Nigeria may be broke…as rogue bank chiefs plunder economy

 Breaking News

Nigeria may be broke…as rogue bank chiefs plunder economy

Nigeria may be broke…as rogue bank chiefs plunder economy
December 02
11:42 2015

· Corrupt bankers inflict hard times on Nigerian banks, energy sector and public institutions
· Redundant loans and financial recklessness increase the country’s vulnerability to bankruptcy

Nigeria may be broke. The country may be truly bankrupt. If that is the case, then the country may be flailing right at the edge of the deadly precipice, where prodigal clans careen and plunge down the steep plains of lavishness and sick delight. The facts are mean and the statistics loom grotesquely like tragic integers of an economy in the chokehold of penury and devastation.
Worse hit is the financial sector in the catalogue of ruin that pervades the polity even as you read.
Prime culprits responsible for the depression stealthily stealing upon the country are the self-styled mavericks running the Nigerian financial sector amok. They are none other but the banking industry’s cowboys or rogue entrepreneurs if you like. These characters comprise executives of top banks in the nation’s financial sectors and they are to blame for the rot and spiraling misfortunes of the sector. While Nigeria depends on them to shrewdly manage and maneuver the economy from a state of uncertainty to a state of prosperity or future affluence, these characters conspired to effect the devastation of the banking industry.
And how did they do that? By granting outrageous loans without collateral and other mandatory securities to themselves, their principals and glorified tin gods among their clients. Rather than re-energise the banking system by imbuing it with the kind of visionary, dynamic and audacious initiatives reminiscent of the best the sector has to offer, these bank executives imposed on the country, a dark pall of financial doom and controversies via their inclinations for and brazen perpetration of cutthroat practices.
Many of them, bank Managing Directors (MDs) or Chief Executive Officers (CEOs) to be precise, sheepishly and maniacally played stooge cum dimwits to plundering boards of directors, chairmen of boards of their institutions, political tin gods and the current generation of aggressive entrepreneurs identified as young Turks of the nation’s oil and gas sectors. While serving as unquestioning muscles to their various principals and clients, these self-seeking MDs/CEOs, deviously sought for themselves large chunks of the loot they pillaged from the coffers of their banking institutions. It never mattered to them that they were playing with other people’s money, poor, helpless customers to be precise, they simply lusted and groveled for the good life.
There is no gainsaying these incumbent CEOs or MDs sheepishly kowtowed and still kowtow to the excessive demands of their principals and deified clients outside the walls of their banking institutions, what thus become shadow representatives of their will and demands.
Fears abound that with the current level of vulnerability of the nation’s banking and oil sectors, the Nigeria may be in for a devastating and protracted download plunge down the steep ravine of the banking cowboys and oil turks’ ruthless and risky profiteering drive. There are also fears that the impending doom could spell the hoarding of money in the hands of a rich, powerful few.
As a result of the bankers’ banditry, darksome clouds are hovering over the country’s economy thus triggering deficits across the nation’s economic subdivisions and giving rise to panic in several quarters.
The fears are however, hardly far-fetched considering the severe paucity of funds that plagued the nation’s public institutions recently. Until President Muhammadu Buhari offered financial lifeline to the various state governments and other public agencies, federal Ministries, Departments and Agencies (MDAs) were finding it difficult to fund their capital budgets; some were unable to reach 50 per cent of their budget, essentially due to inadequate cash backing from the Budget office. Few months ago, the former Minister of Finance, Ngozi Okonjo-Iweala, was at the National Assembly to defend her office amid the looming crisis. She admitted that though there had been a shortfall in national income, budgetary allocations had been steady, even higher than pundits were claiming. She denied that any money was missing in the excess crude account and Nigeria wasn’t broke even as MDAs shrilly complained that the Budget Office was not releasing money.
Consequently, local contractors could not be paid for projects been executed by them thus stalling their work. Even state governments could not pay salaries.The situation according to economic pundits, is a result of the country’s desolate financial sector.
Amid the crisis, uneasy calm saturates the nation’s banking industry over local banks’ vulnerability to bad economies of the energy sector, comprising the oil and gas and power divisions. Economic pundits are worried, rightfully so, that a large lump of about N5 trillion in loans, granted to energy firms in the last two years, 2013 and 2014, might be unrecoverable. This may likely cast the sector into another nasty vortex of financial crisis.
Already, banks’ non-performing debt profile has risen over N546.02billion as at March 2015. The situation may likely get worse following the slump in the international oil market. Worried by the situation, the Nigerian Deposit Insurance Corporation (NDIC) recently decried the build-up of non-performing loans, stating that the loans increased from N286.09 billion in 2012 to N354.84 in 2014, and then, N546.02 billion as at March 2015.
Consequently, the Central Bank of Nigeria (CBN) has instructed every bank in the country to reveal and publish the names of their defaulting debtors in at least three national newspapers. In addition to exposing the debtors, local banks have initiated disciplinary measures against staff and account officers responsible for granting loans to defaulters in the energy sector. While some bank staff were demoted or redeployed from their units, others were not so lucky as they got sacked. Data on nine of the troubled banks revealed that the banks gave out a total of N4.668 trillion to energy firms in two years.
These grim statistics confirm the high exposure, the greater the risk of non-performance, even as many local banks suffered a raw deal from the energy firms.
In the wake of the rot, former Minister for Education, Oby Ezekwesili, has urged President Buhari to realize that a Nigeria they are inheriting is in need of complete change. According to her, Nigeria has to invest on human resources to help build creators and innovators of economic wealth which can help the nation to be competitive in the global world.
She urged the president to acknowledge that the country is totally broken politically, socially, and economically.
“We need a society that need to completely change not just the past but entirely envisage a new vision, a future that brings in those who are outside of the benefit of the development process. It will be a future that replaces the current fixation with natural resources, great economic development strategy with human capital based economic development strategy. What will happen is that the citizen will be more important, your investment being into the citizen that will make them become the creator innovator and producer of economic productivity,” she said.
According to Ezekwesili, “Today the things that will support that kind of investment in the citizen who is currently outside the benefit of the economic growth would include the right kind of education and skills building, this would mean that we will look at the average Nigerian young person who constitutes more than 50 per cent of our population as of more premium than oil.”

About Author



Related Articles


No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Write a Comment