Daily Independent Online.
*
Monday,July 19, 2004.
The Senate and Soludo’s marching
orders
By Adetutu Folasade-Koyi
National
Assembly Correspondent, Abuja
Today, Monday, July 19, a very crucial meeting will take
place in Senate Committee Room 14. Two teams would square up against each
other. On one side will be the Governor of Central Bank, Professor Charles
Soludo and his team while on the other side of the table will be Senator Zik
Sunday, Chairman of the Senate Committee on Banking, Insurance and Financial
Institutions. You can be sure that Senator Farouk Bello-Bunza would be seated
right beside his chairman. The main gladiators would be Soludo and Bello-Bunza.
In the past one week or thereabout since after the CBN
pronouncement that banks have only 18 months to cough out a whopping N25
billion to remain in business, the Senate too, has taken a stand.
At an interactive session with newsmen last week, Bello-Bunza
explained that the committee called for a meeting with the chief executive
officer of the nation’s apex bank because what stakeholders expected of
him is not what he is tackling at the moment. To Bello-Bunza, the industry
expected that Soludo would tackle macro economic knotty issues as a matter of
first priority and not jack up unilaterally, banks’ paid-up share
capital.
“With the appointment of the CBN governor, the polity
was thrilled and we envisaged that there would be a change of vision and focus
on macro policies and considering Soludo’s background, we believed that
was what informed the decision to bring him in. It is surprising that the first
thing that engaged his attention was a micro issue-banks’ capitalization.
The high interest rates and the consequent unemployment in the industry should
have attracted his attention. The Committee is worried about this development,
which is why we invited him to come and talk to us. We also feel worried that a
policy that is still half-baked is being sold to the market prematurely. This
would bring about panic (in the system) and would destroy an otherwise good
intention,” said the legislator from Kebbi State.
While it is acceptable for the Senate to feel slighted that
the CBN acted rather hastily, it is still early in the day to begin to judge
Soludo.
Reports indicate that some banks are just barely hanging in
there while some are being propped by the FOREX they garner from the CBN. For
others, their survival is based solely on the humongous deposit from government
agencies, a move, which Soludo has vowed would stop.
Last week, Soludo even promised to mop up NNPC’s
funds, totaling almost N20 billion from such banks. Right thinking Nigerians
should support these reforms being carried out by Soludo. Ever since the tenure
of the gap-toothed general (who still wants to come back to power), who threw
open the doors of banking to every newcomer who had more than N100 million to
spare, the industry has never been the same.
If we are going to be honest to ourselves, when was the last
time a banker approached you to come to his bank to open, at least, a savings
account with just N2000? The textile seller in Gbagi Market in Ibadan, Oyo
State, or the tomato seller at Mile 12, Lagos State will readily and happily
too, tell you that they would rather do esusu or ajo (a form of communal pool
of funds) than commit their hard-earned funds with a bank. Another simple fact
is that our designer-conscious, label-wearing bankers would find it so
preposterous to approach a trader to come and put his funds in his bank. They
would rather hanker after fat corporate accounts and depend on the weekly FOREX
sale by the CBN.
Another ugly fact is that at this time when the economy is
almost prostrate, when the middle class has all but disappeared, the only
viable sector of the economy is the banking industry. They post such huge
profit, yet they do not even perform the least of their statutory functions,
lending money to SME’s. For those traders or farmers who have no
godfather in the system, they do not bother to venture near the banking hall.
It would be a futile effort and they know it. So, let us pause to ponder. Why
is the banking industry posting such humongous profit and the economy is
anything but healthy? There is something wrong somewhere.
That is exactly what Soludo is attempting to correct. Please
note the word ‘attempt,’ because were he to be a banker, the N25
billion directive would almost by now be tantamount to committing policy
hara-kiri. Suffice it to say that Soludo is not a banker. Now, Nigerians can
see the wisdom in President Olusegun Obasanjo appointing an
‘outsider’ to turn around the CBN and make it for once, the bulldog
it is supposed to be. For now, his slate is clean and so, at that meeting two
weeks ago, he could afford to look at the bankers in the face and issue that
directive.
A colleague here in Abuja told me an interesting story of
how the N25 billion directive became public knowledge. At the usual interactive
session with the CBN governor, Soludo read his paper, where the new vision of
the
CBN for banks was reeled out. Bankers were caught napping
about the new paid-up share capital and they requested that the directive be
kept under wraps. Specifically, the request was that details of the meeting be
kept away from newsmen, who when they sniff any damn ‘good’ story
go to town, gleefully. The Nigerian in Soludo acted swiftly. As the bankers
were filing out, Soludo, according to my source, directed his media department
to go to town with his paper. The rest is what you already know and which still
promises to unfold.
