BY EMMANUEL AZIKEN
Despite his best efforts in sounding apolitical and dissuading skeptics of his alleged religious fundamentalism, there is little debate that Mallam Lamido Sanusi, the Governor of the Central Bank of Nigeria, CBN may have become the most divisive personality in the country today. He is also potentially, the greatest risk to the President’s transformation agenda. After all, any organization that has its treasurer shooting and destroying the way Nigeria’s CBN Governor does is not bound to have a healthy balance sheet.
The two most controversial policies of Governor Sanusi, the sacking of crooked bankers and the introduction of non-interest banking may not have been overtly dubious. The process of recovering the ill-gotten wealth of the bank chiefs and the corresponding effort to salvage the banks were at conception apparently well intended for the common good.
However, two years after Mallam Sanusi sacked the executives of five banks he claimed to have mismanaged their banks and replaced them with his carefully selected brood of rescue managers the wisdom of Mallam Sanusi’s efforts have now come into serious question. Along with the additional three banks that were enlisted as troubled, the CBN rescue package for the banks under Sanusi has cost the nation more than N1.2 trillion. That is the cost in direct intervention by the CBN.
Other costs to the economy include more than 10,000 direct job losses in the banks and the unquantifiable multiple of job losses in related sectors. It is also a known fact that as a result of the Hurricane Sanusi factor that bank lending and other bank mediations of the economy have almost come to a standstill as bankers watch their back.
It is even more worrisome that the rescue managers appointed by Sanusi in some cases did not manage the banks with the kind of prudence as would have been expected of caretakers of supposedly ill-organisations. Reports of some of the rescue managers paying themselves fantabulous allowances have been made. In one case, a rescue executive in one of the sick banks after spending only three months on the rescue job paid himself an enhanced leave allowance! Some others used the funds of the sick banks to purchase bullet proof limousines.
That the CBN Governor two years after the crisis was instigated is yet to successfully resolve the supposed financial crises in any of the so-called rescued banks despite the huge cost in monetary and other opportunity costs brings to question Mallam Sanusi’s approach. The approach of appointing retired bankers even if with professional and other credible pedigrees is even the butt of criticisms.
The rapid advancement of banking solutions means that any one of those retired but credible experts engaged by Sanusi would have been out of touch even if it is just one year after retiring. Bringing in such grandees to salvage the allegedly ill banks was an error of judgment.
The other point of controversy that has been stirred by Sanusi is the introduction of non-interest banking. It is no secret that the legal framework for the introduction of non-interest banking was conceived by Sanusi’s predecessor, Prof. Charles Soludo. Indeed, that is about one of the good things I know that Sanusi has even credited Soludo’s tenure with.
But what should ordinarily have been a quiet and harmless banking product has now been steered into controversy with Sanusi’s seeming bravado of forcing “Islamic Banking” down our throats. Whatever point he wants to score he has undeniably scored it with his new fame as the banking Sheikh who has come to the aid of the Islamic Faithful.
I hear that the original concept of non-interest banking conceived by the Soludo CBN may now have been tempered to give some religious content. That fact is yet to be fully ascertained. But what is certain is that the controversy has been caused by the flippancy of the CBN Governor. Central Bank Governors as custodians of our commonwealth should not be seen as flippant. Indeed, bankers are known for their conservative streak even with their mouths.
When on April 27, 2011 the Chairman of the United States Federal Reserve, Ben Bernanke addressed a press conference it was the first time in the history of the 98 year history of the United States Central Bank that that country’s Central Bank Governor would address a press conference.
The lesson for Sanusi is that his actions should be seen in turning our fortunes for good and should not be heard. We have heard enough from the CBN Governor, he should sit down to work for the good of all.