Daily Champion (Lagos)
Chukwudi Nwabuko
29 October 2009
Lagos — The silent reforms initiated by President Umaru Yar'Adua may have started yielding dividends, particularly the cleansing of the banking sector embarked upon by the Governor of the Central Bank, Sanusi Lamido Sanusi, which has seen hitherto untouchable eight bank chief executives out of job.
A rare accolade for the reforms came from the United States of America government through its Deputy Treasury Secretary, Neal S. Wolin, who described as 'bold and transformative' the ongoing reforms and audit of the banks by the apex Nigerian bank.
On August 14, 2009, Mr. Erastus Akingbola of Intercontinental Bank, Mrs. Cecilia Ibru (Oceanic Bank), Mr. Okey Nwosu (Finbank), Mr. Sebastian Adigwe (Afribank) and Mr. Batholomew Ebong of Union Bank were removed for sundry reasons and for contributing to the unhealthy state of their banks. This includes granting unsecured loans to the tune of more than N747 billion to more than 205 debtors. Their sack followed the audit by the Central Bank of 10 out of the 24 banks in the country.
On October 2, the apex bank also announced the removal of three more Bank Chief Executives. They are, Mr. Francis Atuche (Bank PHB), Mr. Ike Oraekwuotu (Equitorial Bank) and Mr. Charles Ojo (Springbank). Their sack followed the conclusion of the audit of the remaining 14 banks which have been under CBN's scrutiny. The troubled banks were found to have inadequate capital, and weak corporate governance.
The initial reaction by an apprehensive Nigerian audience and the international community to the move to sanitize the banking sector was that of cautious optimism. However, with the passage of time, many have come to see the wisdom in what Sanusi and by implication, President Yar'Adua's government intended to achieve by carrying out the wholesale reform of the banking sector.
Although the move has largely been applauded, the international community has been falling over each other to identify with the reform process.
For instance, the United States, whose government had hitherto been too critical of certain policies of our government of recent, has given its unqualified support for the actions of the Sanusi-led Central Bank.
Speaking through its Deputy Treasury Secretary, Mr. Neal Wolin, the US government posited: "In Nigeria, the bold actions of the new Nigerian Central Bank Governor, Lamido Sanusi, provide another example of transformative African leadership-in a country whose history has been deeply marred by corruption and internal conflict.
Continuing he said: "Just a few months into Sanusi's term, Central Bank audits revealed non-performing loan ratios of 40 per cent at five of the largest Nigerian banks. Acting quickly, Sanusi replaced the bank's management and announced plans to bolster their balance sheets with $2.6 billion in equity-an intervention structured to restore confidence and attract foreign and local investors to the sector."
"At the same time, Governor Sanusi has taken steps to strengthen banking regulation and supervision to prevent a recurrence of the problem", he noted.
From the foregoing, it is heartwarming that the United States, albeit the international community has taken note of the focused reform of the Yar'Adua government aimed at strengthening the economy and putting it on an even keel towards the realization of the Vision 20-2020 in which Nigeria hopes to be among the first 20 most developed economies in the world in the year 2020.
Analysts are of the opinion that the CBN measures to shore up the banks would on the long term help to stabilize growth and ensure confidence in the market thereby making Nigerian banks stronger and positioned to carry out cross-border banking.
There is no denying the fact that what Sanusi has achieved so far in the banking sector within the period he has been at the helms would not have been possible if the environment had not been created for him by President Yar'Adua.
It should now be clear to all and sundry that Yar'Adua all along knew where he was going when he refused to extend the tenure of Prof. Chukwuma Soludo despite the pressure mounted on him to do so. Because he is long suffering, he allowed Soludo to serve out his tenure before bringing on board Sanusi who had the temperament to tread where lesser mortals fear to walk. Little wonder that it took him few months to identify the source(s) of stress in the banking system and went frontally to address it without minding whose ox is gored.
As pointed out by Wolin in his speech aforementioned, of significance and worthy of mention is that the reform process which is not only visible in the banking sector but cuts across other sectors, is conceived and driven by Yar'Adua's strong vision and leadership.
This strong leadership is also exemplified in the amnesty which the President granted the Niger Delta militants which has seen almost all known militant leaders surrendering their arms and pledging allegiance once more to the country. Thus, without shooting a single bullet, Yar'Adua achieved what successive governments have not been able to accomplish.
It is a mark of the statesman in him and a measure of his leadership acumen that, whereas others in his shoes would have deployed battalions of soldiers to flush out the militants from the Niger Delta region, including the attendant loss of lives of innocent Nigerians, Yar'Adua, in a rare display of large-heartedness through persuasion and deft diplomatic moves 'disarmed' the militants without firing a single shot.
What is being said here is that this government should be given a chance. 29 months is too small for any government to really make much impact, but Yar'Adua against all odds has been able to give himself certain timelines on which to deliver on his promises. He has promised Nigerians that by the end of this year, the Power Holding Company of Nigeria (PHCN) the energy company-would be able to generate 6000MW of electricity. In order to achieve this, government has embarked on massive construction of power plants across the country and from available statistics; indications are that the government is on the verge of meeting the deadline.
Also the aviation sector is receiving due attention as some of the nation's airports are being upgraded with state-of-the art equipment.
Not left out are other infrastructures like roads for which many contracts have been awarded to ease congestion and ensure smooth travelling. All these need time to begin to bear fruit and the President has shown that he has the capacity to deliver on his promises.
The time has come therefore for all hands to be on the deck as the government is poised, to all intents and purposes, to improve the investment climate in the country as well as strengthen the financial sector. It is worth reiterating that, as the US said, these reforms represent only a small cross-section of the positive economic reforms being made in different sectors to pave the way for greater transparency, competition, access to financial services, sound regulation and growth.
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