed blueprint being asked for should capture his reforms in the banking sector, his goals as well as clear targets and how it fits into the overall economic goals of the nation”.

According to the statement “Other crucial demands which form part of the group’s robust  memorandum to General Theophilus Danjuma (rtd) led Presidential Advisory Council (PAC) are, a clear strategy from Governor Sanusi Lamido Sanusi on how to get credit flowing to the real and other critical sectors of the economy once more, an imperative of critical note given the rising inflation rate (12.4% in January 2010) and lending rates amidst steep drop in capacity utilisation, money supply and credit to the private sector.

Tracing the root of the current economic problems to the controversial CBN banking reform which has weakened banks ability to lend, Renaissance Professionals argued that facilitating credit flow to the economy would require more than CBN’s current  reduction of deposit rates from two per cent to one percent for banks’ excess funds of N 600 billion with CBN.

Arguing further, “the group said it was aware that the CBN in its usual ‘blueprint by piece meal’ has floated the idea of passing some funds through Development Finance Institutions (DFIs) explaining that though the CBN Governor was not clear on how he intended to do this, it was equally aware that the Bank of Industry was already in existence and wondered whether this was not an attempt to usurp its function.

On the festering banking crisis, the group is of the view that an enduring solution lay in the apex bank doing the right thing. Consequently, it advised the Presidential Advisory Council to demand that CBN return to its core functions as a regulator of banks rather than as a regulator and manager of banks. It also demanded as a matter of urgency that: CBN should negotiate with the Board of all taken_over banks and handover their banks to them arguing that this does not in anyway stop CBN from performing its regulatory functions.

According to the group, “CBN’s role is to strengthen regulation not take over the management of banks. Who regulates the regulator when the regulator becomes management?” it asked explaining that this was the dilemma of today’s Nigerian banking sector.

Renaissance Professionals also requested PAC to demand that CBN should come out with a clear supervisory framework encompassing risk management and compliance for Nigerian Banks in order to strengthen the banking system.

The statement urged PAC to caution CBN Governor, Mallam Sanusi Lamido Sanusi on his utterances advising that he should show respect for the office of the CBN Governor”.


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