The Nigerian Village Square - Crying And Bleeding For Bankers And Banks In Nigeria?

Crying And Bleeding For Bankers And Banks In Nigeria?

Sunday, 01 August 2004

Professor Soludo, the governor of Nigeria's Central Bank is right in requiring Banks in Nigeria to have a minimum capital base of 25billion Naira! Too many banks in Nigeria are really not performing any banking functions that are useful to Nigerians or the Nigerian economy; 90% of banking transactions in Nigeria, are not related to productive economic activities, but instead, too many of our banks, acts as conduits for the nefarious activities of the dubious class, as these banks aid and abet the siphoning of Nigeria's wealth.

Furthermore, it has been the case, for the past fifteen year, too many Nigerian banks have failed and poor customers/depositors have been left holding empty money bags, as these financially unsound banks fizzled, now, what is wrong in strengthening our banks capacities to weather tough storms? Who is afraid of reforms? We do not all have to own banks! Let the fragile banks merge into one solid and sound bank or go extinct.

Too many Nigerian banks are engaged in foreign exchange speculation on the behalf of their patrons, who for the most part, are those of the political and business class, who have for decades, presided over the ruination of Nigeria. Too many banks in Nigeria charge usurious interest rates, that will be illegal elsewhere, too many of these banks have no long term investment plans or strategies in Nigeria, they are not interested in planting, but just the harvest!

It probably does not occur to many Nigerians that avarice, greed and corruption that have deprived Nigeria of growth and development, is assisted by their neighborhood banks! Which corrupt Nigeria private sector or public sector official would be able to remit one Naira or billions of Naira to the fabled overseas accounts, particularly, the ubiquitous Swiss Accounts, without the conspiracy and help from our sullied bankers and banks? Nigerians must realize that 99% of Nigeria wealth that have been looted by our private and public sector lootocrats, have been made possible, by bankers and banks in Nigeria, through all types of connivance and collusions.

Amazingly, the commentators, who are defending the bankers and banks in Nigeria, even as they criticize Professor Soludo, have not bothered to analyze the unsavory roles of our bankers and banks in Nigeria, viz a viz corruption in Nigeria. High interest rates, and the spates of recent bank failures, at least, during the past fifteen years necessitates an overhaul of our banking system, the bank reform would help the fate, that innocent depositors have had to face amidst past failures.

Nigerians are very quick to criticize the office holders, elected officials etc for corruption and failed policies, but that as it may, Nigerians must investigate and analyze private sector participation in the insidious scourge of corruption, greed and avarice, that has deprive our country of growth, development and deserved advancement; The Bankers and Banks in Nigeria, directly in the eye of the storm or the center of the hurricane!

Nigerians should critically examine the roles of bankers and banks in Nigeria, and their effect on our stymied growth and development; In the past, I have touched on this topic, by pointing out that our banks have not helped the productive sectors of our economy, as the overwhelming majority of the banks in Nigeria have not granted loans for the improvement of agriculture, education or manufacturing, hence the frequency at which Nigeria is mentioned in the same sentence with diminished productive capacity, over the years. But, yet, year in, year out, these banks declare huge profits, that are inconsistent with the overall productive economic environment in Nigeria.

Nigerians bankers and banks in Nigeria, appear to charge the highest interest rates in the world, just as these bankers and banks would not consider granting loans to cover the cost of higher education, particularly in the pursuit of medical and legal trainings. It is my position, that bankers and banks in Nigeria, ought to support the financing of higher education, just as they ought to support business ventures in Nigeria, preferentially, instead of the current situation, where banking activities are limited speculations in the foreign exchange trade, which has in turn led to a considerably devalued Naira.

Outside of this aberrant shooting-thyself in the foot foreign exchange hunt, the bankers and banks in Nigeria, also finance, the importation of luxury goods, that add no value to our economy or to our productive capital, this practice, is anathema to the growth and development of local industries and a Nigerian industrial base. Nigerians are unwittingly supporting dumping, as we import chocolate bars and orange juice, instead of productive machineries. A compulsorily required stake of 25 billion Naira, may engender long-stake investment thinking on the part of our bankers and banks, pocket books politics always works, the logic is, if your have a 25 billion Naira stake, it is or will be your best interest to behave positively, in safeguard of your monies, or if the financial environment that you create implode and explode, your 25billion Naira goes up in smoke, puff!

Too many individuals and companies in Nigeria, appear uninterested in productive activities that requires long term planning and prolonged gestation periods, hence the banks would not want to invest in a medical student or law student, for a seven year duration, that it takes to complete the usual law school or medical school respectively. In the United States, investing in higher education through loans to students, are as standard practice. It helps the capital, human capital base of the country and the individual banks benefits, even as the support the building of a vibrant middle class, an outgrowth, from the higher education and professional school, which is supported by these education loans and financing. Bankers and banks in Nigeria must do the same.

What we currently have in Nigeria is unacceptable. It is the case that there is rampant cronyism, particularly in the banking and financial institutions sectors. Those who are granted banking licenses are almost always, those with political connections, in turn, they engage in all manners of shady deals, including, aiding and abetting the age-old siphoning of Nigeria's treasury of our national resources.

For far too long, we have been lacking bankers and banks in Nigeria, who are in the practice of wealth creation and wealth management mindset or mode, by and large, we have had a near complete replacement of seasoned Nigeria bankers and banks of old, that reveled in their professionalism and ingrained integrity, we now just have, parasites and corrupt government officials, both active and or retired, parading as bankers, using nearly naked girls as “marketing” tools, debasements by any other name?

Where will the crooks and the corrupt in Nigeria be....without the banks? Imagine if bankers and banks in Nigeria were corruption free? Imagine if our banks and financial institutions were interested in public accountability and transparency? Imagine if our bankers, banks and other financial institutions were engaged in clean and pristine practice of their professions? Imagine also, if our bankers and banks were to blow the whistle on clear cases of corruption, as they receive evidence of huge money deposits and money transfers, that are not related to productive or manufacturing activities, by and from the new President, Minister, Governor or Councilors.

Imagine the rebound of the Naira, as the Naira recovers from its forced devaluation? A two decade devaluation foisted on our national currency, as a result of the depletion of Nigeria's productive capital base and capital flight? And also imagine, a Nigeria, where the fate and value of our national currency is not determined by the mindless speculative activities of foreign currency traders, traders who are only interested in the instant profit world of foreign exchange speculators? Imagine Nigeria without the mercenary-like bankers, banks and highly placed persons who act as their collaborators, to siphon our treasury, our wealth and capital base, which translates into siphoning our hopes, our growth, development and advancement as a nation?

Bankers and Banks in Nigeria, must accept a great part of the responsibility, for the corruption label that Nigeria has received, banks and other financial institutions in the US are penalized severely, when they operate outside the laws and rules in the United States, but in Nigeria, it has frequently been the case, that corrupt public officials are cahoots with the bankers and banks, so, who policies whom? In the den of thieves, rules are scarce? The federal government, the national assembly and Nigerians should seek the strengthening of Professor Soludo’s hands in his arduous efforts to reform and sanitize our banking and financial institutions/sector.

Governor of Central Bank of Nigeria is right, right on the money! Demanding a higher capital base from the banks, may actually engender or compel their long term interests and hence investments in Nigeria to protect such interests... Soludo is making the bankers and banks in Nigeria, put their monies, where their mouths are! And perhaps this policies will compel the banks to really invest in Nigeria, diversified investment, and not banking based on the profits that is heavily reliant on 99% profits derived from foreign exchange speculations or managing the wealth of treasury looters. Let real banking begin.
Paul I. Adujie is a Nigerian Lawyer and an Information Technology Professional. He can be reached at Lawcareer@msn.com

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	# 1 ...Read the full article. Posted by Robot\| 12.11.2005 14:12

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