By Akoma Chinweoke
An economist and president of   the Academy  for Entrepreneurial Studies, Dr Ausbeth   Ajagu said that the only way the country can restore confidence and ensure sustainable stability in its financial sector is for the regulatory authorities to constantly be on guard against the financial recklessness and indiscretion in the system that brought the sector to it’s present low position.

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Ajagu in an interview said the problem with the Nigeria system was not absence of rules or policies but execution or implementation of the rules and policies.

“Right now, the CBN is doing its best to put the banking sector on the path of order and rectitude. We hope that it is sustained over a long period of time. Because what we often witness is that after the initial burst of enthusiasm and when all attention is shifted away from the sector, the regulatory authorities will relax their watch and it will be back to, business as usual.

Some people are good at circumventing rule or keeping them in breach so you need to constantly be on guard to rein them back on line.
The CBN, for instance, has really put in place measures, amongst which is the ceiling on the tenure of bank MDs, but whether these measures are enough to stem a recurrence of the malpractices witnessed is left to be seen.”
The AES president  who is also a member of the National Technical Working Groups of the Vision 20:2020, commended the CBN for scaling down the interest rate to a single digit but added that the apex bank needs to go a step further to direct that certain percentage of the banks total credits be dedicated to growing the real sector of the economy..

“It is sad that we operate a system where the banks are not really contributing to the growth of the economy as much as they should. That is why we have a situation where the banks will be declaring multi-billion naira profit and the effect will not be felt by the economy. The banks prefer short-term loans to the manufacturing sector even with the attendant risk.