Sanusi will ruin economy if allowed to carry out liquidation of eight rescued banks

Central bank Governor

President, Association of Senior Staff of Banks in the country, Comrade Sunday Olusoji Salako has vowed that his Association will not allow the CBN to throw thousands of workers

President, Association of Senior Staff of Banks in the country, Comrade Sunday Olusoji Salako has vowed that his Association will not allow the CBN to throw thousands of workers out of jobs and bring the economy to a halt in its planned liquidation of the eight rescued banks if they failed to recapitalise at the end of September.

Speaking to Financial Vanguard in an interview in Lagos, Comrade Sunday Salako declared: “We will not even allow it to get to the level of liquidation because that will be very devastating to the economy. It will ruin the Nigerian economy. Look at the balance sheets of all the affected banks, if you take them out of the system, it will have a very reverberating effect on the economy if it will not grind it to a total halt.

“We will not even allow that to happen. If you recall, recently, a court said the regulator has no power to sack those managements without allowing them the opportunity to defend themselves. If you also recall, immediately after those managements were sacked, we held a briefing where we said the action of the regulator was too hasty. Much as we do not subscribe to recklessness on the part of our corporate managers, we also believe that due process must be followed in anything we do and that is why we quarrel with managements.

“The court ruling is a serious minus for Sanusi. Stakeholders will mobilise to the extent that is allowed under the ambit of the law to ensure that the governor does not exercise that power. He cannot sit down in the comfort of his house and throw the nation and the economy into chaos. How many of his family members are working in the industry? They are either in one big multinational corporation or living abroad. So, he will not know the pains of people just waking up and losing their jobs in thousands. We are having a lot of social vices because of policies that destroy jobs.

“So, why should we allow somebody who will not consider the environmental implications of actions before taking such actions? You will just travel overseas and talk without comparing the environments there in the advanced countries with the one you have back home. Leaders who are hypocrites will always want to compare Nigerian environment with advanced countries.

The environment is not the same thing. Today, how many of our industries are working? Power is still very epileptic and many factories that are struggling to stay afloat rely on generators and the diesel to power the generators has become so expensive. Yet, somebody is talking about liquidating eight banks so that the economy will crumble. It is better we mortgaged ourselves to the white men to come and manage.

Speaking on the CBN-appointed management he said: “We will tell you that we are not seeing much difference and significant departure from what it used to be. It is like you accused some people of stealing, you call them thieves and removed them. You thereafter brought people who are not any better.

What we are saying is that we have not seen any significant difference from the lifestyle of those who left and those who are there. If you look at them on individual basis, there are some of them who are modest and have been very hard-working. But we are talking of management of the rescued banks generally, if you seriously assess them, you will give them a very low mark. We have said before in some of our comments, that when they leave, some of them are going to be investigated and you will see that a lot of things will be uncovered.”

Commenting on the regular outburst of the CBN governor, Salako said: “For us, somebody who is a regulator should be seen more and heard less. You do not make comments that will aggravate or overheat the system. Like I will take over or liquidate all these banks if they do not meet their recapitalisation by this time and so on. We are saying he is stampeding these banks into taking hasty actions so that cronies of government, political patrons will buy them for peanuts.

“We are saying that is wrong. Why did you invest tax payers’ money in a system and at the end of it, you do not have the patience to see that reform process through? He takes a lot of hasty decisions. Now we have a lot of problems with our clients’ base. A lot of customers of these banks are becoming very apprehensive.

They are asking questions, what is going to happen? What do we do and so on? These banks are healthy. For instance, Intercontinental has returned to profitability, so also has Oceanic Bank. Union Bank just announced that it achieved about N189 billion profit-after-tax (PAT). This is a very significant development. We are not surprised because some of their toxic assets have been taken over by Asset Management Company of Nigeria (AMCON).

That has given them a lot of leverages and has made them to be able to clean up their books. We believe that is a very good development. Again, any reform that is targeted at reducing jobs is not a good reform, especially in Africa. Government is campaigning for job creation, but agencies of government and institutions of government are on the other hand implementing policies that are killing jobs. That is dangerous and must be stopped.