Sanusi’s ground breaking reforms in retrospect

Sansui’s response to the discovered troubles in the banks has never impressed itself on one as a solution but rather, as a reaction that is capable of worsening the socioeconomic challenges of the Nigerian populace. Already, the employment market is beginning to tell the tale better than any statistics from the new improved banking sector, with the massive lay offs of staffs, particularly, in the nine “troubled” banks. And let no one argue that the banks didn’t need all the staff in their employ, pre-sanusi’s earthquake. They did.




And unless an effective damage control mechanism is designed and deployed to arrest a potential economic catastrophe whose impact is sure to be more felt by the unregulated arm of the private sector, we are likely to wake up one morning in this country to discover that, even with the significant improvement in oil earnings, that the vast majority of businesses in this category have gone under with all the negative implication for the nation’s economy. It is, that is, the unregulated or unorganised sector, for one, home for more than eighty percent of the nation’s income earning class.





It is a unit that thrives on informal credit and before the coming of Prof. Soludo, indifferent to government policies and programs, consequently, had very little to do with the capital accumulation drive or desire of the government for channelling into the organised private arm. Prof. Soludo coming changed all that with policies which indirectly made them a source of cheap funds for the economy. These policies came in the form of the very successful banking consolidation exercise, the redefinition of the community banks into micro finance banks, the encouragement of the setting up of investment houses and many more.




To get them to part with their funds— a no mean feat considering the level of disconnect and consequent mistrust in the society, then and even now— both for the good of the larger economy and that of the various institutions which required such funds to meet the government minimum requirement for their continued existence, incentives like promises of usurious returns within a very short period, which allayed their sense of fear concerning return of capital were given wide publicity. And before long, they queued up to subscribe to what they knew very little about, placing their entire fate on the promised quick return of capital.



Then, entered the global economic crisis which caused a run on the Nigeria capital market started first, by most of the foreign investors—individual and institutions— and then, the local investors with largely follow the crowd mentality. This provided the first shock for members of the unorganised private sector who had invested in the market—that the market could and actually did not always go according to advertised projections. For most of them particularly, those who had gone ahead to test the waters with both feet with just their seminar acquired information which was, to all intent and purpose, grossly inadequate; and the random check of the dailies for market prices, it was nothing but a complete disaster and a return to ground zero and till date, are still there since the market is yet to return to any thing near what it was when they entered.



The grounds however finally gave way when Sanusi, the CBN Governor came in and within months, made a ground breaking, and no doubt, shocking discovery in the banks: that most of the companies and persons who we, may be, thought did business according to the size of their pockets, were actually chronic debtors!. And to clinically deal with the offending debtors while he headhunts in the banks, help came from no less a person but Farida, the boss of the EFCC who wasted no time in issuing ultimatum for repayment and threatened arrest and prosecution for those who would dare the commission.



The high and the mighty involved being the over pampered kids of the Nigerian state that they are, quickly made arrangement to repay, even where they had a valid and enforceable contract with the banks— a case of everybody wanting to go to heaven but rejecting death vehemently. To avoid what in their circle constitutes embarrassment and a sign of bad times—arrest for debt—they quickly turned on their debtors without any regard for standing agreement between them. The debtors to the debtors to the banks in turn turned on their debtors and on and on until the collection drive left the organised private sector circle for the unorganised who ultimately, keeps the organised sector in business.



And while the debtors to the banks were struggling to get the EFCC off their back, the bank MDs in turn were also in the race to get Sanusi of their banks and jobs. Desperately, they started review their relationships with the micro- finance banks and investment houses who had won the unorganised private sector with actions that matched words. The micro finance banks and investment houses whose business essentially involved borrowing from the banks and redistributing same to their clients, making daily collections from them and accepting deposits from the public with the understanding that it would be paid back at a determined date with interest, were now forced—unexpectedly—to attend to their contracts with the banks, thereby, depriving them of funds to service their contracts with customers.




It was just a matter of time before the micro and investment houses disappeared. And disappear did some of them in real terms with many more contracts with their customers falling due and not being disposed off. The customer who had relied on such funds to square their accounts now discovered to their chagrin that this was not possible. What to do? Refuse credit advancement to customers henceforth. Before long this practice equally became the standard.



Some persons have argued that the banks had too many branches, located mainly in the cities and close to another and that this contributed to the problem. I beg to disagree on all. With 150 million persons officially living in Nigeria and the numbers of persons having business to do with the banks increasing gradually, it is only right that time efficiency be considered, particularly, for the new clients who are not used to delays in collecting what they believe is rightly theirs. We know what the experience is like in those banks with few branches. In terms of location, it is always right to talk about the rural areas but cost of operation must be paramount. In most rural areas, all kinds of infrastructures are absent and even the rural dwellers are so poor that the idea of banking might even elicit nothing but laughter from them.



Nigeria’s economic slow down started very recently and under Sanusi who has with his actions further sent the unorganised private into their cocoon. And it is doubtful if there is any kind of stimulant or stimulus that will ever get them to be as generous as there were with their funds in the stock market on the promptings of the banks or invest their fortunes freely with the micro finance banks and investment house. This certainly is not the first time they would be victims of financial sector but this time, it was on scale they had never known and most likely, will never again.



Postscript: the American CIA is in the habit of coming out after every attack on innocent citizens of the world with claims that they were aware of either part or all of the plans of such. That is ridiculous. Of what use is such information after a devastating attack?



Their duty is not to inform of what they have or do not have by way of information. It does not impress anyone. It is to protect us from the activities of these moronic entities every where and anywhere.



As it was with the saddening twin tower attacks so is it with the recent, to God to be the glory, failed attack by the misguided Muttalab.


As for the increase search or screening of intending travellers from Nigeria by security operatives, it is not altogether wrong. However, let the Americans be aware that we in Nigeria as Nigerians are as lily-livered as it can be where messing around with anything capable of taking life is concerned not to talk of something like a bomb.


One does not think that there is any Nigerian no matter his level of poverty, that would, with out any form of brain washing, strap a bomb to his waist for the purpose of committing suicide and committing mass murder. We are too deeply religious and intelligent for that. And when we die, we don’t get burnt to ash but buried. A shred body is of no use.


Lest I forget, according to report, it is said reported that the young Mutallab entered came and left Nigeria on the 24th of December. Hope the sugar like bomb was not what brought him to the country. We don’t want it ending in people’s kitchen as sugar or salt.



Meanwhile, let the search for those who brain washed him continue. On his own, one doesn’t believe he would want to die for what he knows very little about beside the fact that there is life to live and enjoy. But in the event that he was actually in need of dying, one is sure he would have found so many worthy courses to die for in Nigeria, starting from the regular power failure to corruption in high places. These are afar better courses than yaman or Yemen and more importantly, He is not JESUS CHRIST.