If politics is the art of muddling, Nigeria must be among the world‘s leading capitals. This might not sound so nice to super-patriots, who think we‘re too much in the habit of bashing our beloved country, but how long shall we be in denial? How long shall we compete with the ostrich at its own game, burying our heads in the sand while the country burns? Of all the major events that have wracked the country‘s soul in the last four weeks, none has been as profound as the shake up in the banking sector.
Boko Haram - the codeword for the so-called religious crisis that swept five northern states, claiming over 700 lives - has receded from the news headlines, leaving the families directly affected to bear the brunt. The university teachers‘ strike enters its 10th week, with the teachers and government negotiators damaged, exhausted and bereft of goodwill. The teachers compare themselves with bankers, oil workers - and even politicians - and wonder why they cannot earn the same salaries as these people. They conveniently forget that every job is essentially a matter of choice and that in an open economy, reward is determined mainly by consumers’ perception of value created from time to time.
The government, on its part, has been hijacked by little cults of buccaneers, with each group fighting to keep its own turf. The country is adrift and President Umaru Yar‘Adua, however well-intentioned he might be, is too distracted by his failing health to stop the drift. The man remains a ‘willing hostage‘ to a somewhat perverse view in his inner circles that western medicine and experts cannot be fully trusted, and that the less that is known about his actual state of health, the better.
These are things we‘re not expected to say. How then can we challenge ourselves to honest solutions? Boko Haram, the university teachers‘ strike, and even the President‘s offer of amnesty to militants in the Niger Delta, all bear the national imprint of muddling and denial; but none, in recent times, is as profound as the mild tsunami in the banking sector. The story is barely three weeks old but we cannot even remember how it started or what it was supposed to achieve, much less the lessons to be learned.
Boiled down to the facts, we have been told that out of the first 10 banks audited in the first phase of a special investigation by the central bank and the Nigerian Deposit Insurance Corporation, five - Union Bank, Afribank, Intercontinental Bank, Oceanic Bank and Finbank - had a total loan portfolio of N2.8trn. A further breakdown showed that margin loans stood at N456.3bn; exposure to the oil and gas sector, N487bn; and non-performing loans, N1.2trn. The banks had been gutted by poor corporate governance, credit abuse, and poor risk management practices.
To stem a possible collapse of the affected banks, the central bank injected N400bn, removed the CEOs and boards and advised the government to take steps to recover the loans. What appeared to be a genuine rescue mission has now been mired in controversy; everyday brings a new, monstrous angle to the story. It‘s a northern agenda to take back the banks from predominant southern control, some have said. Others have said that even before the central bank governor was appointed, a plan had been hatched to sell off some top banks to foreign interests as far back as March and that the voodoo audit was merely an excuse. Yet others have attacked the procedure, saying that it is unfair to thrash the reputation of those involved when the audit is only half done and those indicted did not get a chance to see the report first.
These are fine arguments and the imputation of motives may even be true. Like most things Nigerian, however, the fine arguments and imputation of motives have managed to obscure the main issue: are the five banks named threatened by a clear and present danger of collapse from bad loans and poor governance? The answer, of course, is yes. The disagreement in approach reminds one of criticisms of the anti-corruption war under Nuhu Ribadu‘s EFCC. He was accused of ”selective” justice and witch-hunt; yet not one of those charged and convicted denied committing the crime - their excuse was that they were not the only ones!
Did Oceanic Bank, on Cecilia Ibru‘s watch, give a N13bn loan to the CEO‘s nanny and offered credits running into hundreds of millions of naira to fictitious companies? Did Erastus Akingbola, who reportedly presided over the audit committee of Intercontinental Bank, grant a loan of N2.4bn to a company that is less than one year old with a share capital of N1m and which directors got the loan? Did the CEOs of Union Bank, Afribank and Finbank try to outspend drunken sailors?
The records are damning and I cannot, for the life of me, understand why some insist on mixing things up. True, the central bank‘s tardiness at the initial stages - including Lamido Sanusi‘s approval to Oceanic Bank to publish its 2008 results, in spite of glaring audit lapses - has not helped matters. Nor has the NDIC‘s irresponsible indifference, if not complicity, over the years. But the focus, at this stage, should be on efforts to recover the huge outstanding loans.
Various interests have already cashed in on the fuzz to divert the public‘s attention from the main issue. We must refuse to yield. We must insist, for example, that as Farida Waziri‘s EFCC continues investigations, she cannot play fast and loose with the full names of those arrested, specific details of amounts recovered so far, and from whom. As at Saturday, the EFCC was already classifying amounts paid by debtors and ”commitments/promises to repay” as actual total amounts recovered so far. This is wrong and fraught with intent to manipulate, collect bribes and steal.
I cannot also understand the suspicious silence on what has been done about the debts owed by Notore Chemical Industries (N32.3b); Ascot Offshore Nigeria Ltd. (formerly Wilbros), N44.6bn; and Berkeley Group, N4.3bn, companies that have been rightly or wrongly linked to former Governor James Ibori, said to be Waziri‘s single greatest benefactor.
Shouldn‘t we worry about what happens next to the five banks? We should, but not before the debt recovery has reached an advanced stage, the prosecution of those so far indicted has commenced fully, and the audit of the remaining banks completed. Those who worry that Sanusi is in a hurry to sell some banks on the cheap should comfort themselves with the thought that it is hardly in the interest of any serious investor to put a kobo in the banks at this stage, with so many questions begging for answers and the disclosure of the depth of the problem still unfolding. In any case, even if the government allows politics to override its decision about who buys the banks, the government won‘t force customers to bring in deposits if the banks are not properly run.
All muddling should be set aside: first things first.
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