₦airaland Forum

Wireless does not equate to mobility. There are fixed wireless technologies, as well as mobile wireless.
Unrestricted mobility requires wireless, but the reverse is not true.

usbcable:
-the 4 months basic salary is not the banks policy,nor compliant with labour rules.(thats why they removed it from the system)

The labour laws (see my earlier post) does not mandate any payment to terminated staff beyond in lieu of notice. Without evidence, you cannot categorically say that the provisions of the banks policy is any better. The common value I have seen (even in the US and UK) is the 3 months basic salary, which if you add 1 month in lieu of notice makes 4 months.
If there is evidence that what they are paying violates either the labour laws or the company's policy, then you have every right to take legal action agaisnt the bank.

-the national health insurance scheme provides six months cover for redundant staff of any member company(do they want us to die in case of sickness)

Are you saying the scheme covers you automatically or that you expect the company to continue paying for your coverage even though you are no longer contributing your side of the bargain? Again in ability to provide documented evidence in support of your claims willmake it baseless.

-as for the shares, if i have a loan for 10,000 units of the banks shares and money amounting to 8,000 had been deducted from my salary.a certificate for the 8,000 units should be given to me.since the contract binding us together had been severed by them.

That argument is faulty. You have bought the 10,000 units already and have just not paid up on the loan you took. You cannot now decide to buy just 8000 units. The shares certificate is the collateral on your loan, and the bank is justified to hold on to your entire collateral as long as any part of the loan is unpaid

-all banks, Intercontinental Bank inclusive are members of ASSBIFI.

From ASSBIFI site http://www.assbifing.net/aboutus.htm
After the banking sector reforms of 2005, a number of banks took deliberate decision not to allow union or, to de-unionise their environments. The banks that are still stubbornly resisting the rights of their employees to unionise are: First City Monument Bank Plc, Access Bank Plc, Diamond Bank Plc, Standard Chartered Bank, Guaranty Trust Bank, Fidelity Bank Plc, and Equitorial Trust Bank Plc, Nigeria International Bank Limited, Spring Bank Plc, and Intercontinental Bank.

Do you have a president/secretary for your ASSBIFI unit?

what is being demanded is what ought to be given and not som special treatment.
the bank knows this cause there is a signed agreement to that effect.Moreover, the labour we are not contract staff.HABA.

Do you have evidence in support of these entitlements? It is what is on  paper that will determine if what you are demanding is or not special treatment

this is corporate terrorism on their part

Nah. its just cold hearted business 

While I sympathize with you on the loss of your job (its an harrowing experience), I still don't get what the management has done wrong.
If I understand your posts correctly
- You are getting 4 months basic salary as severance pay. That the computation is based on your basic salary is a function of the company's compensation scheme.
- Your health benefits were terminated. It would be unfair to expect the company to continue providing medical benefits to terminated employees, particularly when some might seize the opportunity and abuse it.One could make argument for a grace period for those that are on long term management like pre-natal care.
- Share certificates being withheld as collateral would be justifiable in cases of those still owing the company. For those that have reconciled their loans and obligations, it would be illegal to do so as the shares certificate is the sole property of the individual.
- The denied access to terminal benefits seems a cheeky move, but was only effective because the members of staff didnt have personal copies (which they are entitled to).
- As to the ASSBIFI, I didnt know that Intercontinental was unionized. If not, then ASSBIFI has no locus standing

You might desire a more favorable treatment, but all these are far from malpractice on the part of the management. You can not expect the management to willing spend more than they need to.
The bank is not the Red Cross, and you were not a volunteer worker; It is strictly business.

usbcable:
to make it clearer, our letters has the following details:


DISENGAGEMENT
We regret to inform you that your services will no longer be required with immediate effect.

In accordance with the terms of your employment, you will be paid one month basic salary in lieu of notice in addition to other benefits which you are entitled to (if any).You will however be advised of the position of your terminal account as soon as this has been computed.

Management has also approved that you should be paid three months basic salary as ex-gratia.

Please hand over all the Bank's assets in your possesion to Human resources department.

We thanks you for the services you have rendered since you joined the Bank, and wish you success in your future endeavours.

Yours Faithfully,
[/b][b]Intercontinental Banks Plc[/b]

[b]Habila Amos
Head,Human Resources

so what else do you want from the management?

Go and preach that to the criminals that keep on vandalizing FO cables

I think writing professors works better at lower ranked programs. Most professors at top programs are busy enough and get tons of such email. You will be lucky if the guy reads it, talk less of replying. You often would get a generic response from such.

You will surprised how much of a 'main route' the backdoor has become. A lot of people gain admission into top programs thru direct personal recommendations or by proxy recommendation (e.e an old colleague or student of the professor). It is not uncommon to find research groupd being dominated by people of a particular nationality. Undergrad research in a school of interest is definitely a very good way of getting into top programs. You could also look into the diversity angle. A lot of schools have diversity office that try to increase the number of minority students in grad programs in Engineering.

For schools you are still waiting on, you might consider contacting a Nigeria/Black/minority professor in the department or if possible going to see them in person. Even for schools that have turned you down, there is nothing that says the initial rejection is final. If you can convince a professor to be willing to take you into his group, even the rejection can be reversed.

Feel free to be pedantic. The general phrase will be termination of employment (happy?), and their entitlements remains a function of the reason for termination and the terms of employment (including labor laws).
That Zain paid off some of their staff does not mean every company is required to do same. Like I said earlier, unless you are in the know of the terms of employment and reason for termination, you cannot conclude that the company acted unlawfully.

Pension and gratuity applies when you retire and  not when your employment is terminated.

Notes:

Nigeria Labor Act.
11. (1) Either party to a contract of employment may terminate the contract on the expiration of notice given by him to the other party of his intention to do so.
    (2) The notice to be given for the purposes of subsection (1) of this section shall be-
            (a) one day, where the contract has continued for a period of three months or less;
            (b) one week, where the contract has continued for more than three months but less than two years;
            (c) two weeks, where the contract has continued for a period of two years but less than five years; and
            (d) one month, where the contract has continued for five years or more.
    (3) Any notice for a period of one week or more shall be in writing.
    (4) The periods of notice specified in subsection (2) of this section exclude the day on which notice is given.
    (5) Nothing in this section affects any right of either party to a contract to treat the contract as terminable without notice by reason of such conduct by the other party as would have enabled him so to treat it before the making of this Act.
    (6) Nothing in this section shall prevent either party to a contract from waiving his right to notice on any occasion, or from accepting a payment in lieu of notice.
    (7) All wages payable in money shall be paid on or before the expiry of any period of notice.
    (8 ) If an employer gives notice to terminate the contract of employment of a worker who has been continuously employed for three months or more, the employer shall not be liable under this section to make any payment in respect of a period during which the worker is absent from work with the leave of the employer granted at the request of the worker.
    (9) In the calculation of .a payment in lieu of notice, only that part of the wages which a worker receives in money, exclusive of overtime and other allowances, shall be taken into account.

20.  (1) In the event of redundancy-
            (a) the employer shall inform the trade union or workers' representative concerned of the reasons for and the extent of the anticipated redundancy;
            (b) the principle of "last in, first out" shall be adopted in the discharge of the particular category of workers affected, subject to all factors of relative merit, including skill, ability and reliability; and
            (c) the employer shall use his best endeavours to negotiate redundancy payments to any discharged workers who are not protected by regulations made under subsection (2) of this section.
    (2) The Minister may make regulations providing, generally or in particular cases, for the compulsory payment of redundancy allowances on the termination of a worker's employment because of his redundancy.
    (3) In this section "redundancy" means an involuntary and permanent loss of employment caused by an excess of manpower.

Gbawe:
I agree and to that extent I suggest that you , and anyone else interested in an enduring solution for our power supply problem, study the report below in detail. It contains many "case studies" of nations that have done what me must now do. National Models like those for Malaysia , for obvious reasons , indicate the direction Nigeria need to head towards.

http://www.ieej.or.jp/aperc/final/deregulation.pdf

"The lessons from the Malaysian case study are:
In some developing economies, the potential benefits of opening energy markets to full competition
must be balanced against competing political, social and economic policy objectives, such as
extension of electricity networks to all communities, and maintenance of tariffs at prices poorer
consumers can afford".

A look at the Malaysian case study shows that the sector is dominated by majority government owned companies, with complementary effort from private companies in the generation phase. Tariffs are still determined by TNB with governmental approval. This is far from a deregulated sector. Malaysia has 3 regions:

Peninsula has about 80% of the population
- TNB (a majority government owned company) has sole control of the transmission and distribution network
- Dominates the generation sector producing 11,296 MW as compared to about 6,000MW from IPPs

Sarawak has about 9% of the population
Syarikat SESCO Berhad (which is 52% state owned) controls the entire market (generation, transmission, and distribution). Total capacity is 855MW

Sabah has about 11% of the population
Sabah Electricity (which is 80% TNB and 20% Sabah state) also controls the entire market (generation, transmission, and distribution). Total capacity is 785 MW

Total generation in malaysia is 19GW where peak demand is just about 14GW. The government owned entities generate about 13GW which is over 90% of the peak demand and about 70% of the total capacity. Unfortunately, Malaysia has run into one of the pitfalls of energy markets in that, due to the power purchase agreements,  the TNB is having to pay for the excess generation by the independent power producers (IPPs) even though its of no use. The increasing cost has led to increased tariffs on the people, where the IPPs are enjoying huge profits.

Still we have to note the position Malaysia and some other countries were before they embarked on their privatization exercises. A lot of those countries needed funds from the private sector to help them increase their generation capacities, and not to solve their transmission and distribution problems. Ours is not a funding problem.

oyb:
^^^^

dude, you missed it there

usbcable is right. the process of laying off staff that these banks are following is disgraceful.

this is not a case of dismissal, and as such workers are enititled to diengagement benefits.

in som ways, the actions of the new helmsmen make me wonder if nigeria wil ever progress - these are the sorts of actions we can expect from any Nigerian company when they are laying off workers

I have not said that they are not entitled to anything, but that one cannot just assume that they are.
Unless you have seen their dismissal letter that states why they were dismissed, and their employment contract that states that they are entitled to the benefits, you position is baseless.

SEFAGO:
hehe, I have gotten so many rejections in the past two days its quite demoralizing. I am a few steps away from breaking into tears

pele, dont give up hope yet. Have a friend who applied to more than 5 schools and got rejected by most, until he finally got an offer in late may from one of the top ones that he had given up on.

soreola:
anybody can correct me if i'm wrong but i believe that says that,

a mother or father who did not give birth to a child would not help that child out without God telling (or helping) them to.

Its more like:
My biological mother can not aid me in my need without God's help; My biological father can not achieve anything for my sake without God's help.

What is needed is splitting NEPA and making the various units autonomous. Controlled private investment can be utilized. A level of deregulation would allow private entities to participate on the generation side, but as competition is absent, same cannot be done at the transmission and distribution end.

The tax is BS and should be resisted.

usbcable:
soludo built ''mega banks'' but didn't monitor them adequately, thus nigeria biggest problem(corruption) crept in the form of corporate corruption.
sanusi duely tried saving the banks from ''supposedly collapse'' and this he did(still doing)with brute force.

Now in the name of lack of corporate governance, akingbola, ibru, atuche and co are being prosecuted.
Staffs of banks both healthy, satisfactory, shaken and what have you have been laid off.

But my crux of the whole issue is, why would a ''CBN administered'' intercontinental  bank[b] lay off staff(not contract staff) with years of service to the bank and say they are not entitled to any gratuity or benefit.[/b] Definately that is not cooporate governance nor a sign of Integrity as claimed by SLS and Mahmoud Alabi(new MD of INTERCONTINENTAL BANK).[color=#990000][/color]

and there are so many atrocities that is being done against those of us that were disengaged last year.

Your entitlement when laid off is a function of the reason you were laid off and the terms of your employment e.g. when you are fired for malpractices you usually dont get anything (and that obtains in most parts of the world)

Gbawe:
like I said before , a fully deregulated sector does not mean arbitrariness. Entrants to a fully deregulated sector have operational guidelines they will have to strictly adhere to . That is what I mean by "regulatory laws" . These guidelines, enforceable by law, will ensure that everyone is protected . Many argue as you do i.e a fully deregulated power sector means anything goes . That could not be further from the truth. Essentially , in a fully deregulated power sector , competion and choice flourish. Safety, efficiency, value for money, market descent into monopoly and other consideration concerning suppliers and consumers are essentially taken care of by the guiding regulatory provisions. A convened board would still have to screen entrants into the market and subsequently approve licence for those who meet required conditions and pledge to abide by supervisory laws. Stating that a fully deregulated market needs regulation is not contradictory at all. It simply means that participants at all levels must be made to operate within certain parameters .

for example , many sectors are fully deregulated in the UK but the Government , through its various regulatory agencies , ensure that consumers and end users are protected . We can understudy what has worked well elsewhere when full deregulation has occured.

"Oftel The Office of Telecommunications (Oftel) (the telecommunications regulator) was a department in the United Kingdom government, under civil service control, charged with promoting competition and maintaining the interests of consumers in the British telecommunications market. It was set up under the Telecommunications Act 1984 after privatisation of the nationalised operator BT".

I think you are using the wrong terms to describe things. Deregulation is the removal of government influence on the operation of market forces. Thus under full deregulation there is NO government influence on market forces i.e. government has no influence on the price, demand and supply in the sector. What you are implying ' made to operate within certain parameters'  is partial deregulation.

Under a fully deregulated regime, a power generation company is free to determine what quantity and at what price it provides energy. The fact that the sector (due to infrastructure) is not an open market and you cannot have local competitions means that under full deregulation companies can hold regions to ransom on the short term and possibly long as well. Essentially the free market forces that helps to implicitly regulate the sector are absent in the sector and thus it should never be fully deregulated.

If we want to analyze case studies, we should limit it to the power sectors, as others, like telecoms or oil & gas, are different ball games. Then we should put things in local context.

Gbawe:
I will not be drawn into a debate over this as that will mean we will be here for the next few days. Suffice to say I think that it is unlikely you are correct considering that full deregulation is backed by Fashola, many progressive administrators, many Nigerian technocrats, many power analysts and now the CBN Governor .

Full deregulation does not mean arbitrary madness and rogue conduct . The Government will still regulate the sector. Guidance regulatory laws is probably the most important factor that will determine the success or failure of any deregulation excercise. If regulatory laws are robust, well thought out, clearly defined and vigorously implemented then full deregulation of the power sector will mean constant electricity for Nigerian States with well-intentioned leadership. It will also facilitate tailor-made solutions for Nigerian States that will work best for a nation where States with progressive leadership are deliberately slowed down because of mediocrity elsewhere when it should be the other way round i.e the indolent should be shamed into keeping up with the best with policies , like full deregulation, that enables those who know what they are doing to move forward unimpeded.

You should make up your mind. You do not regulate a fully deregulated sector. Under full deregulation, the government has no say in how business is done in the sector e. g.the road side groundnut selling market.

Most people in Nigeria that talk about the power sector know little about what they are saying. Most of them dont even know the problems with NEPA. The unusual nature of the commodity makes it difficult to apply the usual economic and business models. A typical example was the failed electrical energy market and subsequent enron scandal of the US, despite several people flaunting it as the next step in the evolution of the market.

What we all want is the delivery of predictable electrical energy, and an efficiently run National system, and not a profit driven ad hoc market that follows full deregulation, is better suited to delivering that without compromising the interest of the public.

formunt:
[b]Sorry to say Electric Generation and Supply is very,very hard. [/b]Nigeria should try to buy than plan to generate. Nigeria could start buying and gradually learn to generate.
Do no forget Ajaokuta iron and steel and that Aluminium plant
Nigeria cannot because of politics and norther contractors who just pick up cheques for doing nothing.  No one actaully question them about the contract. pay is pay.a
Acountant General said you must pay for the contract not finished.
You must pay or you losses your job. This is Pay Office experience. The same applied to the Central Bank. Contracts payments. Just pay
So just advice nigeria to buy than to generate to avoid white elephants.

Are you sure you know what you are talking about?
For your information, generation is the easiest of all the phases.

EzeUche:
How specific can we be? If the majority of the people who committed these atrocities were Hausa, then we should say they are Hausa. I will call a spade a spade. The actions of a 'few' do sometimes reflect the people as a whole.

It only takes a 'few' to paint a paper that is white, into a paper that is black. If I read my Bible, I see that God punished an entire group of people for the actions of a few.

Very rich coming from a guy who would likely disagree with attributing the Nzeogwu coup to being the will and action of all Igbos

Full deregulation will only move us from the frying pan into the fire.
It was the same argument that was made for the down stream oil sector, and we have all seen how well that worked as we no longer have fuel scarcity
What we need is competent people in charge, and Nigerian giving them the support they need to be effective, not people who are unwilling to pay their bills demanding for uninterrupted supply. Its a 2-way street.
Partial deregulation of the generation and/or revenue collection are worth exploring. The agency should be made autonomous (not privatized) to improve accountability.

egift:
It is obvious that Soludo and Sanusi have run things at the CBN very differently:

SOLUDO: _{When he took mantle of leadership in CBN}
Saw a very weak system. He hit the ground running in no time. Restructured the system in no time.

Nigerian Banks were stronger, haring, selling shares, giving loans, new businesses springing up, giving bonuses to shareholder, establishing branches, private and government projects were executed, investments from within and outside, I even saw a lot of guys doing seminars - writing books on stocks - making cool cash, opportunities and hopes everywhere, the going was just good.

When he was done, thinks were just fine.


SANUSI:_{When he too took mantle of leadership in CBN}
After after a careful look including the observations he had when he was at First Bank, he saw that although this house is well designed, booming, painted and more, that there were some bricks that make up this house that has falling. There were not missing because those that leaved in that part of the building gave them to some people but have not been returned. I hail Sanusi for observing this.

But instead of him getting whoever that gave/took this bricks to return them - and keep building and painting this great house (economy) of ours, he rather came in front of the house and shouted started shouting - "all the people living in this complex, do you all know that most of the blocks used in building it have been borrowed out or stolen!"

What do expect the residents to do, hell run! People started disposing their stocks, the prices started falling, banks started relieving workers, borrowing stopped, so was investments, and others. Now its banks chiefs loosing their jobs, CBN boys taking it over, CBN investing some money, now owning the banks (as major shareholders), London firms investing funds in three banks for development (now they too are stakeholders - they too now have a say).

so what happened between Soludo leaving and Sanusi taking over that caused 'just fine' to become 'falling'?
You cant eat your cake and have it. Its either Soludo left behind a mess or Sanusi lied about the state of the banks when he took over.

paddy_lo:
u are beating around the bush on this one. . .
i have told u a small bank cannot fund big ticket items

do u know how much a power plant or oil rig costs?
how do u expect to fund it if u dont have the capital

so a bank that cannot fund big project cannot survive? shouldnt  banks be left to determine where they want to invest and be profitable ? why the forced growth? This is the main question you should answer. The rest below are irrelevant to the original question I asked of 'what problem was solved by the consolidation'. Something having pros does not make it a solution to a problem unless that problem existed prior to it and disappeared after.
For example, prior to consolidation, was there a p[roject that the financial sector couldnt fund and were forced to source foreign investments?

or u expect our banks to just be engaged in opening savings accounts?and thats it?,commonbanks those days depended on it for survival. . trust me there is no bank in the u.s that depends on trading in the black market for survival
u should be happy those days are gone

Prior to Sanusi, Banks were still round tripping heavily, and even after sanusi, I doubt they have stopped and most likely just become more cautious. round tripping will stop when the mallam stops selling forex on the road side.

banks drive growth,u cant go anywhere without big banks to lend to improve infrastructure
because our banks were small our economy was small. . not the other way around
now our banks are bigger,we have a bigger economy and catching up on south Africa fast
see my point above. . .

Should have guessed that you are another HD proponent. so its the bank that grows the economy. That logic has failed in every developing economy that it has been tried in. Its is the argument behind SAP and all the foreign borrowing, and we all know how successful that was.

it was of course,but in those initial stages it took a consortium of banks
nowadays one bank can fund such loans easywhich is a good thing,why would u want to be stuck in the dark ages

Whether individually or by consortium, deals were getting funded, and you still have consortium funding even in the US and UK. Even till today we still have consortium funding in Nigeria.

every country wants its stock market to grow exponentially i dont see your point here
of course there was illiquidity in the markets then,stock trades were sometimes completed in 2weeks
instead of 2days,N200billion is just $1.5billion or thereabouts

the rate of completion of stock trades is because of computerization and not liquidity, and liquidity in the stock exchange is not the yard stick for measuring financial health. Exponential growth in the stock market is not a measure of true growth, as they often reflect market inconsistencies and not necessarily the value of the underlying corporate asset. A fine example is the dotcom bubble of recent past.

i am talking of liquidity in the stock exchange,not the economyto invest in the countrys economy,let them decide if its profitable or not
what exactly is your aim here to keep Nigeria in the dark ages

Investor decide where to invest on profitability and not the size of the banks in the economy.

how do u think asian countrys like indonesia,malaysia and thailand emerged if not through FDIs

You can go and study the industrialization process, and will find out that capital injection is the last stage, and not the first.

you have quadrupled GDP/capita in 10yrs from around $300 to about $1,400

per capita (PPP) went from $1078.353 in 1999 to $1795.5 in 2005 ($700 increses) and $2199.076 (additional $400 increase)  in 2009 with the bulk being was pre-consolidation

u have the largest telecomms market in Africa

That's primarily a function of p[population and not the size of your banks.

as for the things u mention,if the Govt deregulates those sectors u will get them

so why make it seem like consolidation had solved this problems or which wealth were you referring to being created for the masses.

no its not,the capitalization led directly to the issuance of credit and other financial products
because the banks could now afford to invest in new technologies there is no developing ,developed or emerging market without a credit bureau
u find one

Countries without CBs: France, China, Japan, Malaysia etc
Like I said its uncorrelated. CBs essentially help centralize consumer credit information and does not change the criteria banks use for lending

u keep harping on no profitable ventures? Nigerias business environment is known as one of the most profitable in the world so i dont get where u are coming from

So how come we are still heavily dependent on importation and our primary export remains crude oil? Shouldnt business be sprouting up here and there and the standard of living rising.

not true u can look to cuba for an example
modern economies are built on how sophisticated your financial sector is
from switzerland,to the uk,to hongkong,to newyork and brazil
its the same thing,stock markets drive access to capital
u have an idea,u form a company,u go to the market and u get funds to start-up your company
if your idea sells u become a millionaire,with other ppl that invested in you. . .simple

There is a difference in what an economy is built on and what characterizes it.

paddy_lo:
Good. . .

Firstly I asked for a problem definition, you instead gave me a run down of state of affairs before and after.

before bank consolidation u basically had 100 or so small banks that were rent seekers. .
they had no capacity to fund any real development of the Nigerian economy

So the funding of the GSM companies was not real development?

these banks engaged in FOREX round tripping. . and other non productive activities

and there is no more forex round tripping?  Why werent the banks guilty of sharp practices punished?

the market caps of all of them(those quoted at the time),was less than half of one major south African bank

and of what relevance is that? Have you considered the size and productivity of the SA economy.

the Nigerian stock exchange Market cap was about N200billion in 1999

and this is the fault of the banks or the Nigerian economy?

by 2010(after 4yrs or so of consolidation),it has risen to N7.5 trillion(was N15trillion or so in 2008)
thats a more than 500% increase in just 10yrs

That would happen if you raise the minimum capitalization of the banking sector by over 1000%

it means you have a bigger more liquid market

was there evidence of illiquidity in the market? or why would these be a positive thing. xcess liquidity is bad and increases inflation.

u can attract foreign fund managers

To do what, invest in a non-profitable venture?

u create wealth for the masses

So the standard of living of the average Nigerian has improved? So you have electricity, good roads, pipe borne water etc now?

and it means that for the first time Nigeria licensed its first set of credit bureaus

totally uncorrelated

am sure south africa has had credit bureaus for over 30yrs. . .
but u see my point

There are a lot of countries without credit bureaus

all these are directly tied to consolidation

No

but the most important thing is capital. .
a banks capital determines the amount of borrowing it can do
most of the banks were able to capitalize way above the N25billion minimum

some as much as N150billion. . .which is $1bn dollars
with a billion dollars in capital. . u can do up to $10billion in lending
depending on the leverage ratio used in the country

Capitalization level does not imply profitability, else why did some major banks in the US become distressed. No matter how much money a bank has available to lend, it is worthless if there are no profitable ventures to invest it in.

so now they financed roads,houses,dangote plant expansion,oil companies,GSM companies
credit to the real sector and mortgages and car loans,and so on soared

All it did is make the banks more aggressive in their lending, or did you think they were not giving out loans before the consolidation. Still that does not make the companies they are lending to profitable and has only pressurized the banks to take unwarranted risks.

that is the beginning of a modern economy
(the only missing ingredient was the risk profile of borrowers,  . .ala credit bureau's)

No a modern economy is built on a goodt industrial sector, educational system and social amenities

i can go on if u want

All you have said does not explain why a bank should require NGN 25 Billion minimum capitalization. The question was what was the problem that the increased minimum capitalization solved and not pro and cons of increasing a banks capital base? Tell what the problem was with a bank having just NGN 10 Billion in capitalization or even the existing NGN 2.5 Billion. Remebr prior to the increased minimum, banks like FBN had more than NGN 25 Billion in capitalization.

paddy_lo:
dont mean to get in between y'all street brawl. . .

but consolidation was the best thing to happen to Nigerias economy in well. . forever. . .
hope u dont expect me to explain cause its clear for all to see

no need to explain, just answer the simple question of 'which problem(s) the increased capitalization i.e. consolidation of banks solved'?

PapaBrowne:
No I'm not a Harod dorma proponent. I am very much aware that other factors like Human Capital, Technology, entrepreneurship etc are required for economic growth. All those would fall into place as financial capital becomes available.

and you are not an HD guy?  where would those other factor fall from, the sky?
The Nigeria problem has not been a shortage of capital, and until it is, your capital argument remains fraulty.

Neither am I saying the system didn't need a clean up. However, what Sanusi did is akin to using bleach on coloured clothes just to pull out a stain. Sad thing is that it would wash off both the stain and the color of the the cloth leaving the cloth useless and unwearable.
Thats exactly what has happened to our financial sector.

Unwearable? so the sector has collapsed? I guess all the other banks will be declaring losses at the end of this year then.

Biina, we can have this argument for the next 10 years and it is unlikely our positions would shift for the simple reason that our preferred future for the banking sector is probably in opposite directions. However, there is one thing we can easily agree on and that is the fact that Sanusi has done more to destroy the industry than he has done to build it.

This you have gotten totally wrong. What Sanusi has done is in the best interest of the sector, and should have come several years earlier before all the consolidation jargon.
The only thing that makes this discussion pointless is your failure to back up your position with facts and figures.

PapaBrowne:
I mentioned categorically that the financial sector was previously evolving to a stage where we would've been able to use these complex financial instruments such a derivatives and fixed income assets  to pool huge capital that would then be used to fund massive infrastructural projects.
If you notice, I used the phrase  embryonic stage- to pinpoint the fact that we hadn't started using these instruments, however the culture was been brewed and it would have been only a matter of time before we started enjoying these facilities.
Unfortunately,Sanusi destroyed the potential for these kind of instruments in the name of risk averseness!

Nigeria has a shortfall of 16 million homes. To put it mildly, that would cost $300billion.
To get just 25000 MW of electricity, which in real terms is grossly inadequate when matched with South Africa's 40,000MW, We need somewhere in the region of $100 billion dollars.
To catch up with the rest of the developing world, we need roads and rail valued in hundreds of billions.
There are other areas to be funded like Healthcare, Education, Water, etc.

Government cannot afford these kind of figures no matter the price of Oil.
The only way to do it is by developing a robust financial sector that would utilize leverage albeit with measured risk.That was the direction Soludo was headed. Yes it is risky and you can get your fingers burned, but it is about the only way forward.

Sanusi came in and started preaching conservative banking. Talking about risk management without fitting it to our unique terrain. His direction wouldn't lead this country anywhere but downstairs. Good news is that his game is over. Jonathan, without question, knows better than allowing the aimless and directionless man keep on ruining the prospects for our development.

You sound like an Harrod-Dorma proponent, who thinks that money/capital is the only  factor for economic growth.  Sorry to disappoint you, but that argument only holds in developed countries, and trying same in Naija is like pumping water into a leaking tank = wasted effort. It was the same line of thought that led Soludo to increasing bank capitalization and the only thing we have to show for it is a handful of banks that we can not afford to fail. Soludo put the cart before the horse and worsened a bad situation. He creted the EDW, encouraging the troubled banks to keep on leeching on the system, when they would have been left to fail prior to the mergers.

The financial sector needed cleaning up and not to be encouraged to invest blindly. Sanusi is doing what is needed, while you, my friend, are talking about what you want. Using 'complex instruments' under poor corporate governance is a recipe for disaster. Risk taking is encouraged not discouraged, by transparency.

PapaBrowne:
I didn't refer to the loans given out by the banks as complex financial instruments. I simply stated that Sanusi has killed risk taking and complex financial instruments are by nature very risky.
However, I stated that massive projects were beginning to get backed by the banks- TINAPA, MMA2, many Oil & Gas projects, etc. Nigeria was headed to a place where we would've  started using complex financial instruments to pool capital to fund massive infrastructure projects.

By complex financial instruments, I refer to derivatives and fixed income instruments such as options, warrants, swaps, commodity-based futures, auction rate securities, structured notes on assets and all the other financial jargons that have been created to enhance leverage.

Bonds are good, but it is boring and too simple and your expected income is in most cases specific. It only serves as a safety net.
Sanusi's risk averseness would naturally make him a lover of bonds. But in this era, bonds would never fund the huge financing gaps we have in power and transport infrastructure, housing et al.

Aren't same complex financial instrument the bane of the financial sector in developed countries?
Are you arguing that complex instruments make the system more profitable? That would be as silly as saying that the value of a company's shares affects its profitability (when its the other way round).
Complex instruments are the toys of finance managers as they essentially make risk assessments more difficult. Eventually when the market reconciles, members of the public end up having to pay for the excess of those in the financial sector. Still what has that got to do with the health of the banking sector.

PapaBrowne:
Never claimed to have more info than anybody. The nature of technology these days has made data available to virtually anybody that wants it.

Your claim is implicit when you make declarative statements like the economy is bleeding and stating that another poster has limited info.

Simply visiting CBN's website & downloading(they've stopped it) the weekly Forex Dutch auction transactions  by companies in all segments of the economy can tell U a million things about the Nigerian economy- that is if you know well enough how to utilize it. There are a million other ways to get data Biina, a million other ways!!

So the Forex market is your tool for evaluating the financial sector or do you think the CBN is responsible for the entire economy?

-The banks were in a pretty bad shape before the CBN intervention, however, there were no indications whatsoever that they were about to collapse.

So a bank that has a 1% CAR as opposed to the minimum 10% is not about to collapse?
The five banks who were perennial borrowers and/or on CBN liquidity support, owing 89% of the interbank debt to CBN, with over NGN250 Billion in guaranteed takings are not about to collapse?
Banks with liquidity ratio below regulatory requirements are not about to collapse?
Banks with over 40% of the loans being non performing are not about to collapse?
Please tell me what it will take for them to be "about to collapse" in your books'. Facts and figures please and not just ur opinion

- After Sanusi's intervention, the economy dipped sharply and stays as bad since then. Everybody , even those outside the sector know the negative impact of his action on their businesses. Credits have dried. 10,000 jobs have been lost. But most importantly, risk has been criminalised in a country where doing business is as risky as a bungee jump. Entrepreneurship is the victim.

Please provide facts and figure to support your claims of a permanent dip due to Sanusi's actions.
Also how has Sanusi stopped you from taking risks? or you do rather he leave in place executives that were cooking the books in the name of allowing risks?

-The correct course of action would have been a more calculated approach to clean the industry without negatively impacting on an already battered economy. But Sanusi brought his personal squabbles with CEO's to the forefront, and got everything wrong from the onset.

Please explain your more calculated approach and provide evidence of Sanusi's personal squabbles with the CEOs
- should he have left the corrupt CEOs in the office?
- Should he havel eft the banks to borrow more money in the interbank market when they have not been paying back on the ones they owe?
- should he have left the banks with their poor CAR and liquidity ratios?

BTW wonder what you will do if Sanusi remains in office till the end of his tenure?

Beaf:
I struck out the bit I don't agree with, so no re-read.
The other parts are in agreement with everything I've said so far. Whether fraud has been committed is not my issue as those cases are in court; my issue is Sanusi not having the personality, knowledge or intelligence to head the CBN.

and how does a post approving of Sanusi's actions support your position?

Its always sad to see the Sanusi haters using misinformation and/or disinformation to try and win their arguments.

@papabrowne
U claim to have more info than the rest of us. Could you then be so kind as to furnish the rest of us with your privileged data?
- What were the conditions the banks were in before the CBN intervention? did it differ from the claims made by the CBN that said banks were owing heavily in the Interbank market?
- What is the situation of things presently, and how bad have things gotten due to the CBN actions?
- What should have been the correct course of action for a non-sanusi CBN?

Again please provide facts and figures and not just your opinion.

nm

bawomolo:
hehe the more you know.

julius peppers is mad at the panthers. are the pats gonna release adalius thomas? the bears sure would be interested

I thot that was a certainty.
Its interesting that the roster structure of the NFL makes the game highly dependent on injuries. Most teams just need to lose 1 or 2 key players, and their fortunes change drastically (e.g. Pats & Welker, Steelers & Palomalu). Wonder if an increased roster size would help.

AjanleKoko:
Good feedback. Thanks.
Though I think using rooftops would be feasible if you were looking to power the individual housing units. Client was considering a centralized generation, and then build a localized distribution network.
Humidity is definitely a problem in the south, as the low radiation affects even radio propagation.
I noticed in Lagos that all the solar street lighting seems to have failed entirely. The rollout was obviously not well planned.

@biina, I didn't know you were in this profession.

You could say I get around

A-40:
@Biina
You and your Colts may need to wait till 2012 ohh! We wrestled the title back from the NFC only for una to give am back to them again! The Pats did the same thing in 08! We the Mighty Steelers want our spot back and we are on that DIY ish so Colts and Pats should fall back for the AFC'S tried, tested and trusted

Qualify for playoffs first.