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Economic Czarism and its consequences – 7

With Dele Sobowale


Some of your avid readers are troubled. They want to know your take about the proposed Islamic Banking. Why have you remained silent?” Frank Eghomien.


One major problem we have in this country is that our leaders don’t often think before taking certain decisions. What’s the point closing banks’ offsite ATM posts and turning around to ok such? What about the attendant cost of this wrong policy of Sanusi? Is he confused?” James. Delta State.


Pls what is this non interest banking involving sharing of profit/loss aka Islamic Banking. It sounds too good to be true…” Uzoho A U.

One of the greatest puzzles for banking historians of the future to unravel will be answering the question: How did Sanusi Lamido rise to become the Managing Director of the First Bank and from there got catapulted to the position of the Governor of Central Bank of Nigeria, CBN? The reasons for the mystery are not difficult to discover.

Sanusi Lamido

For an organization over 120 years old in Nigeria, First Bank, originally operating as Bank of British West Africa, BBWA, had carved for itself an image of a conservative bank whose Managing Directors were invariably team players; competent professionals but not given to making waves.

Their impact was felt but they were seldom heard; and when taking a position they made their views known in the most diplomatic language possible.

The first question the contemporary analyst finds himself asking about Sanusi is: has the man always been as controversial as he has been since becoming Governor of CBN or has power corrupted the man?

If he remains true to himself, how then did he emerge as Chief Executive Officer of a quintessentially conservative bank like First Bank? Could it be that, at the time the decision was made, Yar’Adua was President and nobody thought he would not live long enough to contest for the second term?

And, that being the case, Sanusi, as the only Northern CEO of a leading bank, would make it easier to obtain Federal government and state governments patronage –which is always considerable?

Answers to these questions are pertinent because they will assist us in understanding the mounting controversies trailing every policy statement of the CBN governor. Sanusi is now guaranteed to ignite controversy simply by saying “good morning” at 7 a.m.

For the leading monetary policy maker, by statute, this is an unfortunate situation in which a central banker has placed himself. Again, this is for reasons that are not too difficult to understand.

The primary mandates of the monetary policy manager – exchange and interest rates control, as well as, maintaining full employment, are not goals which can be achieved all by one person. Under the best of circumstances (and this is far from the most propitious period in our history) he needs the active cooperation of those in the Executive branch charged with formulation of fiscal policy, the President being the first one.

Then, he needs the to carry along the legislature, in this case the National Assembly, NASS, as well as several other major stakeholders in the economy. These include NLC and Unions, the Nigerian Stock Exchange, Foreign and Domestic Investors, Employers of Labour and the banks – without which all efforts will come to nothing. In a heterogeneous society like ours, he will also be well advised to actively court the support of several social, religious and political power blocks – for obvious reasons.

No economic policy, however brilliant, can succeed if all it depends upon are the force of law – which the CBN has in many instances and the good intentions of the policy maker as well as passive acceptance by a resentful citizenry. Policies are made for people and not people for policies.

Only by bearing that in mind can the CBN be able to place people at the centre of its policies aimed at economic development. Right now, it is doubtful if people are considered at all.

The second text message draws attention to another one of the unending policy reversals which have plagued economic policy making since the military took over in 1966.

Prior to that calamity, which has consumed nearly two generations of Nigerians, policies are debated robustly in parliament before the announcement and inputs were sought and received from many contributors. Seldom were they altered so soon after the announcement as the directives to banks on off-site ATM machines.

The CBN has eight moribund banks on its hands, yet it has subjected these banks as well as others to the expensive process of closing off-site ATM machines, only to turn around and approve their installation in order to accommodate the new cash withdrawal limits recently announced.

This is abuse of power of the worst kind unless the CBN is prepared to bear the cost of this policy reversal. Yet, closure or establishment of ATM machines is not just a matter of cash withdrawal. For people in many communities, badly served by banks, those machines constitute the literal life-blood of millions of Nigerians.

More to the point, does the CBN really expect banks to again rush to install new ATM machines when its own track record demonstrates that they could again be asked to close them? Before anybody at the CBN answers that it cannot happen, let me remind them that Toll Gates on Nigeria’s highways have been installed and demolished twice; each time with reasons.

Right now, if Bi-Courtney succeeds in re-constructing the Lagos-Ibadan Expressway, they will be back for the third time. It is bad enough for “public” money to be spent by officials like drunken sailors on shore leave, it is worse when the monetary policy maker is forcing private investors to waste their funds so recklessly as the CBN has done with ATMs.

Now that leads to the two other text messages. Readers will pardon me for combining the two. But, the two issues have added new threads to an emerging tapestry indicating the management style of the Central Bank governor – who started very well.

Increasingly, what is emerging is a lone ranger in a job requiring a masterful team player. The Non-Interest Banking or Islamic Banking is another instance which should teach Sanusi a strong lesson: A man alone, in government, hasn’t got a chance of succeeding.

On account of his inept handling of the matter, he has poisoned the atmosphere for what is rapidly becoming a major source of Foreign Direct Investment, FDI – if handled with greatest care.

That Dr Iweala-Okonjo holds the same view is only a mere coincidence. It can help us; but first we need the strict laws that will ensure it does not inexorably lead us to religious conflict. The way Sanusi has handled the matter, we are already at daggers drawn – unnecessarily.


1. 0805-204-5674

CBN CZARISM: You should be made Economic Adviser to the President for this country to move forward. Bonny.

2. 0703-694-7725

There is no greater betrayal of public trust than “governing in ways that compound mass ignorance, insecurity and polarities in living standards”. Against this measure, the leader to save Nigeria has never been a candidate in a Presidential election nor come close to making a successful coup d’etat. Until that happens, election victory will remain a by-product of the mandate of morons.

If every Newspaper in Nigeria had at least one columnist as intensely objective as Dele Sobowale, journalism would have to a significant extent, mitigated the decadence in the governance system.

Chimdindu Osuagwu.


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