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N25bn bank capital: CBN, Obasanjo differ on 12 banks
COSMAS EKPUNOBI and DAVID AGBA, Abuja
CENTRAL Bank
of Nigeria (CBN) yesterday sharply disagreed with the reported position of
President Olusegun Obasanjo that only 12 banks will remain by the December, 2005
deadline for bank recapitalisation to N25 billion.
The apex bank said the position was the
president’s personal opinion and not that of the CBN.
The bank reacted even as President
Olusegun Obasanjo blasted financial institutions in the country for neglecting
the small and medium scale enterprises, pointing out the institutions are
largely interested in trading in foreign exchange.
The President took on the institutions at
the 34th annual conference of the Institute of Chartered Accountants of Nigeria
(ICAN) in Abuja.
Speaking late last month at the third
Oliver Tambo lecture in George town University, Washington DC, United States
(US), President dwelling on his administration’s banking reforms, was quoted as
saying "by the time we finish with them, we are not going to have more than a
dozen banks in the country."
But appearing before the Senate Committee
on Appropriation yesterday, Deputy Governor of the CBN, Mr Tunde Lemo, told the
lawmakers who raised eyebrows over the matter, that "we don’t have it anywhere
written that the number of banks will be 12 at the end of the reform."
"With due respect to Mr President, it is
his personal opinion," he added.
The CBN chief who said there could be more
or less than 12 banks at the end of the exercise how ever, explained that the
apex bank was not interested in the number of banks that will remain but how
strong they are.
The apex bank also agreed with the
Accountant-General of the Federation (AGF), Mr. Kayode Naiyeju who announced
N409 billion as proceed from excess oil sale.
According to the CBN Deputy Governor, the
government’s decision to keep the excess crude priceless, has had a salutary
effect on the economy.
Fielding question from the senators on the
high cost of food items and the hiked fuel pump price, Mr Lemo explained that
reduction in the prices of goods could be more damaging than inflation.
Mr Lemo said that "we need inflation to
galvanise the economy," adding that the "feel good factor" may not come unless
the productive sector is expanded.
The Senate, however, disagreed with the
CBN and the AGF over the performance of the 2004 budget.
According to the Senators, if the Federal
Government has released 80 percent of the funds approved in the 2004 budget,
"then where are the funds because our constituents can’t feel it down there?"
Vice-Chairman of the committee, Senator
Abubakar Makarfi told the CBN and AGF that Nigerians are yet to enjoy to benefit
of the budget.
At the ICAN conference, President Obasanjo,
who was represented by the Senate President, Chief Adolphus Wabara, said there
were plans by the government to reinforce stricter internal control measures in
the economic reforms.
He blasted financial institutions which he
said only trade in foreign exchange while expressing bitterness that "even the
funds they have set aside finance small and medium scale enterprises are not
disbursed."
"They cannot and should not be allowed to
thrive only on rent-seeking as they currently do. They must add value by
empowering players in the formal and informal sectors to be more productive in
the long-term interest of the national economy," he charged.
The President also expressed worry that in
spite of the achievements of the accountancy profession in numerous areas,
Nigeria cannot create wealth as she has been hampered by the lack of prudence,
transparency and honesty in the management of resources by those entrusted with
the duty of public governance at all levels.
Obasanjo cited evidence of these in many
abandoned projects nationwide, the poor state of health and infrastructural
facilities, among others.
He stressed that with the due process
strategy, over N110 billion has been saved since inception of the mechanism
while greater dividends were expected from other initiatives.
He emphasised that the Nigerian economy,
as an emerging markets, was still dominated by investors who are not very
sophisticated and educated in the complex issues of internet and financial
derivatives which have become measures for global commerce.
Earlier, in her welcome address, ICAN
president, Mrs. Mojisola Obiyemi who lamented the high crime rate in the land,
called for a total and vigorous cleansing of the nation and not the accounting
profession alone.
"Today, there is a great sense of
insecurity among the citizens as they cannot afford any good meal. The
privileged few cannot graciously go to sleep with their eyes closed because the
poor are awake and angry," she noted.
In their anger and misery, many helpless
citizens have taken to crime with severe consequences for security of lives and
property and investment climate," she noted.
Mrs. Obiyemi explained that the battle to
enthrone transparency and accountability in the public and private sectors would
be hard to him if the rising army of unemployed graduates was not checked.
She therefore solicited for measures that
will tend to assist the unemployed get jobs to curb the rising spate of urban
crimes.
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