WAS Sanusi Lamido Sanusi, Central Bank Governor, being altruistic when he let the sledge hammer fall on five targeted banks? Was he being patriotic when he injected N420 billion into the five banks to prevent them from failing and causing catastrophic consequences for the nation's economy, shareholders and depositors? Or was he pursuing a personal vendetta and a group agenda when he sacked the five chief executives who were his colleagues up to June 2009 with so much disdain and gusto in a generalissimo style? For a man who is an alumnus of the famous Kings' College Lagos where young Nigerian students are raised not to be tribalistic and myopic in handling national assignments, it was easy to want to believe that Sanusi could not have been motivated to act the way he did to wrest the banks from those who were alleged to be playing ducks and drakes with shareholders and depositors' funds, besides his sense of altruism. That belief is bound to endure with anybody until one has access to the March 23, 2009 Vanguard edition which revealed five months earlier all that Sanusi was to play out on August 14, 2009. The report said a group of disgruntled persons were plotting a real upheaval in the banking sector to get even with policies of our immediate past President, Chief Olusegun Obasanjo.
They were said to have " regrouped with the hope of ... and forcing a takeover of top five banks in the country". How many banks did Mallam Sanusi take over? Five banks! And isn't it curious that Sanusi now says that he did not expect any major surprises in the remaining 14 banks that were yet to be audited? The report also said that the plan by the group was to cause panic and uncertainty, loss of public confidence, and instigate government to take equity in the banking industry. At least one big bank had a field day de-marketing selected banks, leading to panic withdrawals by customers of those banks. De-marketing should be seen as a heinous, diabolical and unethical marketing practice, a fact which Sanusi admitted in his circular to his staff!
It is unfortunate that top five banks are the target. The banks ... are sound. Sanusi himself corroborates the soundness of the five banks when he said in an interview and repeated in the August publication of the Federal Ministry of Information and Communication Open Government publication, "that these banks are safe. What we have done is to take actions to make sure that the banks are safer." If the banks are safe, why did Sanusi rush pell-mell to inject N420 billion which the banks' Treasurers, reportedly now say they didn't actually need as much? Why could Sanusi not take the pains to analyse the nature of the so-called non-performing loans? Would he not have found out that the worst culprits of the so-called non-performing loans are his masters? It has been reported that the Federal Government is owing the five banks N3.2 trillion! If the Federal Government honoured its obligations effectively, would all the hue and cry have been necessary?
Daily our attention is drawn to the havoc being wrecked on the economy by the most unfortunate hasty actions of the CBN Governor. The outcry has been deafening, coming from all segments of the economy: Chairman of the Economic Summit Group, Mazi Sam Ohuabunwa; a Professor of Finance with the University of Witwatersrand, Johannesburg, South Africa; Advertising Agencies; Estate Valuers; Shareholders' Associations; Newspaper Proprietors Association of Nigeria, among others.
The intellectual myopia exhibited by the CBN in the handling of the contrived illiquidity of the banks is simply astonishing! When Governor Francis Sanusi (the Sanusi before the coming of Soludo) edged out the chairman of one of the five banks, now given a clean bill of health by the Lamido Sanusi ( remember that he was the Risk Manager at the bank), for unethical conduct, no one felt the whimper of his actions. When Professor Soludo eased out some tin gods of some private banks, it was achieved without any perturbations to the economy. So, why couldn't the Lamido Sanusi resort to such subtle and adroit moves?
Why the grandstanding? Why was it necessary to hug the klieg lights when handling such a highly sensitive matter that would hurt the economic arteries of the nation? I recommend that Sanusi should read the" Mischievous Dog" in Aesop & the CEO so that next time he can follow due process whenever he wishes to use his enormous powers of sacking bank executives. We now run the grave risk of destroying through this military leadership style the macroeconomic reputation which the Global Economic Forum recently lauded as the nation's key strength, ranking Nigeria in the 20th position out of 134 nations on this factor of global competition.
Sanusi made a mountain out of the use of extensive resort to the "Expanded Discount Window" in his televised outing as a major reason for sacking the five executives of the banks and injecting the whopping N420 billion into the banks. In a recently paid advert placed in many newspapers the CBN asserted that, "The CBN Act empowers the CBN to manage money supply in the economy through different (emphasis mine) mechanisms".
The CBN, as banker to other banks has been increasing money supply by lending money to the banks through the Expanded Discount Window (EDW) and the injection of the N420 billion into the five banks is similar (emphasis mine) to that function. "So why did Sanusi deliberately close the EDW if it is similar to the fund injection? Who in Nigeria or abroad had bothered about the goings on in the EDW which his immediate predecessor had quietly and sensibly created to deal with the aftermaths of the global meltdown? If the funds withdrawn from the EDW are loans, didn't they have repayment terms and duration? Why did Sanusi deliberately disrupt that seamless mechanism simply to achieve his goal of presenting the five targeted banks as distressed and ready for take over?
If they were obtaining funds from that source, surely that must mean they were positioned to meet their obligations to their customers as and when due? There was no known case that any of the five banks was unable to discharge its obligations before Sanusi decided to ambush the banks to take them over. Another grave harm Sanusi may unwittingly be sowing is the destruction of the entrepreneurial spirit of Nigerians. Besides all those senior citizens recently herded into detention, do not at deserve the public humiliation to which the EFCC has subjected them, believe it or not they are still among some of the finest Nigerians this nation can boast of.
Dr. Afolabi is a medical doctor in Lagos
