Tunde Fagbenle On His View On Lamido Sanusi

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Yesterday article by Tunde Fagbenle on Sanusi question, “One year After, Is Lamido Sanusi TheMessiah’ (?), reveal much of the rift between Nigerian worlds. The gulf is considerable between Nigerians in US and Nigerians at home, especially in areas of market and in matters of banking and finance. Information mining I was told is increasingly lucrative in Nigeria. From this article I can understand why, why information or adequate repository of information is entirely rewarding and why information and pure play are keys for the market Nigeria. I felt it necessary to make relevant correction or provide some commentary on Fagbenle article since such matters concerns Sanusi and his supporters at CBN, in a matter between Sanusi and the people of Nigeria, between those who make it clear that his tactics has no place in banking anywhere and those his apologetics who mask the odor of . But it is late in the evening in NYC, North of Houston is noisy, and the rain falling in bits. You are forced to contemplate the veracity on the man Sanusi and his style of Banking. Has he done any wrongs? Has he really done any damage to the society that he is supposed to be a thorn in the flesh of his redoubtable?

But the man has courted controversy from day one, and he had publicly inveighed against a category of financial type who he nearly labeled as essentially corrupt, spanning of the levity that by the very nature such an Ones are incapable of good. We, the observers, are forced to chime on his vitriolic aghast the failure of Nigerian financial society.  But Nigeria was not the only country that was affected, the world had a problem of compressed value, and their common place VaR was widely misleading.

We enjoin the many few who turned a new leaf in banking and of course, and who saw that prices had to be paid and that it may seem evident that CEOs will very likely to lose their offices. Such Mae Culpa is not enough in understanding the nature of the converging cascade in Nigerian banking and what happened. For it may or may not have seen evident to Nigerians, that there was other motive perhaps influence at work in what may have been a white hostility of Sanusi. Such hostility to other bankers may define itself as intently, given the greater insight that Sanusi seemed to have acquiesced at the exit of Yar’ duwa from office. If only an observer will have noticed the descent of his manners at the inception of Jonathan Goodluck as president, it will become clear that the braggadocio of the man had other ingredients.

It is no doubt common place, that all kinds of rift exists in the Banking in the world, such rift may no doubt have exists in Nigeria society, and just like other rift in the banking world, Nigeria which bears itself in plain history. For not many will choose to avoid the indelicacy of the Nigerian Civil War, the caprices of property acquisition of much of eastern Nigeria and the confiscation of their bank accounts by Obafemi Awolowo, who for many years, blocked the salary of civil servants after the war, many of them still worked without pay. The pension earned by the Easterners before the eve of Nigerian civil war remained unredeemed. Many of these people died in their hundreds of thousands while the world watched, left without direction in terms of financing, and left without an institution for many years.

The war came to an end in 1970, and from 1970 began the decade of reconstruction which inadvertently formulated the mindset of Nigerian society. It is in these recovery years that the significant rift between the Nigerians began to appear, the rift was between those who became the courier of Nigerian Banks during and after the war, and those who earned their pittance through ‘small cracks’ of lending and family borrowing, through the ‘inlet’ of trade and trans-border trade, through caveat emptor; the smaller units of businesses scraping around the larger, the law forbidding the expansion and the ratio in all things for space and rights which impeded mid cap companies. Such adverse business environment, largely out of mistrust eventually created a sense of business management, more like a form of attitude to business and to living which the banks completely endowed from the 70’s onwards. By the early eighties, few years after the fall of Shah of Iran, the Shell Company was readying to break in big in Nigeria and there was new and newer necessity of other banks.

The much of Nigerian banking can be described in three categories, one the Government managed, the Commercial banks which had their horns from the civil war era, and the Investment Banks which began to respond to the need of change in the larger world. The curtain dividing the east from the rest may fallen by this time, but the rift was established, so much so that Banks were a quasi property of certain people, who may now be called Old economy, the Commercial Markets, the First Banks and the Union Banks. In future as better stability of the country is forged, there will likely emerge other banks in the country that will conduct social Industrial programs and development in many of its forms. But the rise of military in Nigeria, in an age of oil boom gave birth to Investment Banks, initially and ultimately owned by Northerners but this time, private families with long roots to the bigger banks gradually emerged.

The expanded nature of the world business in the 80’s at a time when Nigerian oil began to make headway in the world, enabled Nigerians of the Investment grade to earn their ranks through the stock market and through international trans-border trade and in end, even attempted with help from Lebanese business group to provide interest rate for many francophone countries. Such attempt made these Nigerians soft targets for the neighbors and in places Cameroun they faced open hostility. It also led to the first and formal fracas between Igbos, Ijaws, certain Urhobos, and Syrians and Lebanese. These Nigerians also warned against the impact of Euro, citing that francophone countries had very little to earn from the sub-categorization of their West African Markets if the franc is pulled. But they felt it necessary to outdo these new Nigerians and many of these Nigerians exited from these areas, poured into Lagos and some parts of the east as at early 90’s.

These Lebanese and others also played a pivotal hand in Investment Banks in Nigeria though private placement in the Nigerian stock market, but their real strength was the commercial where they supervised the inflationary curve price of building and real estate. There were others, especially from the far side of country and from the North. But the success of the older Nigerian banks was a product of military era, an era that fed on to many Investment banks, many of them entirely reliant on Nigerian federal grants and contract with few scattered businesses. When the military disappeared, these banks in their many numbers also disappeared. There was also the issue of insolvency, mainly comatose by non performing debt which accumulated in dues by inflationary pressure.

The main thing is that nothing was working aside the business of small administrations, and only a certain investment type could have supported these Investment banks. They rose so quickly and fail just as fast, with people losing much of their money. The commercial banks such as First Banks and other older Banks held out the hopes of other businesses and served as protections for buffer tycoons roving in and out of federal account. In those years of the 90’s Nigerian banking society began to evolve into a different dragon. As much Banks rose and failed, there was a newer group of Nigerians, but this time with an the edge of securities placement, with insurance which ones the home make of bigger banks, with newer avenues for merchant banking, with credit amortization and association, with the degrees of leases not unlike the commercial banks and where offering credit advisory and futures trading in all respect of investment management.

These new banks acquired the rent prolepsis of micro financing and experimented with credit technology available in the US. It was these groups that began to chart the contours of Nigerian business, and began to underwrite for small business almost as the big guys. But their small unit in several outfits helped these Investment banks to aggregate overtime gainer from Market Nigeria, though largely commercial but experimenting with quickly experimenting with size and the forms of businesses involving everyday bank in Nigeria. The case of banks rising and falling and the case of people doing business through foreign exchange and parallel market made it easier for alternative to exist. It also made it easier for smaller banks to also fail. Commercial banks were digging too deep into the country and they had little competition. Commercial banks became the mother laden of many areas of Nigerian economy as smaller ones failed.

The advert of Obasanjo as President did not change the status quo, in fact he even deepened the vast resources of these bigger banks in Nigeria, who by market estimate where several in number.

Obasanjo’s privatization scheme enabled some survival of these smaller banks, but the rise of National debt to 30 billion and clear absence of sovereign wealth and zero foreign reserve led to the appointment of Prof Charlse Soludo. When he arrived at the office as CBN Chair, it was clear to the business world that business of Nigerian banking and the stock market would likely change. His idea of bringing several small banks together was to ensure they were reasonably fitted to compete and that there were too big to fail. What the effort however did was break the power of the old dominating banks and many of collision began to offer just as much credibility as the older ones. This began a certain kind of race, not unlike Lehman and company in US and in Europe, but a race that almost naturally spike up price, where bankers went out of their way to look for customers even it mean treading on deposits that they were too thin. The bust was a natural consequence of that era, but more than anything, it brought down the inner walls of First Bank and their older groups in Nigerian Banking industry. Those who led the new and Nigerian revolution in Banking were small business administrators who in the era past struggled against the tide. There was also Nigerian made Tycoons who were willing and able to stake their profit on Nigerian banks, the era of new banking cleared the sea of bad obstacles and at once proved an upfront to older.

The helm of that First Bank who is the head of one these big families was a man by name Lamido Sanusi.

About Post Author

Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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