The list published by Nigeria’s central bank of those who owe money to the banks it has just bailed out makes clear that the situation has already gone well beyond just being a banking crisis.
The list cuts across the business elite and Nigeria’s regions and also includes many politically powerful figures. (And it doesn’t even appear that all those who could have been named as directors of the debtor companies have been identified).
It raises a question as to whether so many of the great and good are simply unable to pay their debts and if so what that means for business in Nigeria as a whole? If they could pay up, then why haven’t they?
It also raises a question as to how those ‘named and shamed’ will react, particularly those with major political sway, in a country where behind the scenes manipulation is a way of life.
The Economic and Financial Crimes Commission has set a deadline for the debtors to start coming up with money or face arrest, but its efforts to prosecute former state governors in the past were sometimes stymied and its former boss Nuhu Ribadu driven from office.
What will be the fate of Central Bank Governor Lamido Sanusi (left), only recently picked for the post by President Umaru Yar’Adua?
How well do you think the crisis is being handled? Please take your chance to vote below. We welcome your comments too.
Pictures: Akintunde Akinleye (Reuters); Central Bank of Nigeria
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I don’t think the fate of central bank governor is really important. Moreover his (the central bank governor) role is to control inflation not enforce debt collection. I think they are in serious trouble and most banks will not get their money from debtors especially if they have political ties. The government should strictly regulate debt levels to avoid putting itself in this stituation in the first place
- Posted by nigerialistthe house of representative should stay away from the on going cbn debt recovery and face their primary assignment.
- Posted by friday ejehWhat will the arrest of those owing so much to this Country do? What is required of them is to pay back their huge debts or begin to pay.On the other hand surely they have asserts at home and abroad, these could be turned into money and pay back to the Central Bank if in earnest the Central Bank Body is ready to do their honest duty to this broken Country. We wait to see what the Central Bank Body can do for us Nigerians aboad and at home.
- Posted by Dorothy Ugbethanks
Dorothy Ugbe
The truth here is there is no bank reform.It is common knowledge in Africa that when a new regime comes in, it spends more time and energy to discredit its predecessor.When Obasanjo established EFCC we all thought it was a right thing. How many people were actually prosecuted?The truth here is that it is Sanusi’s window dressing to gain public acceptance. Toxic loans and bail outs were done in the UK and US, how many started by firing the MD’s. It is simply a ploy by the North to pull down the south. The next thing you will hear from them now will be Islamic Banking. Let them continue pulling Nigeria down.Why have they not prosecuted Abubakar, Abacha, Babangida that stole more than these amounts that they claim have been recovered. Same to those who think the new CBN governor has the interest of the country at heart.
- Posted by ChukwukaThanks to the EFCC for its bold step. I encourage president Umaru Yar’ Adua and other commited nigerian to give maximum supports the EFCC may require in order to prosecute the MDs/Debtors or whatever they call themselves. In addition, the EFCC in its efforts to crack down on financial crimes should revisit the accounts of all the government departments and bring those found guilty of frauds, embezzlements or misappropriaton of public funds to justice including the past governors, ministers etc.
I do believe that nigerian Banks are not prudent enough in their lending policies but most of these problems were or being caused by illegal arrangement between the bank MDs/officials and the debtors to defraud banks.
Bank lending criteria/policies should be more robust to prevent future crises. The current crisis within banking industry in Nigeria is not akin to international economic crises. It is self designed and made by the people in positions of authority
It is time for a change. Time to emulate the west not in principles but in spirit.
Diran Bright Ayodeji, BA(Hons) Accounting and Business Information Systems, ACCA(Part Qualified),CeMAP (UK)
- Posted by Diran Bright Ayodeji