Of CBN’s Unremitted $49.8billion and the Banking Reform – Lanre Shadiya

Published:28 Jan, 2014

Among the current crop of government officials in Nigeria, Sanusi Lamido Sanusi, the Central Bank Governor ranks evidently in the top league of those highly respected for diligence, knowledge and professionalism. Since the commencement of his term as the CBN governor in 2009 he has contributed immensely to the nation’s monetary policies for which he has won numerous local and international laurels and accolades. This is not really a surprise looking at his experience in the banking industry. Friends and acquaintances that have had the opportunity of working with him directly or indirectly have always said a lot about the wealth of experience that he carries. Some have even referred to him as a banking genius. Personally, I believe, strongly, that the outgoing CBN governor has given a good account of himself in the five years that he has spent at the apex bank and he will be remembered for a whole lot of achievements.

There are four things that happened during Sanusi’s tenure which will not be forgotten in a hurry in Nigeria; the banking reform, the cashless policy, the aborted introduction of the N5,000 note and lastly, his $49.8billion unremitted crude oil revenue letter to Mr. President. The banking reform was the whirlwind that blew across the banking and financial industry with the objective of increasing the confidence in the banks and financial institutions and also create a decent industry with little or no room for personalization of public funds. The cashless policy mandated the reduction in the physical movement of huge cash sums for business transactions. The failed introduction of the N5000 billed, amongst other things, was aimed at making life easy during the transfer of high volume of physical cash. However, this was seen, in some quarters, as a sharp contrast to the cashless policy of the bank. The $49.8billion letter needs no introduction; it is still making waves like the beaches in Hawaii.

The banking reform which commenced in 2009 was perhaps the most far reaching for the common Nigerian of all of the four stated above. This is because it affected every strata of the nation as never seen before. Having noticed a huge gap between the financial statuses of most Nigerian banks against their financial claims, Sanusi embarked on a sanitizing mission to build a robust industry where transparency and professionalism will be the guiding principle. Although, this mission was perceived and also celebrated as a step in the right direction, it also contributed to varying setbacks for numerous Nigerians. Shareholders saw the value of their shares plummet outrageously to almost nothing. This, reportedly, caused some deaths. A significant number of employees in some of the affected banks were laid off including, in some instances, a whole bank branch. Some of these employees were not paid any severance payment despite the numerous years of service that they have offered their services to these institutions. Today, almost five years after, some of them are yet to secure any employment. The reform also contributed to slow economic activities in the country as the debt hole said to be created by the affected banks had to be filled by funds from the government – funds that could have been used to develop other sectors and make life more bearable for Nigerians.

During the banking reform, and even till date, the position, analysis and actions of the CBN headed by Sanusi continued to generate intense debates even within the banking industry. Numerous counter analysis were presented by analysts of great reputes on how the reform should be conducted and why the approached taken by Sanusi was not the best. As a nation, we accepted the reform as the best and we moved on.

Since the revelation of the error in Sanusi’s $49.8billion letter, I have continued to ask myself numerous questions that I believe we should be asking as a nation. But for the joint review done by the NNPC, Ministry of Petroleum and Ministry of Finance and the CBN governor and announced on December 18, 2013, we would all have continued to believe that indeed $49.8billion realized from crude oil sale has not found its way into the purse of the federal government. With all respect, I believe that the case of the unremitted $49.8billion was simply a case of wrong calculation but not wrong intentions. Considering the abundance of resources at the disposal of the CBN to compute figures of national impact, it can reasonably be concluded that all the apparatus at the disposal of the CBN governor to ensure the efficacy of data and figures used in the collation of figures available to the CBN failed. It will be responsible to assume that all the information and figures used in the computation must have been respectively checked and confirmed by the different relevant departments and directorates in the CBN before it was brought to the CBN governor as the unquestionable truth on the highhandedness of the NNPC. Regrettably, we realized on December 18, 2014 that not all that comes out of the CBN is true. Has it then occurred to anyone, that given this huge difference in reality and the picture painted by Sanusi’s CBN on the unremitted revenue, a similar error could have been made before the implementation of the banking reform? I am sure that torrents of counter opinions may trail this write up, but before you crucify my thoughts please ask yourself if you ever thought that the CBN as a whole, through the governor, will ever send a report to the president containing data with a bloated error of up to 450%?

I believe there is a need to critically review the information for the decision-making in the days leading to the banking reform. If anything, this will ensure that we eradicate the lurking doubts in the minds of a few of us. It will allay our worries regarding the possibility of an error as enormous as the $49.8billion unremitted crude oil revenue claims of the CBN. Let me make it clear that I am not advocating for any bank to be returned to its previous owners. I firmly believe that any executive of any bank, organization or establishment found wanting on his or her job should face the appropriate sanctions.  Recanting the arguments of some of the antagonists of the reform and going by the information surrounding the $49.8billion claim, one will see that there are similar occurrences which are too obvious to ignore; the CBN arrived at the $49.8billion independently just as it did in the calculation of deficit of the “failed banks”. CBN did not present its figures to the appropriate department/ministries for confirmation just as it did not request an explanation from the boards of the ‘failed banks”. The CBN advised the Presidency through Sanusi’s letter of 24th September of the colossal revenue loss from NNPC, the same way it advised it on the need to embark on the reform based on the monumental financial imbalance of the banks.

This is not a call for the review of all decisions made and actions taken by the CBN under the governorship of Sanusi Lamido Sanusi. It is simply a call to confirm that we have built our new banking industry on a robust foundation devoid of innocent mistakes and positively initiated but bogus claims.

Lanre Shadiya


The views expressed above are solely that of the writer and not necessarily that of Omojuwa.com or its associates.

  • Don

    In the same way that the truth came out for the unremitted cash, the bank CEOs would have been able to prove the cbn wrong by now.

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