Daily Independent (Lagos)
Kanmi Ademiluyi
9 July 2009
opinion
Jeune Afrique, publisher of the Africa Report which is now in its 17th edition, should really have shown a greater circumspection in its report on the highly sensitive issue of the health of Nigerian banks. For a start, long established though it is, the publication cannot be conferred with the status of an acceptable rating agency.
It will be helpful to know the methodology which it used to come to its deductions. In the absence of this, we can only ponder whether Jeune Afrique would have adopted the same cavalier attitude in rating French banks. It is even more alarming that parts of our local press picked up the same report and used it with such reckless abandon. The result is quite predictable. There was panic. Not surprisingly there would be panic in Paris if Jeune Afrique had headlined such a scary report on the state of the health of French banks. When you now bring this anxiety to the level of an underdeveloped economy, the effect is best imagined.
There has been panic withdrawal all right, but mercifully it has not reached the stage of a deluge. If it does, there will be very sound reasons for suing Jeune in Paris. That it hasn't come to that could have a lot to do with the perception of the new helmsman at the CBN as a safe pair of hands. This is a very happy coincidence. The avuncular CBN governor Sanusi Lamido Sanusi has been very reassuring. His sensible comportment has calmed things down. A guarantee on all inter-bank placements from July to March 31, 2010 has made assurances doubly sure: not least by guaranteeing the placements with banks by pension funds. The Jeune Afrique capper certainly did a lot to reinforce mutual suspicions among the banks themselves leading to an inhibition to lend to one another because of the perceived counter-party risk.
The CBN helmsman has very commendably gone out of his way to disprove the Jeune Afrique position. Refuting the position that only four banks are healthy, Sanusi pointed out that having perused the banks' balance sheets, he had seen no evidence that any bank was unhealthy. Sanusi of course wears as his strong suit a reputation of being strong on risk management. Therefore even though he was clearly going out of his way to reassure frayed nerves, nevertheless he had the intellectual honesty to note that there were stress points in some banks' balance sheets. There was a moral imperative in so doing, otherwise the CBN boss could be in danger of selling the not too discerning segment of the public what could amount to a false prospectus. Nevertheless, his conclusion is that "there is no basis for suggesting that the system is at risk". Amen!
All is well that ends well? Unfortunately, there are still lingering doubts. Although the Jeune Afrique report cannot by any sensible gauge be seen as a reliable assessment of the situation in the nation's banking sector, there is still need for greater transparency. This lack of openness runs its writ right through every aspect of our national life. This is why an absurdly pretty pliant freedom of information initiative has been bogged down in the National Assembly. Odd that Nigeria cannot even envisage joining scores of nations which have, since Sweden in 1688, passed open access legislation.
This reveals the mindset of the members of the National Assembly. The formative period of most of them coincided with the long under-the-jackboot years of military despotism. Many of them clearly still feel queasy about the contraption called democracy. This is why the transition so far, over the last ten years, has been to civil rule (thank God for small mercies) and not to democracy. If, however, we are going to avoid getting into a twist a la Jeune Afrique then the move has to be towards greater openness and transparency. If the local media had more access to information, including confidential, behind the scenes background briefing then, there would be no excuse for swallowing hook, line and sinker the mendacious claptrap of the sometimes deliberately mischievous overseas media.
In this instance there are dark mutterings about the real raison d'etre behind the report. Could it be foreign predators looking to gobble up Nigerian banks on the cheap by using misinformation to drive down their share prices? We may soon find out, or on the other hand it could just be conjectural. Whichever way, Lamido Sanusi appears at first glance to be the sort of person who is open to persuasion in the right direction. It might not be being overtly optimistic to believe that he could induce a fresh wind of change in the direction of openness and greater transparency. That would represent a breath of fresh air.
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