27 June 2011

Nigeria: Islamic Banking!


I think it shows incredibly bad policy formulation, unnecessary religious sentiment and lack of cognitive appreciation of the structure and management of the Nigerian banking system on the part of the Governor of the Central Bank Mallam Sanusi Lamido Sanusi.

I am forced to state at this juncture of his so-called reforms that he does not appreciate the problems confronting the Nigerian banking industry. I strongly believe he has no focus on the pattern of the viable and profitable investment quotient needed to be geared towards the enhancement and improvement of our economy through effective strengthening of the value of our Naira.

What is the relevance of non-interest banking to Nigeria now? Of what benefit is it to our economy?

If the Muslims claim they are entitled to Islamic banking, the Christians can also lay claim to the fact that they are entitled to Christian banking and the traditional practitioners want Traditionalistic banking or Ifa banking or Okija banking, should CBN readily agree or grant licenses for such banks? I think not.

The CBN governor has once again missed the goal post. This issue of non-interest banking [Islamic Banking in disguise] must go through the National assembly.

So far, the CBN governor has issued out more than N1.4 trillion broken down as follows: N620billion to the so-called failed banks who were in trouble, N500billion to local industries, and N400 billion to Agriculture and the list goes on. There has been no registered 'RETURNS' on these monies. Where is the accountability of these reforms?

This man is acting ultra-vires and has arrogated so many powers to himself which are not in line with the proper principles of banking.

Mallam Lamido Sanusi carrying out these powers without supervision from the Executive and the National Assembly will wreck our economy and destroy our global financial status as a rich nation. I am of the firm view that his actions would also further devalue our 'NAIRA' and also hinder infrastructural development in Nigeria.

We call on the heads of our National Assembly Senate President David Mark and the Speaker of the Federal House of Representatives Aminu Waziri Tambuwal to make sure a bill concerning this Non-interest or Islamic banking is brought up on the floor of both houses and properly scrutinized in the progressive interest of the banking system and for the benefit of the entire nation through their representatives duly elected to the National Assembly.

However these 14 poignant questions should be the primary sense of focus:

1. Is Nigeria being turned gradually into an Islamic state? I recall during the Babangida regime when General Ibrahim Badamasi Babangida [IBB] attempted to register Nigeria into the Organisation of Islamic Countries [OIC]. Then came the Gideon Orkar coup which scuttled this attempt and effectively registered the protest against the idea.

2. Is this Islamic Banking one of the agitations of the Boko Haram sect?

3. Of what benefit would this Islamic Banking be to Agriculture?

4. Of what benefit would this Islamic Banking be to the development of our Health Sector?

5. Of what benefit would this Islamic Banking be to the development of our Educational Sector?

6. Of what benefit would it be to the development of our indigenous small and medium scale industries?

7. How do we measure the returns of this so-called Islamic Banking system?

8. How will it enhance the value of our naira?

9. How will it curb inflation?

10. How will it improve the power situation in the country?

11. How will it aid infra-structural development in Nigeria?

12. What are the effective control mechanisms to be put in place to reduce excessive expenditure which i suspect would be the order of the day for this non-interest banking [Islamic Banking]?

13. How profitable would the system be to the banks scheduled to practice this Islamic Banking?

14. What is the measure of profit to the Central Bank itself?

These questions are begging for ready answers and would go a long way to clarify what is really going on in the Central Bank of Nigeria. I strongly believe there is a hidden agenda somewhere which Nigerians and the rest of the Banking industry is not aware of!

Is Sanusi Lamido Sanusi competent enough to govern the Central Bank?

Nigeria is a nation where all religions are welcome and are free to practice as they wish guaranteed by Section 38 of the 1999 constitution

I respectfully suggest that the CBN governor should sit down and engage the best brains in Nigeria [Nigerian brilliant bankers, Nigerian outstanding economists and Nigerian impeccable financial analysts]; to churn out pragmatic and profitable solutions to our indigenous banking problems, global banking expectations and financial problems in this country.

Let us have a draft plan on the table for-short term, medium term and long term policies for outright improvement. The Naira should now exchange for suggestively N5 to $1, N3 to 1pound. Then how do we put a stop to inflation?

The banking system in this country should have been greatly improved and enhanced; and we should have gotten past most of the problems we had by now. Already there is vast unemployment in the banking system, there is a lot of liability incurred by virtue of the alleged activities of the five bankers who were alleged to have embezzled funds from their respective banks and have enriched themselves as a result of the alleged abuse of their positions as Chief Executive Officers. [Union Bank still demands N290billion, what happened to the amount given to them in 2009, we need an analysis of the expenditure by Union Bank.]

How long would we continue to procastinate through the use of lecture reforms carried out by the CBN Governor? We need immediate action now? Is the CBN Governor able to rise to the challenge?

We eagerly anticipate his swift and pragmatic response in two weeks from today. He should publish in at least 5 Nationally circulated dailies a full-proof plan for the banking industry guaranteeing that our beloved 'NAIRA' would be exchanged for N5 to $1, N3 to 1pound on or before october 1st 2011.

This will be called the sanusi's 8th of july plan!!!

Mr. CBN Governor we eagerly anticipate you.

•Mohammed fawehinmi, esq, wrote in from Lagos

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