By Emeka Mamah
Kaduna — Governor of Central Bank of Nigeria, CBN, Malam Sanusi Lamido Sanusi, says unfavourable competition arising from the World Trade Organisation Treaty is responsible for the collapse of industries in the country.

According to him, “no country in the world can survive industrially with such an unfavourable competition and I have been having this argument with the World Bank and IMF in New York and we cannot accept such unfavourable competition.”

The CBN boss spoke in a lecture he delivered  at the 2010 annual dinner organised by the Banking and Finance Trade Group of the Kaduna Chamber of Commerce, Industries, Mines and Agriculture, KADCCIMA.

In the lecture entitled, “Recent Developments in the Financial Sector of the Nigerian Economy,” Sanusi insisted that concrete steps must be taken to protect local industries from such hostile competitions from foreign products if the dream of reviving local industries and creating employment opportunities are to be realised.

“In those days, the British protected their markets with gun boats. Today, everybody, including the World Bank and IMF, is using Malaysia as a model, but their leader was vilified when he refused to accept such conditions in those days.

“African countries in general and Nigeria in particular must learn from the experience of the Asian countries which took their destinies in their own hands when it mattered most and today, they are major players in world economy and they are being referred to as the Asian Tigers.

“We export cotton to other countries and import fabrics from China. If we put those cotton in our textile industries, they will produce and we will create job opportunities. We export crude oil and import petroleum products. Is that not an irony?

“No economy has ever developed through dependence on primary products. There is no way primary and manufactured products can compete on equal terms under the existing terms.

“Nigeria must learn to pay more attention to agriculture as a way of developing the economy because, while agriculture contributes about 46 per cent of the country’s GDP, it attracts only one per cent of bank lending.

“The nation’s industries, particularly the agricultural sector cannot attain the desired growth until genuine efforts are made to go beyond primary production and subsistence levels and there must be urgent actions on value_chain production strategy whereby considerable income and employment are generated at every stage which will result in sustainable growth.

“The CBN is not going beyond its mandate since is no way a Central Bank in a developing economy can restrict itself to monetary policy functions only while critical infrastructure needed for growth is lacking.

“The recent reforms in the banking sector were hinged on four pillars namely; enhancing quality of banks, establishment of financial stability, promotion of healthy financial sector evolution and making the financial sector to contribute to the real sector.

“The issue of corporate governance which was a major problem in the banking industry has largely been addressed with the enforcement of fixed tenures of the chief executives of banks, directors and auditors and there is hope that in the long run strong institutions would emerge.

“Some other measures taken by the Central Bank of Nigeria to reposition the industry include the revision of the prudential guidelines on margin loans, common year end and the establishment of Consumer Protection Unit which he has resolved over 600 cases within six months of its existence.

“The CBN has now entrenched stress testing mechanism on an on_going basis in the industry for early detection and correction of stress signals in each of the existing banks and an established an Asset Management Corporation.

“The Asset Management Corporation of Nigeria (AMCON) is a unique concept adopted by the country to address the problem of bank failure at a time when the United States of America is still debating how to curb such incidences.

“Under the arrangement being put in place, the banking industry will henceforth contribute 60 per cent of the bail out funds and contribute 0.3 per cent of their profits to a sinking fund over a period of 10 years.

‘The bail out fund given to some of the banks in 2009 was actually a bailout for the banking industry. If we had allowed Oceanic, Intercontinental Bank, Afribank and others to fail in 2009, we will not be having First Bank, UBA, GTB and others today. So, the bailout is actually for the industry.”