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AS the controversy surrounding the statement made by the governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi,
about the budget of the National Assembly rages on, the CBN governor has declared that politicians in the country, particularly those who participated in the second and the botched third republics, should be held responsible for killing most of the dead banks in the country.
The CBN governor, who delivered a public lecture entitled “Global Financial Meltdown and the Reforms in the Nigerian Banking sector†at the Abubakar Tafawa Balewa University, Bauchi, said that, “most of the people who killed Nigerian banks are still very much around us, they borrowed money and refused to repay them and when the banks died, they turned around and reinvested the money into their businesses with some of them becoming governors, senators, members of the National Assembly.â€
Mallam Sanusi, who said that he did not believe in the categorisation of the banks as ‘failed banks’, explained that, “the banks did not fail but were killed and we must do everything possible to find the killers of the banks just like would be done to find the killers of anybody killed by some people.â€
On the banking reform he introduced in the last 17 months, he stated that the reforms had brought stability to the banking sector and the Nigerian economy, adding that due to the measures put in place, no single bank in Nigeria had collapsed ever since the full implementation of the reforms.
He added that no depositor had lost money as a result of the banking sector crisis because, according to him, “the banking system has stabilised and the most affected banks have continued normal operation while modalities for injecting fresh capital into them, either by shareholders or through acquisition and merger arrangements, are being finalised.â€
The CBN governor further said that the reforms had also succeeded in returning macro economic and financial system stability, adding that overall output in 2010 was expected to be higher than in 2009, saying, “projections by the National Bureau of Statistics (NBS) showed that the real GDP in 2010 will grow by 7.85 per cent compared to 6.66 per cent in 2009. The growth rate appears robust but there is need to ensure that it translates into job creation and poverty reduction.â€
According to him, between 2009 and 2010, the volatility of the economy has moderated significantly explaining that, “headline inflation declined steadily from 15.1 per cent in end-2008 top 10.4 per cent in September, 2009, rising thereafter to 15.6 per cent in February 2010.
“Since then, it has maintained a downward trend to 13.4 per cent in October, 2010.â€
However, on the challenges of the reforms, he said that the major challenge was how to sustain and translate the stability into employment opportunities, because, according to him, “the link between major growth drivers, particularly agriculture and manufacturing, has continued to be weak,†there was, therefore, the need to urgently address all binding constraints to growth, he noted.
He also said that, “inadequate or absence of basic economic and social infrastructure remains a major binding constraint on Nigeria’s economic growth and development. There is, therefore, an urgent need to fast-track the proposed reforms in some key sectors of the economy, notably power and oil and gas sectors, to attract the much-needed investment and reduce large import bills on refined petroleum. There is also need to deepen the deregulation process in the electricity process and transport sector to attract private investment.â€
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