By Deen Shehu
 Published
December 28th, 2008
Prior to the Charles Soludo-engineered reforms in the
Nigerian banking sector, the sector was all but moribund. It
was nothing more than a featherweight anchor that could do
little or nothing to keep the drifting ship of the Nigerian
economy afloat. ‘Distress’ was the word written boldly in
red on the faces of all major players in the banking
industry. If I lie, ask the former owners of the defunct
Savannah Bank, Societe Generale Bank and other failed banks
that marked the ’holocaust’ days of banking in our beloved
naija. The system then was slowly dragging itself to an
untimely extinction.
Then from nowhere (‘Nowhere?’ Ok, from Cambridge-Harvard
wherever), arose this young, brilliant and determined
professor of economics who like a modern-day John the
Baptist came with this slogan: “Repent! (oops! Sorry,)
Reform!! Reform for the kingdom of Soludo is at hand!!!” and
before you can hit the ‘R’ in reform, the Nigerian banking
industry was transformed. ‘Recapitalization’ and
‘Consolidation’ became the popular words in Naija’s
financial circles. The banking sector of Naija’s economy
became, within the space of two years, the most active
sector of our economy. In the stock market, banking shares
held sway (and still does), in the area of employment, that
one no even need Federal Office of Statistics data, all of
us know say na banks dey employ pass . Suffice to say under
Soludo, our banking system has never had it so good. Their
profits dey rise, their shares they appreciate, branches
they spring up everywhere for every bank (except for ETB, no
offence oh!) and the one wey concern us youths pass, dem
they employ like fire!
A lot of factors dey responsible for the mass employment of
hitherto jobless Naija graduates (and even non-graduates!)
by the Soludo-transformed banks. Chief amongst these
includes the positive impact of the Soludo Reforms, the
subsequent consolidation/merger of banks which increased
their profitability, the development of Naija’s capital
market post-banking reforms (all hail Ndidi Onyuike!),higher
profitability (engendered by greater trust by Naijans on
their banking system) leading to expansion of operational
scope (too much Grammar?) among other micro/macro economic
reasons. All the grammar aside, the bottom line be say, na
banks come be, in the aftermath of the reforms, the main
hope of Naija’s youths for employment. I lie?
Joy has a fragile body and it can break when least expected.
Rosy so far has been the picture for our economy powered by
the ‘2 HPs’ (Horse Powers) of Oil and a stable financial
system. But there’s trouble in The horizon (“horizon? We dey
stare am for eyes!”) in the form of the global economic
meltdown. Like an evil typhoon, it has thus far made
nonsense of the much-touted “stable” economies of developed
countries like Britain, Canada, France, Germany and wait for
it, the ‘Mighty’ United State of America! This economic
hurricane has swept away the financial pillars holding the
economies of the above countries leaving them staggering
like inebriated (open your dictionary!) giants. Thus far,
the Nigerian economy has weathered the storm of the
‘meltdown’ but the question wey dey be say, for how long? At
various forums, Charles Soludo have consistently reiterated
his belief that our economy will be unaffected by the
meltdown but worrying signals just dey crop up everyday wey
no dey make person confident at all! Like for now, our naira
is daily depreciating against the already
’recession-depreciated’ US Dollar and Pound sterling (yahoo
boys! Una dey hear?), there’s panic in our hitherto ‘Calm
and Booming’ capital market and the very recent indictment
of Zenith Bank Plc for money laundering no just portend well
for our economy’s immediate future and this na economy wey
be say na the financial sector (majorly the commercial
banks) dey drive oh!
My question for Soludo, Mansur Mukhtar (the new Finance
Minister), Ndidi Onyuike Okereke and other economic
stakeholders for Naija is these: if truly the world is a
‘Global Village’, do they really believe we can be insulated
from the effects of the ongoing ‘global’ economic meltdown?
If their answer is yes, how? I mean, make you check am, if
’advanced’ capitalist economies like the US of A and the UK
are still reeling from the effect of this economic
’tsunami’, what hope for an economy like ours that’s still
in the ‘primitive’ stage of capitalist development? What if
the permutations of our economic planners were to go wrong
by whatever margin and our worst nightmare come true, then
undoubtedly the hardest hit sector of our economy will be
the financial sector (banks!) and just like the case of
Fannie Mae and Northern Rock in the US and UK respectively,
na the commercial financial institutions go suffer pass. And
unlike in the above countries, ‘Bailout’ no go dey oh! (From
Yar’adua? Forget it).
Now let's see the worst case scenario for Naija banks: to make
ends meet (in terms of depositors’ obligations); they ’ll be
forced to ‘Right size’ (na euphemism for Layoff be dat)
their workforce, panic withdrawals go dey, their shares go
crash for stock market, some of their ‘unprofitable
branches‘ go gats close amongst other Right sizing measures.
And who do you think will be given the boots in the Right
Sizing exercise? The junior workers indeed! Those who came
into bank employments post Soludo reforms.
Now in the light of the above still hypothetical ‘scenario’,
I dey use this forum to appeal to Naija youths to shift
attention from banks for their employment needs. For now.
Fine, it pays (pun intended) to work in a bank now but it
only pays because we are being employed. What if (God forbid
sha), these global economic recession is to knock off the
train of The Soludo reforms off-track and the commercial
banks, the beautiful brides of the reforms and the current
darling of naija’s teeming unemployed youths, was to falter?
How we go do? To be forewarned they say is to be ... (yeah,
you got it right,) forearmed.
For more, check out ma blog @dinbaba-tinktot.blogspot.com or
http://myspace.com/dinbabaa
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