The bad news comes in torrents. The CBN releases a list of bad debtors whose collective actions have nearly destroyed five of our largest banks. It reads like a who's who of our most prominent citizens, an indictment of our entire business and political elite.
Our Central Bank already has injected N420 billion into the five insolvent banks, namely Oceanic, Intercontinental, Afribank, Union, and Finbank. But it turns out, as we have always suspected, and as we pointed out already in these pages, that those five banks alone are going to need more than twice that amount, as our reporters explain elsewhere in this newspaper. The final tab gets hazier by the day, anything from N1 trillion to N2-3 trillion.
With each passing day we are discovering the extent to which our country had been held hostage by a small class of rapacious individuals, and how only a massive regulatory failure allowed it to happen. For example, our Securities and Exchange Commission basically went into a deep slumber, as insider trading and other forms of share manipulation became normal on our stock exchange. One of our stories today explains how the powerful used technical suspensions of listed companies to artificially prop up the shares of such companies, in order to maintain false valuations that covered their margin loans.
It is not a surprise, therefore, that our country's political and economic environment has become overheated. Nervousness reigns, and panic, it seems, cannot be far behind.
It helps none that rumours are raging like harmattan season wildfires, regarding the possible resignations of prominent bankers. Our president, away in Saudi Arabia to tend to his all too obvious health problems, has disappeared from view.
But this is no time to lose one's head.
For one, a panic will only make a bad situation significantly worse. While the banks in distress already have been identified and the CBN has moved to start taking care of their problems, several more banks are just borderline solvent. A situation in which additional bank chiefs are forced out may very well tip things over, causing widespread panic and leading to apocalyptic consequences.
Already we have reports of depositors moving their money from problematic banks to those seen to be less so. While that is bad enough, at least the cash remains within the banking system. A full scale panic, in which depositors start keeping their money under the pillow, or capital flight from the country accelerates, will have dire consequences for the economy as a whole.
The release of the biggest debtors list by the CBN late Tuesday was like a blast of frigid arctic air. For the first time ever, our fellow citizens have been able to pry into the bank accounts of our most powerful and politically connected elite. What they are seeing is that, by and large, the emperor has no clothes.
Ordinary people have always known, instinctively, that the game is rigged against them and in favour of the biggest of our big men. They have seen that many of these so-called prominent citizens routinely take loans that they never expected to repay-- so total has been the blanket of impunity draped over our country.
But now the fog is lifting, and we can see more clearly. We must demand justice and fairness.
We should refrain, however, from braying for blood.
Reader Comments (14)
post a comment
* = Required information