₦airaland Forum

naijaking1:
Still waiting for anybody to show that Sanusi has a Msc in economics, not did some course work in masters. If you can't post an evidence about this, it's because he doesn't have Msc in econs. One of the issues that came up during his confirmation in the senate was that he failed to complete a course work in economics in ABU, but went to Sudan for Islamic studies.
How smart is a Kano price who couldn't complete a basic Msc in ABU of all places

haha. . Guy u go wait tire o, all na degrees, afterall, I ve an aunty whose PHD thesis was on the Preparation of oha soup, she studied food tech. She used to be a bigshot in the financial industry until Uncle Sanusi chocked everyone with his abracadabra policies.

naijaking1:
Still waiting for anybody to show that Sanusi has a Msc in economics, not did some course work in masters. If you can't post an evidence about this, it's because he doesn't have Msc in econs. One of the issues that came up during his confirmation in the senate was that he failed to complete a course work in economics in ABU, but went to Sudan for Islamic studies.
How smart is a Kano price who couldn't complete a basic Msc in ABU of all places

haha. . Guy u go wait tire o, all na degrees, afterall, I ve an aunty whose PHD thesis was on the Preparation of oha soup, she studied food tech. She used to be a bigshot in the financial industry until Uncle Sanusi chocked everyone with his abracadabra policies.

I don't think the issue of Sanusi's Islamic banking has been given due analysis on this thread especially as it relates to Nigeria's constitutional provisions for the existence of such.
Now according to the Organisation of Islamic conference (OIC) definition; an Islamic Bank is a financial institution whose statutes, rules and procedures expressly state its commitment to the principles of Islamic Shariah and to the banning of the receipt and payment of interest on any of its operations.
This definition alone shows why it is almost impossible to run islamic banking in Nigeria as it is being presently organized by the SLS managed CBN.
It is very important to emphasize here that In most countries the establishment of Islamic banking has been by private initiative and were confined to that bank. It was only in in Iran and Pakistan where it was by government initiative and covered all banks in these countries. It is worthy of note to affirm that the governments in both these countries took steps in 1981 to introduce Islamic Banking.
That is why today Iran accounts for the highest number of Islamic banks followed distantly by Pakistan whom unlike Iran only adjusted certain part of her countries constitution to accommodate it.
This is exactly where many Nigerians like myself have problems with Sanusi's Islamic banking; the attempt to overlook the secularity of our constitution and create rules different from what the Nigerian constitution stipulates for the operation of non-interest banking.
Nigeria is a secular state and its constitution is based on secular laws, it does not matter what an Imam, mullar or a fanatic CBN governor thinks, these laws are superior to any other laws in the land.
The totalitarian understanding of human rights by many a muslims is espoused already in places in Middle East, North Africa and the Sharia states of Nigeria and the consequences are clear in the persecution of non-Muslims, particularly Christians, with their civil, social, cultural and economic rights denied; their physical life is no less compromised as it has no equal value with that of Muslims under the law in those places.
The protagonists of Sharia banking claim it is their religious right under the Constitution. Any right justifiably guaranteed by the Constitution must be consistent with the Constitution; it must respect the constitutionally established institutions, procedure and bodies. The right must be exercised under the Constitution and not outside it or else we would have a right rooted in the Constitution but operating beyond the constitution. This is anomalous and this is the situation Sharia banking is creating.
The supreme executive, legislative and judicial bodies under our constitution are the Presidency, National Assembly and the Supreme Court respectively and from reports the Sharia bank under the CBN, a federal statutory body created or deemed to have been created by National Assembly, will be regulated by Muslim jurists or experts whose interpretations and regulations are guided by Islamic jurisprudence (depending on which school of jurisprudence one belongs), which is not subject to the constitutionally established governmental institutions. If the National Assembly enacted the BOFIA (Banks & Other Financial Institutions Act) providing for interest-free banking, then that form of banking must be run subject to the Constitution, meaning it must be operated according to the secular constitutional principles, otherwise, it would be unconstitutional. The idea of the Constitution creating an interest-free banking (Islamic Banking), through the National Assembly, that will operate outside of the Constitution is against the doctrine of constitutional rule of law and so a legal monstrosity and absurdity of no small scale. Truly, the belief of the Sharia banking advocates in the unity and stability of the country should be questioned seriously. The endgame of this constitutional anomaly is the gradual ousting and supplanting of the powers of the President, the National Assembly and Federal Judiciary in the regulation of the economic and financial life of the Sharia states that currently enjoy a great level of legal independence from the center as proved by the Ahmed Sani Yerima case.

kq:
That position is further exacerbated by SLS pushing Islamic Banking beyond the confines of what is expected of a Central Bank Governor. If a man's beliefs, religious or otherwise, do not stand in the way of his performing his duties, then there shouldn't be a problem. But what if a man tries to make atonement for past actions and uses his office? For instance, what if SLS is pushing this Islamic Banking issue because he is trying to make up for working in Riba taking institutions? Is that idea too far-fetched considering Sanusi's antecedents? Perhaps, this is conjecture but there is a reason why SLS is pushing Islamic Banking despite its failings elsewhere and its likely vituperations in Nigeria. If we ignore religion, what else can we point to as being responsible for his actions (Islamic Banking)?

I am merely giving an opinion on this particular point.

@Katsumoto i think you are now trying to delve into SLS mind and find the motive for trying to push Islamic banking, that will be something only he can answer. But the most important is whatever is reason might be lets not forget that Non-Interest banking in particular Islamic banking had been in the works before SLS ever bacame CBN gov. JAIZ bank did get a license during Soludos time but their efforts got a setback due to the increase in bank recapitalisation. Besides whether he is using at a form of repentance or not i dont see all banks starting an islamic banking arm or new banks just springing up under the guise of islamic banking. It is obvious to everybody that it is a form of banking, the blame for all the noise on this issue lies with both SLS and we the public imagine the Methodist Prelate saying just because of the word Islamic it is wrong thats like saying just because their is a cross on the Red Cross then it infringes on a muslims right. Now i blame SLS for some his utterances which are ill timed more often than not and dont address the publics yearning for more info hence making him guilty of putting the public at the mercy of CAN and media of course both this sources will definitely not root for anything associated with Islam not because they hate Islam but due to sentimental reasons.

I think we should put more focus on his works as CBN gov than just trying to pin a conspiracy on trying to Islamize Nigeria on him. i dont see any possibility of just turning every nook and cranny of Nigeria over to any religion in particular happening.

Why Kats is trying so hard to placate a lot of you muslims that wont see any opposing superior reasons to criticize your "TIN God" Sanusi is beyond me. As for me, I wont even indulge your sensibilities with all that uneccessary niceties as it is clear you lot do not want to respect that of others.
Before I even start with the constitutional incongruity of the attempt by Sanusi to usurp the superiority of the Nigerian constitution by  separating the existing laws that guide the running of Non-interest banking-of which his "darling islamic banking" is subsumed in it - from the one that will guide islamic banking practices here in Nigeria, it must be emphasize that muslims should stop seeing opposition to islamic banking or Sanusi as anti-islam or islamaphobia as that will help them look at issues objectively and critically without bias.
The notion of calling any argument with a muslim islamaphobia should be jettisoned.
    The possible bad scenerios that will take place once Islamic banking is introduced are glaring for all to see; I dont know if you have been following extremist statements credited to islamic radicals and fundamentalists in the north-Boko haram & co. They claim to have carried out attacks on Banks in the north and promise to do more as these banks according to them do not live by the principle of sharia financial laws & as such do not serve the people any good. Now imagine what will happen when islamic banking then comes on, my guess is, all the conventional banks in the north will be violently and forcfully sent packing from the north & we will have a situation where the northern part is dominated by these islamic banks and the south conventional banks. This will further divide the country along north-south lines & heighten the problem, if SLS was an honest man, he would care about that first before vehemently pursuing his beliefs as it relate to finance.

Jude Ezeanokwasa PhD
1. Introduction
n the recent past I have read some articles
on the introduction of Islamic Banking in
Nigeria under the Sanusi's headship of
the Central Bank of Nigeria (CBN). None
is as mischievous and provocative as the
efforts of Mr. Disu Kamor, the Director of
Media and Communications, Muslim Public
Affairs Centre, (MPAC), Nigeria, to malign
the Nigerian Christian Community as an
anti-Islam, intolerant and unpeaceful
people. His article"Kamor: CBN, Islamic
Banking and The Guardian"
was published on the June 13, 2011 online
edition of your newspaper. My writing is
partly to respond to some of the
defamatory statements, disingenious and
disingenuous rhetorics of Mr. Disu and
partly to bring out some deeper
constitutional and practical realities
connected with the introduction of Sharia
banking and their threat to the cooperate,
integral and harmonious existence of
Nigeria.
In his defence of Islamic Banking he
quickly reverted to the illogical rhetoric of
regarding opposition to Sharia banking as
opposition to Islam, Islamophobia and
bigotry, thus calling opponents of Sharia
banking opponents of Islam. This is an
unfortunate logic which is like saying that
opposition to a Muslim is an opposition to
Islam, implying therefore that if a Muslim
for instance does something wrong it is
Islam that did something wrong. This is
self-defeating reasoning and serves no
more than a media stunt.
The search for the unity of the country
has never been more expedient than now
with the sharp ascendancy of religion to
the center place of the country. The Sharia
in the north has drawn a big wedge into
the heart of the country cracking it up and
pushing it apart. With the same intent is
the issue of Sharia banking, which should
however, not be a surprise to anybody
that understand the aims, purposes and
operations of the OIC.
2. Sharia Banking and Right to Freedom
of Religion
One argument of Mr. Kamor in defence of
Sharia banking is built on the religious
rights of Muslims. He reasoned that "In
any secular country that respects citizen
rights, Muslims must have the right to
practice their faith totally, and it is a
constructional duty that the state does
not interfere with this right, but enable
it." This position is born out of an
unfortunate misunderstanding of the
most elementary nature of human rights
rooted in the nostalgic desire of some
Muslim elite to create the pre-state
Muslim community. (see An-Na'im, A. A.,
"Sharia Cannot Be Enforced as State
Law",http://blogs.law.emory.edu/
nigeriasharia/an-naim-article
) No human right is total or absolute.
Every human right including the right to
freedom of thought, conscience and
religion guaranteed by section 38 of the
1999 Constitution of Nigeria is in principle
derogable and is in actual fact limited by a
number of factors, particularly the
presence of people with other religions
who have equally the right to freedom of
religion and equality of their religions
with those of others, Section 45 of the
Constitution deals with the restriction and
derogations from fundamental rights and
it provides in paragraph 1 "Nothing in
sections 37, 38, 39, 40 and 41 of this
Constitution shall invalidate any law that
is reasonably justifiable in a democratic
society - (a) in the interest of defence,
public safety, public order, public morality
or public health; or (b) for the purpose of
protecting the rights and freedom of
other persons. That human rights of one
person are limited by the human rights of
others is captured by the saying that a
person's human rights begins where that
of others ends. This is an echo of the
saying of the French philosopher, Jean
Jacque Rousseau who said that man is
born free but everywhere in chains.
Rather than being a principle for a
capricious, selfish, fundamentalistic and
myopic interpretation of human rights as
Mr Kamor has done, it underlies the
principle of restraint and responsibility in
human rights. Any person claiming or
enjoying human rights has the obligation
of factoring into the equation the fact that
others have the right to enjoy similar
rights and so he must allow
corresponding space for them. This is the
inherent principles of tolerance and
restraint in a genuine, reasonable and
democratic understanding of human
rights. The totalitarian understanding of
human rights Mr Kamor is espousing is
already in place in places in Middle East,
North Africa and the Sharia states of
Nigeria and the consequences are clear in
the persecution of non-Muslims,
particularly Christians, with their civil,
social, cultural and economic rights
denied; their physical life is no less
compromised as it has no equal value with
that of Muslims under the law in those
places.
Moreover, the issue of Sharia is a
constitutional matter and any person who
seeks to have the constitution maintained
especially with regard to norms that are
fair is a patriot and should not be
calumniated or branded an enemy of Islam
or termed islamophobic or given any such
names.
He who wants equity must be ready to do
equity. The protagonists of Sharia
banking claim it is their religious right
under the Constitution. Any right
justifiably guaranteed by the Constitution
must be consistent with the Constitution;
it must respect the constitutionally
established institutions, procedure and
bodies. The right must be exercised under
the Constitution and not outside it or else
we would have a right rooted in the
Constitution but operating beyond the
constitution. This is anomalous and this is
the situation Sharia banking is creating.
The supreme executive, legislative and
judicial bodies under our constitution are
the Presidency, National Assembly and
the Supreme Court respectively and
according to Mr. Kamor, the Sharia bank
under the CBN, a federal statutory body
created or deemed to have been created
by National Assembly, will be regulated by
Muslim jurists or experts whose
interpretations and regulations are
guided by Islamic jurisprudence
(depending on which school of
jurisprudence one belongs), which is not
subject to the constitutionally established
governmental institutions. If the National
Assembly enacted the BOFIA (Banks &
Other Financial Institutions Act) providing
for interest-free banking, then that form
of banking must be run subject to the
Constitution, meaning it must be operated
according to the secular constitutional
principles, otherwise, it would be
unconstitutional. The idea of the
Constitution creating an interest-free
banking (Islamic Banking), through the
National Assembly, that will operate
outside of the Constitution is against the
doctrine of constitutional rule of law and
so a legal monstrosity and absurdity of no
small scale. Truly, the belief of the Sharia
banking advocates in the unity and
stability of the country should be
questioned seriously. The endgame of this
constitutional anomaly is the gradual
ousting and supplanting of the powers of
the President, the National Assembly and
Federal Judiciary in the regulation of the
economic and financial life of the Sharia
states that currently enjoy a great level of
legal independence from the center as
proved by the Ahmed Sani Yerima case. In
this artifice, the intolerant is neither the
Christian community as insinuated by Mr.
Kamor nor any other person raising his/
her voice for constitutional secularity and
against Sharia banking, but are the ilks of
Mr. Kamor who want to create exclusive
economic, financial, labour and political
channels for themselves from the public
coffers.
3. Islamic Banking or Interest-free
Banking?
The efforts of Mr. Kamor to prove that
interest-free banking is synonymous with
Islamic banking are most devious and
ludicrous. He had attacked the Guardian
Newspaper for pointing out that what the
BOFIA approved was interest-free
banking and not Sharia banking. This is a
matter of simple logic. Islamic banking
may offer interest-free banking like any
other system of banking but there is no
way interest-free banking is coterminous
with Islamic banking. This is analogous to
the case in Indonesia where some Muslims
argued that no religion apart from Islam
should use the Arabic word Allah for God
on the claim that it belongs exclusively to
Islam. The justices of the Indonesian
Supreme Court knew better and overruled
them stressing that Allah is the Arabic
word for God and is open to anybody and
not a property of Islam. As I already said,
if the National Assembly created the
possibility of interest-free banking, such a
banking system must operate according
to the secular principles of the
Constitution, the jurisprudence governing
it must be a secular one and nothing else.
Consequently, any attempt to foist Islamic
Banking into non-interest-banking is
illegal and unconstitutional. By doing this
Lamido Sanusi is coming clean of his
intentions and agenda at the CBN. We can
now understand the motivation for his
dictatorial sack of some Bank CEOs and
replacing them with people that would be
beholden to him. Some courts are already
condemning his actions. We can now
understand why he took energy and time
going around in the northern parts of the
country denigrating the conventional
banking system and campaigning for
Islamic banking as the new messiah to
save Nigeria from economic recession.
4. Christians and Muslims; who hates
whom?
It is as ironical as it is curious that Mr.
Kamor in his article accused members of
the Nigerian Christian Community of
hatred and intolerance towards Muslims.
According to him, "The Nigerian Christian
community has to re-assess how it deals
with the Muslim community in Nigeria as
regards legitimate yearnings, aspirations
and rights of the Muslims community.
Unbriddled hate and religious antagonism
of some within that community of
everything Islamic is only a bad reflection
of their own state and how much they
have moved away from the peaceful and
tolerant pristine gospel that Jesus Christ
(AS) preached and live by." This is the
height of intellectual dishonesty and insult
to the sensibilities of the sincere people
that know the hatred and intolerance
exuding from the Nigerian Muslim
Community. It is extant rule of evidence
that he who vouches his good behavior or
attacks the character of the other person
makes his own character an issue. The
northern part of Nigeria undeniably has
Muslim majority while the south is more
Christian. On who hates and resents the
other, the statistics given by Dr. Mu'azu
Babangida Aliyu, a Muslim, the governor
of Niger state and the Chairman of the
Northern States Governors Forum says it
all: "Statistics of religious crises across
the country show that at least 95 per cent
of them occurred in the northern part of
the country and that is a matter of
concern to the Northern States Governors
Forum", (Vanguard, Online newspaper,
Saturday, August 29, 2009,http://
odili.net/news/source/2009/
aug/29/307.html
). And it is always Muslims on Christians.
He made this remark in the context of the
first ever audience given by the Northern
Governors Forum to Christians in the
north for the decades the Forum has been
in existence. Even at this meeting some
governors dashed out form the venue in
rebellion to the idea of given audience to
Christians. It is in Oyo state that members
of the Muslim community are opposing
the return to their owners of mission
schools forcibly taken over by
government. Their reason for the
opposition is that public fund has been
used to maintain them since they were
taken over. This argument is like saying
that it has cost an armed robber money to
keep his loot and so it should now belong
to him. The hatred and malice behind this
argument is palpable. The statistics given
by Governor Aliyu has not improved
anyway as the killing of innocent
Christians by Muslims has not stopped. In
the past it was the Maitatsina and today
it is Boko Haram from the same Muslim
majority north letting blood and
disturbing the peace of the country. Do I
need to still go on to convince Mr. Kamor
that he is most insincere and perhaps part
of the problems by accusing Nigerian
Christians of hate and intolerance? With
influential people like Mr. Kamor turning
around to accuse Christians for the very
hate and intolerance they are victims of
on a regular basis, a fact even known
internationally, there does not appear to
be the hope that Christian peace and
tolerance will ever get reciprocation from
the Muslim community represented by Mr.
Kamor.
In any case, there is one truth I can vouch
that Mr. Kamor knows; it is that Jesus
Christ preached peace and tolerance and
live by them. Mr. Kamor affirmed this
from the bottom of his heart. May this
peace and tolerance of Jesus Christ be
found in Mr. Kamor's Muslim community.
However, a question that follows is, does
the introduction of Islamic banking by the
CBN that is jointly owned by Nigerians of
all religions and faiths promote the type
of peace and tolerance preached and lived
by Jesus Christ? The answer is a big no.
5. Legal and Constitutional Incongruities
with Sharia banking
The legal consequences of the
introduction of Islamic banking deal yet
another deadly blow to the constitutional
secularity, unity and sovereignty of the
country. Item 6 of the Exclusive Legislative
List of the 1999 Constitution reserves
legislative competence on banks, banking,
bills of exchange and promissory notes to
the competence of the National Assembly,
while section 10 of the same Constitution
prohibits both the federal and state
governments from making any religion the
state religion. The introduction of Islamic
banking, to be run according to Islamic
jurisprudence by the CBN, automatically
means the federal government ceding its
powers, legislative, executive and judicial,
for the regulation of banks and allied
matters to Islamic Mullahs and thus, to
Islam; an act that ipso facto turns Islam a
federal religion. The significance of the
secularity of the Constitution as embodied
in section 10 of the Constitution is that no
aspect of governance, federal or state,
should be run according to the exclusive
dogmas or jurisprudence of any religion.
This is exactly what the federal
government is doing through the CBN and
also by allowing the existence of Sharia
states.
This unconstitutionality still remains even
as the CBN has turned around to
acknowledge that non-interest-banking is
not synonymous with Islamic banking, but
only a variant of it. As long as Islamic
banking, by whatever name it is called, is
operated according to Sharia law or
Islamic jurisprudence, it is in breach of the
secularity of the Constitution as it is to
that extent an imposition of Islam on the
country.
Islamic banking is a lethal attack on the
sovereignty of Nigeria. The sovereignty of
Nigeria which resides in the citizens is
centered in the tripartite government
institutions of the executive, the
legislature and the judiciary. Sharia
banking, in so far as it is not regulated by
these institutions, creates a parallel
government in Nigeria. It creates its own
legislative body to enact the rules that will
regulate it, it enacts its own offences, its
own rules of evidence, trial, and
punishment; it constitutes its own
tribunals and courts and establishes its
own chief executives to implement its
rules and carry out its judicial
pronouncements. All these institutions will
exist independent of the ordinary
governmental institutions established by
the Constitution, thereby creating critical
rule of law issues. If Muslims must have
their Islamic experts to make rules and
regulations for the operation of Islamic
banks, would Muslim legislators at the
National Assembly participate also in
regulating non-Islamic banking or
interest-banking? Doing that would of
course amount to legislative double-
dipping, an obvious injustice and
dictatorship to all non-Muslims as Muslim
legislators would be making regulations
that would not, in principle, bind them.
Since Islamic banking has been presented
to be in opposition to the conventional
interest-banking, there is strong likelihood
of bias on the part of any Muslim
legislator participating in the regulation
of the conventional interest-banking.
Moreover the personnel to run these
Sharia institutions must be Muslims. This
would mean the Federal Government
introducing religious criterion for
employment and access to fund, all in
contravention to section 42 of the
Constitution and the UN conventions it
acceded to or ratified, especially the UN
charter, forbidding such discriminations.
In the end the supremacy of the
Constitution would have been tossed and
displaced. What Sharia banking does then
is to break up the country as it will foist
an Islamic state on the Constitution.
The introduction of Sharia banking for
Muslims creates serious confidence issues
in the administration of the CBN. Can a
Muslim whose faith forbids interest-
banking be at the headship of the CBN?
Or will the CBN be split for Muslims and
non-Muslims. Just as a non-Muslim will
not be accepted by Muslims to head and
regulate Sharia banking, it will be
abnormal to have a Muslim head non-
interest banking for the obvious reason of
conflict of interest and high probability of
bias.
A corollary to this is the security risk the
operation of Islamic banking poses to
Nigeria. As Islamic banking creates a
government outside of the federal
government, it creates its own
international relations and liaisons
independent of the ordinary institutions
of the government. Islamic banking is a
child of the OIC and article 34(1) of the
new (2008) charter of the OIC provides
that "The Organization shall enjoy in the
Member States, immunities and privileges
as necessary for the exercise of its
functions and fulfillment of its objectives".
Nigerian being a member of this
organization, the operations of Sharia
banks via the OIC is immune from security
checks. The sources of Sharia banking
funds and its ultimate destination in the
country will not in principle pass through
the President, and especially if the
president is non-Muslim.
6. On the merit of Islamic banking
It may not need a professor of banking to
see that the logic that zero-interest-
banking will alleviate poverty is suspect.
The common sense caution, 'when the
offer is too good to be true, beware' is
very relevant here. Countries claiming
great impact of Shariah banking on
development are Egypt, Senegal, Malaysia
and Turkey. Some observers and analyst
of the system like Aaron MacLean wrote:
"Islamic financial institutions, the
argument went, would boost the economic
development of Muslim societies. The
fraternal style of Islamic banking-with its
emphasis on equity financing rather than
lending-would enhance social
responsibility. In practice, however,
Islamic finance has had to bend to the
same pressures as any other kind of
finance. Social, religiously oriented
investment in the development of the
Islamic world is something people are
more interested in publicly championing
than personally doing (Aaron MacLean,
"Islamic Banking: Is It Really Kosher?",
The American, The Journal of the
American Enterprise Institute, Online,
http://www.american.com/archive/2007/
march-april-magazine-contents/islamic-
banking-is-it-really-kosher
). Khalid Ikram, who represented the
World Bank in Egypt where the first
modern experiment (1963-67) with
Islamic banking was undertaken (http://
www.usc.edu/dept/MSA/economics/
islamic_banking.html
), said of Islamic banking, "it hasn't had a
lot to do with development" (Aaron
MacLean, op. cit.). For Christopher Watts,
lack of transparency in the system is an
issue of concern. It is a theocratic system
where the precise guidelines or principles
are not open to logic but are determined
by people whose interests are only
theocratic orthodoxy. This leads to the big
problem he found in the system, which is
the fact that the precise guideline or
operational principles depends on one's
Shariah jurisprudential school. Various
Islamic schools have their own banking
rules (Christopher Watts, 'Is Islamic
finance at tipping point?'http://
www.economist.com/sponsor/qfc/
index.cfm?pageid=article104
.)
7. Conclusion
Sanusi has shown that he is rather an
Islamist politician rather than a financial
expert with the cooperate welfare of
every Nigerian at heart. It is better he is
shown the way out having lost the
confidence of the secular sector of the
economy, particularly for the conflict of
interest in him heading the interest-
banking that he has declared his religion
abhors. And it is time legal steps are
taken to challenge the constitutionality of
his actions, the BOFIA and the complicity
of the federal government in this effort at
islamizing the country. To be also
challenged are the constitutionality of
Nigeria's membership of the OIC, the
Sharia states in the north and Nigeria's
membership of the Islamic Development
Bank (IDB). The most unfortunate thing is
that the non-Muslim community of Nigeria
has had the tradition of talking more than
taking concrete steps towards redressing
the gradual islamization of the country.
Prominent among those who suffer the
most and will still suffer more the
islamization of Nigeria are Christians.
Therefore, the leadership of Christians,
the CAN (Christian Association of Nigeria)
, becomes a principal stakeholder on this
matter and should be all out with serious
plans to challenge this gradually but
steady assemblage of both the legal and
economic weapons that will be used more
dreadfully on her and her citizens-
members like in the Middle East and
North Africa. Efforts should go far
beyond the usual communiqué-responses
in the past. In actual fact, from the
perspective of Christians being the largest
in the non-islamist sector of the country,
they are, as a body, responsible for the
islamization of the country by their
inaction and many a time naïve
concessions and preachment for peace on
related matters with scarcely any
attention on justice. Real peace must be
based on justice.

Can it be true, i doubt

With those excerpts from Mr Kats, now we can understand further how irrational it will be for Mr Sanusi to keep emphasizing on Islamic banking model like it is bereft of any problem when in fact, it comes with its own very many problems.
Little wonder there is hardly any success story to tell about the model, even Iran and Pakistan, countries with the highest numbers of Islamic banks are struggling to follow the sharia principles of finance to its letter. Yet our bigoted CBN governor is busy telling everyone that cares to listen that it's the best thing since his catastrophic reforms.
They only mouth off about non-interest lending but go silent on the stipulated bureaucratic bottlenecks for obtaining these so-called non-interest loans.
They argue that the bank will avail many northerners and muslims who find it hard to reconcile their religious beliefs on profit and loss, the opportunity to be account owners and enjoy products that will help their small businesses. However, with the revelation that one has to be an investment account holder with the bank and make available the true profit made, one wonders where these peasant farmers that make up the population for their target market will get all these prerequisites.
Then you have to consider the compatibility of the existing financial laws with the one that set up the sharia model.
I keep asking these question, does Sanusi consult widely before going out to make announcements? Or does he intend to single-handedly change existing laws just to accommodate Islamic banking. Of course if a civil case arises, judgements and assessments will be based on existing laws and regulations that guide finance in Nigeria.

azoo:
I may not know anything in economkcs but a first class graduate of biochemistry sure should know something about many thingss,
couple of months back while Iwas in osun state, I was watching a program on NTA osogbo about some enterprenuers and how their businesses suffer cos of debt servicing,  the least lending band lends at an interest rate of about 14% and for them to stay in business they cant pay all their debts at at time but still have to increase commodities' prices. Then Sanusi came with bank of industries that lend money to these Guys at 7% interest rate,  you can imagine how these peeps were happy and praising CBN for establishing BOI, they said they can pay debt a lot easily and an even reduce the prices of their produce and make more profit,  thats just reducing interest by 50%,  now imagine what would happen if you can borrow from a bank that will lend to you at 0% interest rate,  even YOU will enjoy from it cos you'll uy a lot cheaper than now,, hence Economic stability is imminent, 

your first class in biochemistry and your lack of analytical depth only expose the problems of our education system. You need to take your time to understand issues first before rushing to brag about a mediocre certification from a probably mediocre University.
It is very important for people to understand that the Islamic banking model is a subset of NON-Interest banking. The issue here is not with the product but the motive. Why emphasize on Islamic banking instead of non-interest banking? Why should the CBN governor be promoting Islamic banking, holding Islamic conferences to promote the cause at the expense of other forms of non-interest banking? When Soludo gave licence in principle to JAIZ bank, an Islamic bank that never took off, he did not make any exclusive guidelines alone for Islamic banking like Sanusi is doing. Unlike Sanusi, Soludo issued the licencing to Jaiz giving thesame guidelines for all Non-Interest banking models. Why spend state resources organizing conferences and hiring experts on Islamic banking, exclusively to Islamic banking model when that should be in the purview of private practioners of any of the models if they want to sharpen their competetive edge.
Does it not smack of an agenda to bring in islamasize the financial system given the utmost importance that the CBN management has put on just one model in the presence of many? When was the last time you checked the Naira notes for any of  Yoruba-Hausa-Igbo inscriptions? It has reverted to arabics since Sanusi.
In terms of economic benefits of islamic banking, can you without mincing words state clearly any economy that has succeded due to the presence of Islamic banks and the strict adherance to its principles. In real sense, there is realy no difference between their non-interests claims and the mark-up charges they levy on loans except that they put themselves more at risk than conventional banks will want to do. Seriously, what are their success stories? It is all good to talk about lending without interest charges but what happens when the business fails? Do you know that the bank almost entirely bear the brunt of the failure and put people's deposits with them in jeopardy. Mr first Class grad, I am not an economics either, neither did I graduate with a first class but I don't think it takes a super-brain to figure out the obvious with Sanusi- he is way over his head and is confused as to how to handle the job, he is just gropping in the dark and I personally think he has been infilterated by islamist fundamentalist.

This is the aspect of this discussion that interests me the most- the performance and soundness of his policies as it relates to his alleged intelligence according to his praise singers.
  Without overflogging the issues of past policy inconsistencies so as not to derail the progression of the topic, I want to talk more on SLS latest past time obsession that is causing ripples all over the country's financial sector.
Personally, I do not have problems with Islamic banking or non-interest banking-whatever cloak they choose to wear it for convenience. After all, the issue of setting up Islamic banks in Nigeria pre-dates Sanusi. The circular requiring anyone interested in setting up an Islamic Bank was first issued in March 2009, by the present deputy governor, Tunde Lemo, a reverend; and the  then[CBN] governor, Professor Charles Chukwuma Soludo.
However, the CBN under Governor Sanusi Lamido Sanusi has done more than anyone else to turn the concept of ‘Islamic banking’ into an Islamist political project.
Trouble started with the unnecessary linguistic gymnastics and intellectual obfuscation engaged in by CBN management. By splitting hairs over whether Islamic banking and Sharia banking are different from or part of non- interest banking, CBN inadvertently made their motive the issue, rather than focusing on the product. Calling on those who are interested in other forms of non- interest banking to come forward for licence when the CBN itself has no idea what these other forms are does not appear to be smart political communication.
SLS has skillfully, but disingenuously applied indirect rule strategy to try to put out the mid-day fire he set on the savannah and to absolve him self of Islamist demagoguery. People are more worried by the motives than what the product aims to achieve because the CBN should never be in the business of promoting a religiously based financial system as opposed to the conventional ones and other religions. Especially, when there is no serious evidence of its benefits in countries where it is being practised besides the fact that it avails muslims-that have problems reconciling their religious beliefs with the principles and dictates of conventional banking- the opportunity to use the services of a bank. This brings us to the divide and conquer arguments that have been posited by Nigerians that are opposed to it. In a country like Nigeria grotesquely divided between a muslim North and a Christian south-with ethnicity and regionalism being pre-requisite determinant factors in getting public positions, appointments, elective offices and ultimately control of sectors in the economy- it is imperative that people's sensibilities are taken into considerations when reeling out potentially devisive policies that will affect not just muslims but every Nigerian.
This brings me to my next question which I shall explore in my next post; what is the level of preparedness by the CBN management to educate people on what Islamic banking is all about, what it entails, who and who will constitute the decision making process-is it an exclusive of just muslims? How many Nigerian bankers are trained in Islamic banking and their products, what are the benefits to our economy, what about protecting people's deposits in these non-interest banks.
   The operations of Islamic banks are on a profit and loss share basis (PLS), which actually do not come fully under the jurisdiction of the existing civil laws. If there are disputes to be handled, civil courts are not sufficiently acquainted with the rationale of the operations of Islamic Banking.
Do we have legilations that ensure people will get justice in the events of any civil disputes that arises ? Nobody has even discussed the problems faced by these banks as a result of the limiting rationale behind the concept of Islamic banking.

I remember 2yrs ago when Sanusi came on board with his mafian styled leadership of the CBN, my worries then were that this man was eroding the very lifeline of bank business with his hasty decisiond & as the spirit leads policies he was churning out.
I give it to him, he was fearless, probably good intentioned and realy wanted to help but there were some very obvious pointers to the fact that the young man was darting in unknown waters. From his sweeping actions of sacking the managements of banks he alleged were cooking their books without given them any chance to defend themselves, to reeling out hasty policies and talking down on our banks in different public fora both home and abroad, all these showed he lacked the finesse, tact and temperament of the office he occupies. In his effort to correct the flaws in the financial sector he unwittingly brought down the whole sector to a screeching halt.
Any banker or financial expert that is worth his salt knows that bank business thrives on trust and confidence and the moment anyone in his present capacity starts mouthing off about how dubious and criminally minded bankers and the system are, instantly, people will start fretting and taking their monies elsewhere. That was exactly the case in our scenerio, Sanusi got dazed by the limelight and played too much to the gallery.
Now the news making the rounds is yet another policy twist from our very controversial and extremely erratic CBN governor who has given a deadline to the 8 rescued banks to recapitalize before october 30 or face liquidation.
Now the question that any sane person that has been following this man's trial and error policies are these:
1. Did Sanusi not promise us that no bank will be allowed to fail or go under?
2.What was the essense of the whole hullabaloo about saving the banks initially and stabilizing the economy if it will eventually come to this?
3. Does this man listen to his voice at all? Or does his own voice confuse him as well?
He is so full of discordant tones and inconsistencies. Why make us go through all that suffering, more than 30,000 people have already lost their jobs, 620billion naira injected into these banks and our economy stagnated. Is he confused or what? Or he can't wait to see through his policies to the end? I understand he constituted the managements of these rescued banks, so has he lost confidence in them? Or was it a case of the whole plan being programmed to end like this? Why is he in a hurry to sell these banks to foriegners?
He acts like shareholders of these banks do not have any right as to how the merger and aquisition should go, he wants to damn the shareholders and liquidate their banks like that? Does he even have any shares in any of these banks to understand the import of his thoughtless pronouncements.
Thesame way he eroded confidence in the banking sector when his madness first started, he is going to repeat it again the 2nd time. Imagine the adverse effects liquidating 8 banks will have on even the so-called healthy banks. Which investor with a sane mind will want to touch our banks with a 500m pole with a confused CBN governor and grossly incompetent head like sanusi. It is high time Mr Lamido Sanusi threw in the towel and admit this job is way above his league to start with.
I realy do not see any iota of brillance let alone genius in his way of doing things, he is just dramatic and unfortunately, people like drama, the man lacks the depth and expertise that is befitting of a CBN governor. No doubt, he means well but he just does not have the stuff to move us forward hence his resort to non-issues.
I still dey ask what benefits will islamic banking have on our seriously ailing economy? That $hit will die a natural death in Naija as soon as it kicks off, I am certain of that. They are no competition to any conventional bank.th home and abroad, all these showed he lacked the finesse, tact and temperament of the office he occupies. In his effort to correct the flaws in the financial sector he unwittingly brought down the whole sector to a screeching halt.
Any banker or financial expert that is worth his salt knows that bank business thrives on trust and confidence and the moment anyone in his present capacity starts mouthing off about how dubious and criminally minded bankers and the system are, instantly, people will start fretting and taking their monies elsewhere. That was exactly the case in our scenerio, Sanusi got dazed by the limelight and played too much to the gallery.
Now the news making the rounds is yet another policy twist from our very controversial and extremely erratic CBN governor who has given a deadline to the 8 rescued banks to recapitalize before october 30 or face liquidation.
Now the question that any sane person that has been following this man's trial and error policies are these:
1. Did Sanusi not promise us that no bank will be allowed to fail or go under?
2.What was the essense of the whole hullabaloo about saving the banks initially and stabilizing the economy if it will eventually come to this?
3. Does this man listen to his voice at all? Or does his own voice confuse him as well?
He is so full of discordant tones and inconsistencies. Why make us go through all that suffering, more than 30,000 people have already lost their jobs, 620billion naira injected into these banks and our economy stagnated. Is he confused or what? Or he can't wait to see through his policies to the end? I understand he constituted the managements of these rescued banks, so has he lost confidence in them? Or was it a case of the whole plan being programmed to end like this? Why is he in a hurry to sell these banks to foriegners?
He acts like shareholders of these banks do not have any right as to how the merger and aquisition should go, he wants to damn the shareholders and liquidate their banks like that? Does he even have any shares in any of these banks to understand the import of his thoughtless pronouncements.
Thesame way he eroded confidence in the banking sector when his madness first started, he is going to repeat it again the 2nd time. Imagine the adverse effects liquidating 8 banks will have on even the so-called healthy banks. Which investor with a sane mind will want to touch our banks with a 500m pole with a confused CBN governor and grossly incompetent head like sanusi. It is high time Mr Lamido Sanusi threw in the towel and admit this job is way above his league to start with.
I realy do not see any iota of brillance let alone genius in his way of doing things, he is just dramatic and unfortunately, people like drama, the man lacks the depth and expertise that is befitting of a CBN governor. No doubt, he means well but he just does not have the stuff to move us forward hence his resort to non-issues.
I still dey ask what benefits will islamic banking have on our seriously ailing economy? That $hit will die a natural death in Naija as soon as it kicks off, I am certain of that. They are no competition to any conventional bank.

I am a graduate of that school, I understand the frustrations of the students. Living conditions of students staying on campus is appalling. I remember when I first started out, I went into one of the male hostels, Hostel A. The heavy stench of urine and human faeces that greeted me was overwhelming. I made sure I spent my entire 5yrs off campus between Umuelem, Umuchima and Ihagwa, where actually there is a sense of balance between social life and academics. The SUG is just a rubber stamp, their aim there is just money and indulge in stupid local politics that does benefit the student.
As for cows having lectures with students that is a big lie, prolly an exaggeration, they have never posed any threat before to any student or their learning cobditions, they don't make any disturbing noise either. People sholud learn to address issues with perspective and stop being ridiculous.
Anyway, every Nigerian Universities suffers thesame headaches, just different degrees though.

[quote author=ndu_chucks link=topic=707449.msg8668781#msg8668781 date=1310034184]Would someone be kind enough to explain what Ngozi means by the statement above? How can people who obtain loans from the bank share in the bank's profits? Why should a person obtain a no-interest loan, use the money for his own benefit and then turn arround and share in the bank's profit?

I heard her make the statement on TV. My question is, was madam on Ogogoro when she made that statement?[/quote]My guy don't even act like you know any better thab the woman, the whole concept of Islamic banking is based on the sharing of both profits abd loss, what she said was exactly what it is. Don't start that cynical bullshittung like the woman just said some munbo-jumbo and nobody in the senate noticed. In Islamic banking there is no such thing as charging interest on money loaned, instead the lender( the bank) goes into a sort of partnership with the person that wants to get the loan. Depending on the agreement reached on how profits made from the partnership, the bank provides the capital for the business venture while the owner goes ahead with the running of the business. This way both profits and risk are shared unlike conventional banking that puts the whole risk on the borrower should the business fail.
So what is it you don't understand that Ngozi said?

Ngozi is exactly what we need now not that confused Aganga

I don't know about others but if you studied engineering in school and after graduation you are going to look for job, be sure to lay emphasis on aquired skills and industrial work experience,especially during your industrial training program.
Your employers are more interested in your ability to do or understand the job or even withstand the pressure of the job than a 2.1 or 2.2.
Reminds me of my 1st degree days, I studied Mech Eng and due to my taste for practical knowledge, I never could understand the relevance of the needless impracticable courses we kept doing. At a point, I started skipping classes but was reading mech Eng books way beyond the limits of the outdated courses, it kind of affected my grades as I found it hard to reconcile the units and methods used by lecturers who were using outdated indian text books as against the standard American and British textbooks obsessed myself with. I would explain certain aspects of some theories in thermodynamics during lectures and my lecturer will be dumbfounded and in arrogance dismiss it as not in the purview of our course outline.
I got frustrated with the system and started my own solo university education and concentrated on getting practical experience to match the theories and stuff.
I remember when I had to do my I.T, while my friends where busy doing their I.T programs in banks and telecom companies, I chose to do it in production factories and damn that was where I learnt the importance of industrial experience. I did 3months in a plastic production company then another six months in a biscuit company.
Needless to say the repercussion was a 2.2 result, even my pals could not believe it, my folks where little disappointed but still showed understanding cos they knew I was more intelligent than the suggestion of my results.
I was not even disturbed cos I know I will eat up any 2.1 or even 1st class when it comes to mech engineering especially if it has to do with industrial production engineering which was my major.
When I prepared my CV, those were the highlights of my CV, I emphasised on my industrial experience, gave details of my responsibilties during my I.T programs as a trainee in those production factories, my accomplishments and skills aquired. I remember then my first job interview while I was still waiting for NYSC posting, the personnel manager of the company I worked for went through my CV, saw how detailed I wrote about my experiences during my I.T, my emphasis on skills I aquired, I automatically got the job. I even told the PM that I intend to do my NYSC primary assignment with them, he gladly agreed even without having seen copies of my certificate and other credentials or even the grade, he was more interested that I had the needed pre-requisite skill and experience to man their machines or understand them in a space of few months. I was instantly placed in the maintenance dept and given the full benefits of gradute entrants in the engineering firm.
Another very important thing to note when preparing your CV, instead of putting second class lower for those of us with 2.2 and below, you are better of putting second class honours. That gives you the chance to be considered for an interview, the moment you state clearly your grade, you leave yourself open for discrimination by prospective employers. I no dey try dat kind mistake o. . .lol

Araboy:
@ezeuche Since when Nigeria is a secular nation ? Nigeria is one of the most religious and superstitious  nation on earth
I think since Muslims are under represented on NL you guys think people would care about your non sense
I think Christians in Nigeria are abusing their  power to infiltrate the federal government institutions public media schools hospitals employing them corruptly as means of evangelization they conduct religious services walk their "miracle" on state radio Religion in Nigeria get more time than health science and technology
Christians imposed their religious holidays on an entire nation the church should impose her holidays on its own members not on entire nation so you guys behave as you please as if Nigeria belong only to you I think Nigerian Muslims need to be more aggressive in defending their rights and flaunting your Christianity on all nation will only bring to you more backlash and radicalization

who is the ediooooot with internet access? Do you have to write like you are reeeetarded to make a dumb point. in defending their rights and flaunting your Christianity on all nation will only bring to you more backlash and radicalization  
[quote][/quote]who is the ediooooot with internet access? Do you have to write like you are reeeetarded to make a dumb point.

maclatunji:
@Rhymz, your very detailed analysis of the economy prior to Sanusi shows that I am right in linking the situation in our banks to the entire economy. I know that what miffed Sanusi was that in spite of all the challenges that you have so eloquently detailed (although your write-ups would be better if you used more paragraphs and stopped being so angry), the bank boards were still cooking the books and stealing billions. He decided that for the purpose of sanity these guys had to go and as we see they are being prosecuted by the EFCC (note that Sanusi is not in charge of this agency).

Now, we know we have major problems but at least we are reasonably sure that those that are in charge of those banks are not stealing with impunity (although it seems they can never totally stop stealing).

From your analysis I can say you are one of the "big boys" who took big risks and have been affected by some of his policies. Relax, engage the system (don't fight it), I am sure better days will come.

Sorry about the clumsiness of my write-up jare, my lappy is acting up so I use my phone. I will try to be as coherent and clear as possible with my write-up so you won't have to feel giddy. .lol
Now to the main issue, remember the circumdtances that preceeded Sanusi's emergence as CBN governor, he was prolly under a lot of pressure to prove his critics wrong. Sanusi's actions from the on-set were seriously flawed that's why he felt the need all the time to explain himself and in the process eroded the confidence people had in our banks. Imagine a CBN governor going to public fora abroad and explaining in details to a bewilderd audience how messy our financial system was? Was that for him to say? Seriously, no matter what anyone says about Soludo, I still prefer him to a thousand Sanusi. He understand the idiosyncracies of his office very well, had more progressive ideas, I qm sure he would have corrected a lot of anomalies if he had been given a 2nd term but quota system and Northern elites that felt strangled by his policies made sure he did not come back.
The next thing was to use Sanusi to politicize the problems in the sector just to make Soludo look like a fraud, they almost succeeded but with the benefits of time and hindsight people are begining to ask question they did not want to ask when they were high on Sanusi's charm and superstar show off. Let us face it, all the banks were doing thesame double-dealings and all manner of unethical practices to get the jumbo profits and ratings they were getting. Sanusi would have been better off following due process to nip it in the bud without all the uneccessary poster boy fanfare he started with.
Now he is tumbling one policy after another on their head, issuing threats and unrealistic deadlines without recourse to the owners-the shareholders of the banks. He is more interested in having things his way than face the facts that his policies are choking and need some orientation and direction, even AMCON was not his brain child, it was Soludo's. Soludo showed more understanding in his handling of the economy than our larger than life Sanusi who is just jumping from pillar to post. Now he wants to foist islanic banking on us and like he did before, he has not shown us any blueprint of how these non-interest banks will function, how they tend to add value to our economy or even the modalities for the licensing of such institutions. I hope they don't create a system that will be hijacked by terrorist group to fund terrorism in this country in the name of islam. ge of those banks are not stealing with impunity (although it seems they can never totally stop stealing).

From your analysis I can say you are one of the "big boys" who took big risks and have been affected by some of his policies. Relax, engage the system (don't fight it), I am sure better days will come.
[quote][/quote]Sorry about the clumsiness of my write-up jare, my lappy is acting up so I use my phone. I will try to be as coherent and clear as possible with my write-up so you won't have to feel giddy. .lol
Now to the main issue, remember the circumdtances that preceeded Sanusi's emergence as CBN governor, he was prolly under a lot of pressure to prove his critics wrong. Sanusi's actions from the on-set were seriously flawed that's why he felt the need all the time to explain himself and in the process eroded the confidence people had in our banks. Imagine a CBN governor going to public fora abroad and explaining in details to a bewilderd audience how messy our financial system was? Was that for him to say? Seriously, no matter what anyone says about Soludo, I still prefer him to a thousand Sanusi. He understand the idiosyncracies of his office very well, had more progressive ideas, I qm sure he would have corrected a lot of anomalies if he had been given a 2nd term but quota system and Northern elites that felt strangled by his policies made sure he did not come back.
The next thing was to use Sanusi to politicize the problems in the sector just to make Soludo look like a fraud, they almost succeeded but with the benefits of time and hindsight people are begining to ask question they did not want to ask when they were high on Sanusi's charm and superstar show off. Let us face it, all the banks were doing thesame double-dealings and all manner of unethical practices to get the jumbo profits and ratings they were getting. Sanusi would have been better off following due process to nip it in the bud without all the uneccessary poster boy fanfare he started with.
Now he is tumbling one policy after another on their head, issuing threats and unrealistic deadlines without recourse to the owners-the shareholders of the banks. He is more interested in having things his way than face the facts that his policies are choking and need some orientation and direction, even AMCON was not his brain child, it was Soludo's. Soludo showed more understanding in his handling of the economy than our larger than life Sanusi who is just jumping from pillar to post. Now he wants to foist islanic banking on us and like he did before, he has not shown us any blueprint of how these non-interest banks will function, how they tend to add value to our economy or even the modalities for the licensing of such institutions. I hope they don't create a system that will be hijacked by terrorist group to fund terrorism in this country in the name of islam.

Genius
Obviously, you are one of those that are high on Sanusi's sensationalism and policization of the financial problem. It is clear you were not following anything in the sector until superstar Sanusi started acting up and making the whole thing about himself.
For your information, our financial crisis started when the NSE crashed, I mean colapsed to the extent they had to virtually stop transactions. The cause was because institutional investors were divesting their monies from our capital market to solve their financial problems at home- US and UK. Many of them were getting "marging calls or request" from their banks and brokers as the their share values had gone down below the minimum margin requirements offered by their lenders-banks and so on.
This divestment from our capital market caused a panic and our banks who also had given margin loans to a lot of its clients started calling their clients to make more payment to shore up their minimum marging requirements on the margin loans extended to them or lose their shares. The effect of that was people selling of their shares and share values crashing down in a twinkle of an eyes. However, becaus the banking sector dominated the capital market, they took the fall and banks who had given too much margin loans to both clients and staff were worst hit.
There were also huge cases of default on payments, non-serviced loans and loans that eventually went bad as a result.
The aforementioned cases still was as a result of the economic crunch that had hit the world at that time, people defaulted on payment not because they chose to but but because they clearly could not keep up with the payment giving the economic realities. The issue of collatera was not even given any full attention before Sanusi went on to sack the managements of those banks.
The simple question which many people asked when Sanusi first started and is now haunting his administration are as follows:
• Why hurry to wield the axe, when the audit has not been conducted in all Nigerian banks to enable Sanusi gain a comprehensive picture of the situation in the industry? The weakest bank in Nigeria, Unity Bank, had not even been audited at the time. Soludo's CBN granted N70 billion to Unity the previous year before Sanusi's without sacking its CEO or management.
• The debtors' list proved to be sheer propaganda as the loans were mostly actually performing.
• Why did Sanusi not publish debts owed by government ministries, agencies and parastatals? They are actually the biggest and most notorious debtors - either directly or through contractors who handle public project. For example, Transcorp was owing Union Bank N41 billion, but the government was yet to refund the purchase price of NITEL to the company after the Federal Government reversed the privatisation of the telecom company that year. Another important group of bank debtors are the importers of petroleum products. They say the government was owing them nearly N100 billion in subsidy reimbursement. So, this means that if the government that wants to rescue the banks had fulfilled its responsibility to those it was owing, the problems of the banks would have been much lighter.
• Why did Sanusi not invite the boards of the audited banks to show them the results of the so-called audit and let them show how they think they could solve the identified problems; for example, giving them a deadline to recapitalise? The practice all over the world is to first demand that the existing shareholders meet the capital adequacy requirement. It is only where they are not able to raise the required capital that forced intervention by the regulators takes place.
Your darlin Sanusi goofed big time and he now realizes that, hence his resort to threats and force. If he had faced issues clearly from the standpoint of the causative issues he would have gotten a better understanding and probably respond well but his mafian style did not help and to thibk of it, he never had any serious blueprint for his reforms and that is why a lot of us still maintains that he is out of his league with that job.given margin loans to a lot of its clients started calling their clients to make more payment to shore up their minimum marging requirements on the margin loans extended to them or lose their shares. The effect of that was people selling of their shares and share values crashing down in a twinkle of an eyes. However, becaus the banking sector dominated the capital market, they took the fall and banks who had given too much margin loans to both clients and staff were worst hit.
There were also huge cases of default on payments, non-serviced loans and loans that eventually went bad as a result.
The aforementioned cases still was as a result of the economic crunch that had hit the world at that time, people defaulted on payment not because they chose to but but because they clearly could not keep up with the payment giving the economic realities. The issue of collatera was not even given any full attention before Sanusi went on to sack the managements of those banks.
The simple question which many people asked when Sanusi first started and is now haunting his administration are as follows:
• Why hurry to wield the axe, when the audit has not been conducted in all Nigerian banks to enable Sanusi gain a comprehensive picture of the situation in the industry? The weakest bank in Nigeria, Unity Bank, had not even been audited at the time. Soludo's CBN granted N70 billion to Unity the previous year before Sanusi's without sacking its CEO or management.
• The debtors' list proved to be sheer propaganda as the loans were mostly actually performing.
• Why did Sanusi not publish debts owed by government ministries, agencies and parastatals? They are actually the biggest and most notorious debtors - either directly or through contractors who handle public project. For example, Transcorp was owing Union Bank N41 billion, but the government was yet to refund the purchase price of NITEL to the company after the Federal Government reversed the privatisation of the telecom company that year. Another important group of bank debtors are the importers of petroleum products. They say the government was owing them nearly N100 billion in subsidy reimbursement. So, this means that if the government that wants to rescue the banks had fulfilled its responsibility to those it was owing, the problems of the banks would have been much lighter.
• Why did Sanusi not invite the boards of the audited banks to show them the results of the so-called audit and let them show how they think they could solve the identified problems; for example, giving them a deadline to recapitalise? The practice all over the world is to first demand that the existing shareholders meet the capital adequacy requirement. It is only where they are not able to raise the required capital that forced intervention by the regulators takes place.
Your darlin Sanusi goofed big time and he now realizes that, hence his resort to threats and force. If he had faced issues clearly from the standpoint of the causative issues he would have gotten a better understanding and probably respond well but his mafian style did not help and to thibk of it, he never had any serious blueprint for his reforms and that is why a lot of us still maintains that he is out of his league with that job.

Maclatunji
I don't realy think you understand the import of your own argument when you say Sanusi should be left to carry out his planned liquidation of eight banks.
Unless you fail to understand the genesis of the problems, you will never see the catastrophy that is about to be unleashed if that happens.
My question to you, is this, can you honestly argue that Sanusi's handling of the problem was the best way it could have been addressed? Are you saying it could not have been handled any better than this?
Let's face facts and leave sensationalism for now, you and I know that most part of our financial crisis was rooted in the world financial crisis that hit virtually every economy. Nigeria was no different and without denying the fact that there were unethical practices amongst bank CEOs but that was just a part of the problem. However, Sanusi highlighted that alone like that was the single cause of the problem, sensationalize issues and gave an already apprehensive public information that they did not need to know, only to erode the confidence of not just the so-called distressed banks but every Nigerian bank. Now our banks are mere deposit houses.His hasty and incorrect publishing of the names of people who were indebted to these banks only showed he was playing to the gallery and criminalizing what in financial parlance was a normal business practise. He made it seem like default on payment was a punishable offence or it was wrong for banks to have bad loans, after all, there is usually accommadation in their profit and loss balancing for such occurences. Sanusi was busy sensationalizing the whole problem and causing more havoc. Did he think he was going to be successful with making hasty policies based on his guts feelings and the tenets of his religious beliefs and morals.
Now most of those banks whose managements he single-handedly pushed out and replaced their managements are all subjects of serious litigations, who in their right senses will want to invest or buy such banks when you know court rulings could go against you after you may have invested your monies in them? Or did you think the shareholders will go down without a fight?
If he is actually confident of his reforms, why the haste to see them sold or liquidated even after promising Nigerians that no bank will be allowed to fail.
You argue that if Sanusi had not stepped in the banks would have gone under and the economy would have been thrown into some serious relapse, so what about now? Don't you think the situation is even worse now? Will thesame thing not happen if he goes ahead to liquidate those banks, do you know the multiplier effect of doing such a thing?
I ask again why did he not allow them to fail if either way they were beyond redemption like he seem to believe? Why waste tax payers money to save them only to have a re-think and do a 360 degree half-way?
Lets face it, his reforms have been retrogressive and causing more havoc. Inflation has not gone down rather it is on the increase, people have lost more jobs than would have happened if the situation was handled with professional tact. Borrowing money from the banks is almost an imposible task hence the setting up of all these industry whatever funds here and there whose flow are not as flexible and continuos like credit lines from banks. Banks have not stopped incurring bad loans as is seen from the banks that sold their bad loans to AMCON.
So what is the favour he has done for us that you keep saying, seriously, I find it annoying when people say they should liquidate them if they dont capitalize just because you have not been a victim to such policies does not meab you should sit in the comfort of your room and make such a dumb and callous statement.
And please, understand the origins of the financial crisis in Greece before making out of no where comparisons. The country was spending more than they could afford to the extent of incurring debts that were way higher than the country's economy. It had little to do with their banks' managements, it was more about their government's laxed fiscal policies and the resultant economic crisis tsunami that hit the world.
I repeat again, Sanusi is way above his head with this job as a CBN governor, he is grossly incompetent for the office. His only strength is his ability to articulate his ideas in a charismatic way that makes one overlook the usefulness of the idea itself and not the man. So far his ideas are clearly out of sync with the realities of our expectations. He is clearly not performing on his job as CBN governor but doing well in showing how good intentioned he is. I am not interested in what he believes in or his model of a good financial system if it is going to make people lose their jobs, cause more economic hardship, further harm the banks, waste public funds and yet not show any iota of progress besides stooopid rhetorics of what could have happened if he had not stepped in and go mafioso on those CEOs.

ebere1712:
Nigerians I hail una. It is only in this country that a man can cause a whooping 30+ thousand people to loose their lively hood, pump 4+ billion dollars as rescue package and has nothing tangible to show for it but "cleaner banks" to sure for it; and still have alot of people rooting for him. Men I'm tired of this country.

Bros did U say cleaner banks? Of what use are "cleaned banks" if they can lend money to the borrowing public and stimulate the economy? What we have today are banks that are too scared to lend money to the public for the fear of sanusi and gangs not criminalizing it. Sanusi came out and made it look like it is an impossibilty for a bank to have bad loans or a punishable offence for a bank to lend money to the public. The funny thing is that all the banks were doing thesame thing but Sanusi in his hurry and one-mindedness decided to make scape goats out of a handful to prove some stupid ego-boosting tough guy stance without thinking of the repercussion of his actions. These days his past time job is jumping from one baseless strangling policy to another, policies that are so anti-people that at times you just wonder what his aims are. From scrappling Universal banking,forcing people to have a unified account, placing limits on withdrawable amount per day to the recent devisive Islamic banking-what exactly have all these policies done to improve financial stability, strong banking system and a better economy. If GEJ keeps mum and allow Sanusi liquidate those banks, I will just lose faith in him totally and assume whatever negetives people say about him as through because it seems to me he is more interested in appealing his elitist friends than understand what is going on in the economy. Somebody needs to stop that man before he destroys us all.that all the banks were doing thesame thing but Sanusi in his hurry and one-mindedness decided to make scape goats out of a handful to prove some stupid ego-boosting tough guy stance without thinking of the repercussion of his actions. These days his past time job is jumping from one baseless strangling policy to another, policies that are so anti-people that at times you just wonder what his aims are. From scrappling Universal banking,forcing people to have a unified account, placing limits on withdrawable amount per day to the recent devisive Islamic banking-what exactly have all these policies done to improve financial stability, strong banking system and a better economy. If GEJ keeps mum and allow Sanusi liquidate those banks, I will just lose faith in him totally and assume whatever negetives people say about him as through because it seems to me he is more interested in appealing his elitist friends than understand what is going on in the economy. Somebody needs to stop that man before he destroys us all.

I remember 2yrs ago when Sanusi came on board with his mafian styled leadership of the CBN, my worries then were that this man was eroding the very lifeline of bank business with his hasty decisiond & as the spirit leads policies he was churning out.
I give it to him, he was fearless, probably good intentioned and realy wanted to help but there were some very obvious pointers to the fact that the young man was darting in unknown waters. From his sweeping actions of sacking the managements of banks he alleged were cooking their books without given them any chance to defend themselves to reeling out hasty policies and talking down on our banks in different public forums both home and abroad, all these showed he lacked the finesse, tact and temperament of the office he occupies. In his effort to correct the flaws in the financial sector he inwittingly brought down the whole sector to a screeching halt.
Any banker or financial expert that is worth his salt knows that bank business thrives on trust and confidence and the moment anyone in his present capacity starts mouthing off about how dubious and criminally minded bankers and the system is, instantly people will start fretting and taking their monies elsewhere.
Now the news making the rounds is yet another policy twist from our very controversial abd extremely erratic CBN governor who has given a deadline to the 8 rescued banks to recapitalize before october 30 or face liquidation.
Now the question that any sane person that has been following this man's trial and error policies is this: did Sanusi not promise us that no bank will be allowed to fail or go under? What was the essense of the whole hullabaloo a about saving the banks initially if it will eventually come to this? Does this man listen to his voice at all? Or does his own voice confuse him as well? He is so full of discordant tones and inconsistencies. Why make us go through all that suffering, more than 30,000 people have already lost their jobs, 620billion naira injected into these banks and our economy stagnated. Is he confused or what? Or he can't wait to see through his policies to the end? I understand he constituted the managements of these rescued banks, so has he lost confidence in them? Or was it a case of the whole plan being programmed to end like this? Why is he in a hurry to sell these banks to foriegners.
He acts like shareholders of these banks do not have any right as to how the merger and aquisition should go, he wants to damn the shareholders and liquidate their banks like that? Does he even have any shares in any of these banks to understand the import of his thoughtless pronouncements.
Thesame way he eroded confidence in the banking sector when his madness first started, he is going to repeat it again the 2nd time. Imagine the adverse effects liquidating 8 banks will have on even the so-called healthy banks. Which investor with a sane mind will want to touch our banks with a 500m pole with a cobfused CBN governor like sanusi. It is high time Mr Lamido Sanusi threw in the towel and admit this job is way above his league to start with. God help us.cial sector he inwittingly brought down the whole sector to a screeching halt.
Any banker or financial expert that is worth his salt knows that bank business thrives on trust and confidence and the moment anyone in his present capacity starts mouthing off about how dubious and criminally minded bankers and the system is, instantly people will start fretting and taking their monies elsewhere.
Now the news making the rounds is yet another policy twist from our very controversial abd extremely erratic CBN governor who has given a deadline to the 8 rescued banks to recapitalize before october 30 or face liquidation.
Now the question that any sane person that has been following this man's trial and error policies is this: did Sanusi not promise us that no bank will be allowed to fail or go under? What was the essense of the whole hullabaloo a about saving the banks initially if it will eventually come to this? Does this man listen to his voice at all? Or does his own voice confuse him as well? He is so full of discordant tones and inconsistencies. Why make us go through all that suffering, more than 30,000 people have already lost their jobs, 620billion naira injected into these banks and our economy stagnated. Is he confused or what? Or he can't wait to see through his policies to the end? I understand he constituted the managements of these rescued banks, so has he lost confidence in them? Or was it a case of the whole plan being programmed to end like this? Why is he in a hurry to sell these banks to foriegners.
He acts like shareholders of these banks do not have any right as to how the merger and aquisition should go, he wants to damn the shareholders and liquidate their banks like that? Does he even have any shares in any of these banks to understand the import of his thoughtless pronouncements.
Thesame way he eroded confidence in the banking sector when his madness first started, he is going to repeat it again the 2nd time. Imagine the adverse effects liquidating 8 banks will have on even the so-called healthy banks. Which investor with a sane mind will want to touch our banks with a 500m pole with a cobfused CBN governor like sanusi. It is high time Mr Lamido Sanusi threw in the towel and admit this job is way above his league to start with. God help us.

queensmith:
I was hoping things will take a turn for the better soon. God forbid we have any major catastrophe the fact we dont even produce our own food is going to lead to economic disaster. *sigh*
Just on one point, I could very easily have the total debt cancelled by proving the Paris Club were aware the money will be squandered when it was lent to the country. Its called responsible lending ,greed and corruption let them dish thier money and If i were in charge they will very much lose it.

I wont pay a penny unless they can produce the solid assets the invested thier billions on- schools ,hospitals, refineries the likes. 30 billion dollars is a damn lot of money to be paying off just like that. I will maintain they continue to chase the past leaders who have stolen it to get it back.

Sounds crazy i know, but even banking laws are on our side on this one.

You obviously do not have zilch knowledge of what you are talking about, no wonder you are taking Caps24 white-man paranoia seriouly to a laughable height. We are all aware of the injustice, blood, power and corruption going on in Libya, I personally do not support NATO dropping bombs in Libya in the guise of stopping Ghaddafi from killing so-called "inocent civilians" but that does not mean I must see every move by the west as bad and start conjecturing baseless conspiracy theories that makes one look like a schizophrenic.
Besides, the issue here is not Libya but Nigeria's goverment's appointment of Dr Ngozi Okonjo-Iweala as finance minister, how Caps24 found away to slip Libya and Africom into it is beyond me.
And please stop arguing like a kid by saying creditors should be told to go after the individuals that secured those loans on Nigeria's behalf. Unless you want a Zimbabwe situation plus the fact that they will ensure we pay that money with even the written off debt.
Okonjo did us a great favour by exiting us from that bundage. That Nigeria can today, argue over the depletion of our foreign reserves was because we did not have to look over our shoulders again. Ngozi's 3years made better efforts at transparency by putting out mechanisms for disbursement of funds, had better management system than the present administration, articulated policies that stimulated the economy. The economic team at that time especial the trio of Ngozi, Soludo and Ezekwesili actually steered the economy to a direction at that time, one could see the benefits of a burgeoning economy at that time until Baba Iyabo felt that he had achieved his aims with the woman and wanted to take charge which led to the woman's exit and every other thing followed suit.
Your analysis of the issue is too simplistic and unrealistic, the fact still remains that Nigeria owed these creditors, agreed to the terms and conditions for securing the loans and then defaulted in most part. Whether we have paid five times the actual principal borrowed in servicing the debt is an arguement that should not concern the creditors but the managers of the loans.
Imagine what would ve happened if we continued to service that debt anually, it is easy for any layman economist to sit down in their arm chair and theorize how the U.S owes China and Japan without talking about the adverse effects it is having on them even with their level of development, let alone a poor country like Nigeria.
I will advise you understand the issues first before making any further ridiculous statement.

@Caps24
Without mincing words, that article you posted is conjectural crap and deliberately overlooks facts. The writer's aim is obviously to maneuver the real issues and facts by giving vague explanations to buttress his points.
Instead of mouthing off about how the minister is a dollar-paid agent of the west, he should be more concerned with the facts that showed how our debt profile ballooned from  $12billion in 1985 to $35billion in 2005.
Can you actually blame all that on the minister? These are the facts we need to face:
· More loans were obtained from both bilateral and multilateral institutions.
· More loans were sourced from the international capital market at "commercial rates".
· The accumulation of "trade arrears" (somebody defaulted on payment & the punishment was the accumulated trade arears we had to pay, am sure we agreed on that terms before taking the loans)
· Fines/Penalties on the debts arising from over-due scheduled payments (And you blame your creditors? Did Nigeria agree to those terms or not before securing the loans?)
· The capitalization of unpaid interests ( thesame issue of default payment)
· Depreciation of the US dollars against other major international currencies in which the loans were taken( now this is where I felt Mr Banjo or whatever his name is  peaked up his sentimental article. Like for real, we should have borrowed in Naira from these creditors; he must think these guys are dunce and do not understand the strength of our unpredictable naira currency. To even assert that after the creditors granted us loans, there was some sort of immediate calls to their sister institutions to put pressure on the government to devalue the Naira is prepostrous and shows his unwillingness to admit that successful administrations goofed big time with the management of these loans which led to serious economic problems that in turn led to IBB's introduction of SAP against strong advice from renown economicsts at that time.
The bottom line is, whether IMF prescribed the devaluation is not the crux of the issue, the issue is what realy led to the problems that culminated to succumbing to the pressure of introducing SAP?
It is instructive to state that debt service payment for Nigeria's debts started on a soft, tolerable level in 1958 until it became a hard bargain years later. The average debt service in the late fifties was N3.2m annually which worked out at 0.2% of the GDP. In other words debt serving was not a big cut on the nation's purse initially. However, later, debt serving became much of burden for Nigeria to bear. Matters came to a head in 2003 when one of Nigeria's creditors the Paris Club demanded an all- time high $3 billion annually for debt service payment. Dr. Ngozi Okonjo-Iweala considered the payment economically unsustainable. She therefore negotiated with the club and got to accept $1.7 billion debt service payment annually. This left an unpaid debt service of $1.3 billion, which the club added to the principal alongside other interests. This is one reason the nation's total debt stock kept on rising.
If you observe very well you will notice that the difference between loans secured from the Paris club and multilateral institutions is in its terms agreed upon and the size of the loans. While it is obvious that the debt potfolio from the latter is manageable as they were secured under concessionary arrangement with little or no interest rates; with 10 years moratorium and about 30 years payment period. The same cannot be said for the former. Hence the need to seek for debt forgiveness and pay off the remnant and move on, let's not forget that was not the first time Nigeria had sought for debt forgiveness. One thing a lot of us have refused to acknowledge is that you can't take away the intrigues of politics when seeking for debt relief from these creditors, all these baseless cries about Ngozi being a stooge is conjectural crap. Somebody should state clearly where and when the woman has sold the country's interests to the west without resorting to what the small devils and demons crip-walking on your shoulders and whispering to your ears in paranoia. Enough said abeg, the woman is exactly the kind of experts we need, people with both the expertise, reach and courage to face the job, not these ugly, colourless Aganga that is so very much busy doing nothing.

@Caps24
Without mincing words, that article you posted is conjectural crap and deliberately overlooks facts. The writer's aim is obviously to maneuver the real issues and facts by giving vague explanations to buttress his points.
Instead of mouthing off about how the minister is a dollar-paid agent of the west, he should be more concerned with the facts that showed how our debt profile ballooned from $12billion in 1985 to $35billion in 2005.
Can you actually blame all that on the minister? These are the facts we need to face:
· More loans were obtained from both bilateral and multilateral institutions.
· More loans were sourced from the international capital market at "commercial rates".
· The accumulation of "trade arrears" (somebody defaulted on payment & the punishment was the accumulated trade arears we had to pay, am sure we agreed on that terms before taking the loans)
· Fines/Penalties on the debts arising from over-due scheduled payments (And you blame your creditors? Did Nigeria agree to those terms or not before securing the loans?)
· The capitalization of unpaid interests ( thesame issue of default payment)
· Depreciation of the US dollars against other major international currencies in which the loans were taken( now this is where I felt Mr Banjo or whatever his name is peaked up his sentimental article. Like for real, we should have borrowed in Naira from these creditors; he must think these guys are dunce and do not understand the strength of our unpredictable naira currency. To even assert that after the creditors granted us loans, there was some sort of immediate calls to their sister institutions to put pressure on the government to devalue the Naira is prepostrous and shows his unwillingness to admit that successful administrations goofed big time with the management of these loans which led to serious economic problems that in turn led to IBB's introduction of SAP against strong advice from renown economicsts at that time.
The bottom line is, whether IMF prescribed the devaluation is not the crux of the issue, the issue is what realy led to the problems that culminated to succumbing to the pressure of introducing SAP?
It is instructive to state that debt service payment for Nigeria's debts started on a soft, tolerable level in 1958 until it became a hard bargain years later. The average debt service in the late fifties was N3.2m annually which worked out at 0.2% of the GDP. In other words debt serving was not a big cut on the nation's purse initially. However, later, debt serving became much of burden for Nigeria to bear. Matters came to a head in 2003 when one of Nigeria's creditors the Paris Club demanded an all- time high $3 billion annually for debt service payment. Dr. Ngozi Okonjo-Iweala considered the payment economically unsustainable. She therefore negotiated with the club and got to accept $1.7 billion debt service payment annually. This left an unpaid debt service of $1.3 billion, which the club added to the principal alongside other interests. This is one reason the nation's total debt stock kept on rising.
If you observe very well you will notice that the difference between loans secured from the Paris club and multilateral institutions is in its terms agreed upon and the size of the loans. While it is obvious that the debt potfolio from the latter is manageable as they were secured under concessionary arrangement with little or no interest rates; with 10 years moratorium and about 30 years payment period. The same cannot be said for the former. Hence the need to seek for debt forgiveness and pay off the remnant and move on, let's not forget that was not the first time Nigeria had sought for debt forgiveness. One thing a lot of us have refused to acknowledge is that you can't take away the intrigues of politics when seeking for debt relief from these creditors, all these baseless cries about Ngozi being a stooge is conjectural crap. Somebody should state clearly where and when the woman has sold the country's interests to the west without resorting to what the small devils and demons crip-walking on your shoulders and whispering to your ears in paranoia. Enough said abeg, the woman is exactly the kind of experts we need, people with both the expertise, reach and courage to face the job, not these ugly, colourless Aganga that is so very much busy doing nothing.

Of late, there have been many comments
on the issue of Nigeria's debt and debt
relief. Whilst it is interesting to see the
variety of opinions, it appears to me that
some of the commentary is not based on
facts. In the absence of facts, there is
often a danger of drawing the wrong
conclusions. To make the debate more
meaningful, it is important to put a few
facts on the table.
Nigeria's external debt stands presently
at US$34 billion. About $28 billion or
85% of the debt is owed to the Paris Club
of 15 creditor nations. Only 8% of the
debt is owed to multilateral institutions
such as the African Development Bank
and the World Bank whilst the balance of
7% is owed to the London Club of
commercial creditors and holders of
Promissory Notes. Nigeria does not owe
the IMF any money. The first fact
therefore is that Nigeria's debt problem is
really "a Paris Club debt problem"
If Nigeria were to fully service its external
debt every year, annual debt service
would amount to approximately US$3
billion - $2.3 billion to the Paris club, and
$0.7 billion to the multilateral and
commercial creditors. The ownership
structure of the debt is such that the
federal government pays 75% of the debt
service whilst 25% approximately is
serviced by the states. Therefore, fully
servicing the $3 billion every year would
mean that the federal government would
have very little left for the capital budget
over the next 5 to 7 years as the federal
government's portion of such debt service
would virtually eat up all of the capital
budget, especially when it is considered
that we also have domestic debt service
amounting to about $1.4 billion a year.
Please note that I am talking about our
capital budget after factoring in the
portion we have agreed to share on
excess crude. The question is how many
Nigerians would be prepared to live with
little or no federal government capital
budget for the next decade whilst we pay
debt? I don't think anyone would
subscribe to that. That is why we
successfully argued with the Paris Club to
keep our present payments to them at US1
billion a year with another $0.7 going to
multilateral and commercial creditors for
a total external debt service of $1.7 billion
a year or approximately 56% of the
amount due.
Whilst this situation gives us temporary
relief to enable us sort out some of our
investment needs and compelling current
obligations such as expenditures on
education and health, it does not provide
a sustainable or permanent solution
because the amount we don't pay keeps
piling up as arrears and gets added to the
principal amount making the debt larger.
The bottom line is that even with the
current high oil prices we cannot afford to
service all of our debt unless we are really
prepared to commit to very limited
investment in our physical and human
resources for the next ten to 15 years. We
cannot also afford to allow the debt to
pile up. So this means that , like other
countries that have found themselves in
similar situations at one time or another,
we must search for a permanent
workable solution to our debt problem.
The search for debt relief is therefore a
vital financial and economic issue for the
country. Anyone who says otherwise is
not looking at the facts and in matters like
these, we must be factual and not
sentimental to ensure we get the best
results for the country. Nigeria does not
belong to the group of Highly Indebted
Poor Countries (HIPCs), although the
country's poor socio-economic indices are
similar to those of the HIPC countries.
Unlike Nigeria, HIPC countries owe the
bulk of their debts to multilateral
development institutions like the ADB and
the World Bank. The present initiative
being developed by British Chancellor of
the Exchequer, Gordon Brown seeks to
assist the HIPC countries with their
multilateral debts by getting them
forgiven or cancelled in full (i.e 100%), or
repaid to the multilateral institutions on
their behalf. Nigeria does not seek to be a
HIPC country. But we are saying that we
too deserve consideration under another
approach set up by the G- 8 countries
called the EVIAN approach (because it
was decided at the G8 Heads of State
summit in Evian, France, two years ago).
Under this approach, countries' debt
situation and the possibility for debt
forgiveness will be considered on a case
by case basis, depending on the peculiar
circumstances of each country and the
country's ability to demonstrate progress
with economic reform.
The G8 and the Paris Club have in the past
considered other countries which are
much better off than Nigeria on a case by
case basis. Examples are Poland,
Yugoslavia, Egypt and, lately, Iraq. These
countries were granted debt relief. We
were not considered because of our
previous poor track record with reform
and our unilateral cessation of dialogue
with them. Now that we are implementing
reforms, there is everything right with
Nigeria seeking debt relief because we
cannot manage to pay the amounts due
over the next decade without starving the
country of money needed for investment
and for poverty reduction programmes
and projects.
Nigeria needs resources for public
investment in roads, power, water,
education, health, agriculture and other
areas. In fact, recent estimates show that
if we are to make adequate progress on
growth and poverty reduction,
particularly achieving the Millennium
Development Goals (MDGs) of halving
poverty by the year 2015, we need to
grow at about 7 to 8% per annum and
this requires an incremental investment of
over $7 billion a year in the sectors just
indicated. The developed countries have
said that they would like to help
developing countries which are managing
their economies well by channeling
resources to them to assist in achieving
the MDGs. Part of the incentives they are
considering is forgiving debt so that
instead of repaying them, debtor
countries can channel the funds into
investments in the core areas noted
above. All we are saying is that Nigeria is
ripe to be considered for this kind of debt
treatment along with others.
We have been implementing our own
home grown reform program - NEEDS -
and the results for last year have been
quite positive. GDP growth was 6%
compared to a 5% target. Average annual
inflation came down from 22% to 15%,
while point to point inflation (December to
December) came down from 23% to 10%.
This was not the single digit inflation we
targeted but we came pretty close at 10%.
The fiscal deficit at $25 a barrel was 1.9%
of GDP, better than the 2.1% we targeted
and the reserves recorded healthy growth
again from $7 billion to $19 billion thus
ensuring that our exchange rate remains
fairly stable.
On the anti-corruption and transparency
front, everyone knows we have a huge
problem and an incredible challenge, but
our development partners openly
acknowledge now that we have been
demonstrating willingness and resolve to
be more transparent and to deal with
corruption. We are publishing the
revenues which all tiers of government
get each month and we have even
published a booklet showing what all tiers
got for the first five years of President
Obasanjo's administration. We are
running a successful procurement reform
called Due Process and everyone
acknowledges that Due Process is
working well. We have launched the
Extractive Industries Transparency
Initiative (EITI) to better expose and make
transparent oil industry accounts and
understand the structure of expenditure
and revenue in the sector. We have the
acclaimed efforts of the Economic and
Financial Crimes Commission (EFCC),
which is making strides in bringing
economic criminals to book, sometimes
against all odds. We have intensified
efforts to find our looted funds abroad
and bring the funds home - something
that not many developing countries have
managed to do.
We now monitor our budget
implementation and give half yearly
reports to the National Assembly and the
Nigerian public - something that was not
available before. We are improving on this
by adding a mechanism in this budget
year 2005 to track poverty related
expenditures to ensure we can trace the
results on the ground in respect of money
going to certain key sectors from the
budget. We are now working with several
competent and willing state governments
to get the same kinds of mechanisms
introduced at the state level. While huge
challenges remain, these efforts have
convinced many of our partners that
monies from debt relief (75% of which
will go to the federal government) will be
well used and well monitored.
Let me conclude by saying that while
Nigeria is potentially a rich country, it is
presently a poor country and must
therefore manage its resources wisely
and well. Our total oil revenues last year
were no more than $25 billion net. When
it is spread over our large population of
130 million people, as I said elsewhere,
this translates to no more than 53 cents
or 70 naira per person per day. Compare
this with Venezuela with 23.5 million
people and $3.4 per person per day,
Kuwait with 2.75 million people and $
27.3 per person per day, or even Iraq with
25 million people and $2.4 per person per
day and you will see that Nigeria, even in
the best possible circumstances, is facing
serious financial challenges.
That is why we are also focusing on
improving our non-oil revenues. That is
why we are making a sustained effort to
plug all leakages and discourage rent-
seeking behaviour. That is why our reform
programme aims at creating an enabling
environment including a rational system
of incentives and values, characteristic of
a private sector driven economy. The road
is hard and long but together, these
efforts would assist in wealth creation
and poverty reduction for Nigerians. No
one can guarantee that we'll get debt
relief. We might make all the efforts and
still not get it. But there is no reason why
we shouldn't try our very best to qualify
and then leave the rest in God's hands!
The developed countries say they want to
assist African countries more this year
and going forward. The UK, in particular,
has said that the focus of its
chairmanship of the G-8 and the EU this
year will be Africa. They have produced
the Commission for Africa report
indicating specific ways they want to
assist African countries, including through
granting debt relief. Since we are already
working hard to improve our economy for
the benefit of our people through NEEDS,
we should not be shy to leverage our
efforts into asking for consideration for
debt relief. Not trying at all would be a
disservice to our people.

Several reasons have been given; some of
these reasons are:
· More loans were obtained from both
bilateral and multilateral institutions.
· More loans were sourced from the
international capital market at commercial
rates.
· The accumulation of trade arrears
· Fines/Penalties on the debts arising
from over-due scheduled payments
· The capitalization of unpaid interests
· Depreciation of the US dollars against
other major international currencies in
which the loans were taken
Giving a specific insight into one reason
why Nigeria's debts ballooned, Dr. Ngozi
Okonyo-Iweala4 said, for instance, that
the parish club debt payment of $12.119
billion demanded before Nigeria's other
Paris Club debt of %+$18 billion was
written off was the accumulated interest
arrears of the debts several times over. In
fact, a Nigerian newspaper5 has
explained that the actual initial loan was
$17 billion. Nigeria has not only paid $35
billion for this loan but paradoxically still
owed about $35 billion until the Paris
Club debts relief came. Debt service
payment for Nigeria's debts started on a
soft, tolerable level in 1958 until it became
a hard bargain years later.
To start with Prof. Mike Obadan6
explained that the average debt service in
the late fifties was N3.2m annually which
worked out at 0.2% of the GDP. In other
words debt serving was not a big cut on
the nation's purse initially. However,
later, debt serving became much of
burden for Nigeria to bear. Matters came
to a head in 2003 when one of Nigeria's
creditors the Paris Club demanded on all-
time high $3 billion annually for debt
service payment. Dr. Ngozi Okonjo-Iweala
considered the payment economically
unsustainable. She therefore negotiated
with the club and got to accept $1.7 billion
debt service payment annually.
This left an unpaid debt service of $1.3
billion, which the club added to the
principal alongside other interests. This is
one reason the nation's total debt stock
kept on rising7. In 2005, before the exit
debt payment to the Paris Club was made
by Nigeria, total external debt service
payment was $1,367.54 million made up
of principal repayments of $978.36
billion; and interest payments and
commitment charges of $389.17 million8.
However, with the inclusion of a debt
service payment of $7,575.92 million
under the first and second phases,
payment made for debt service in late
2005 was $8,943.45m. This is the
highest debt service ever paid in a single
year in the history of Nigeria. (Table 2).
Although Nigeria has exited the Paris Club
debt and so won't have to service the
debts anymore, she is still servicing her
non-Paris Club multilateral and private
debts which in 2005 were cumulatively
put at $670.9 million. (Also, See Table 2)
From the foregoing, one can observe that,
indeed, servicing Nigeria's external debts
drained her resources and is still doing so,
presently. Paris Club debts, according to
the Debt Management Office (2005)
accounted for about 75.26% of Nigeria's
total debt stock. Impliedly, the other
categories of debts make up the balance
24.74. Below is a breakdown of these
other debts 9.
· Multilateral debts ……………….$2.70
billion
Non-Paris Club Debts
· (Bilateral Debts)…………………$121.04
million
· London Club Debts………………$1.44
billion
· Promissory Notes ………………, $580.49
million
All these debts approximated to $5 billion
Dr. Ngozi Okonjo-Iweala has said that the
multilateral and bilateral debts portfolio
are more manageable because a large
bulk of them are owed to multilateral
institutions. They were secured under
concessionary arrangement with little or
no interest rates; with 10 years
moratorium and about 30 years payment
period. The same cannot be said for the
London club debts.
It is for this reason Nigeria's new finance
Minister, Mrs. Nenadi Usman10, disclosed
in September 2006 that the nation was
making arrangements to exit the club by
January 2007. In a published interview
with ThisDay Newspaper, she stated: "We
are making progress in our negotiations
with the London Club. We are on the verge
of exiting the Club. Our debt of about $2.1
billion is made up of oil warrants of $300
million and promissory note of $515
million. The balance is bonds. That is the
composition of our London club debts.
Just as we exited from the Paris Club, we
intend to exit from the London club in the
not-too-distant future. If I am to estimate I
will say that by January 2007 we would
be out of the London Club"
Nigeria has been ruled since independence
in 1960by a mixed grill of Civilian and
military leaders. Both of them have been
accused of contributing to Nigeria's
foreign debt overhang. However, there
are two qualifiers here. It is generally
agreed firstly that the military were more
responsible for the nation's debt crisis.
Secondly, within the military ranks,
Generals Muhammedu Buhari and Sani
Abacha were credited with contributing
far less to Nigeria's borrowing crisis than
their military colleagues. For instance,
both of them didn't borrow foreign loans
during their tenure.
Therefore, the inherited stock of Nigeria's
debt remained stable. Nonetheless, the
total debt stock increased because of
penalties and interest incurred by Nigeria
for not servicing her debt especially
during Abacha's rule, a time the total debt
was estimated to be $26.06 billion. So
far, it has been established by
campaigners for debt relief that a large
bulk of Nigeria's external loan and
resources were stolen.
Essentially, the loans were not delivered
into their designated developmental
projects, consequently the loan became
unsustainable when they matured for
repayment. It was because of this line of
thinking that the concept of stolen wealth
arose as a subject of critical study in the
debt debate. In fact, the Nigerian
authorities and CSOs argue that Nigeria's
debt arose partly because most of her
loans were misappropriated by her
leaders. It is for this reasons large
portions of the loans were considered
illegitimate by CSOs.

Several reasons have been given; some of
these reasons are:
· More loans were obtained from both
bilateral and multilateral institutions.
· More loans were sourced from the
international capital market at commercial
rates.
· The accumulation of trade arrears
· Fines/Penalties on the debts arising
from over-due scheduled payments
· The capitalization of unpaid interests
· Depreciation of the US dollars against
other major international currencies in
which the loans were taken
Giving a specific insight into one reason
why Nigeria's debts ballooned, Dr. Ngozi
Okonyo-Iweala4 said, for instance, that
the parish club debt payment of $12.119
billion demanded before Nigeria's other
Paris Club debt of %+$18 billion was
written off was the accumulated interest
arrears of the debts several times over. In
fact, a Nigerian newspaper5 has
explained that the actual initial loan was
$17 billion. Nigeria has not only paid $35
billion for this loan but paradoxically still
owed about $35 billion until the Paris
Club debts relief came. Debt service
payment for Nigeria's debts started on a
soft, tolerable level in 1958 until it became
a hard bargain years later.
To start with Prof. Mike Obadan6
explained that the average debt service in
the late fifties was N3.2m annually which
worked out at 0.2% of the GDP. In other
words debt serving was not a big cut on
the nation's purse initially. However,
later, debt serving became much of
burden for Nigeria to bear. Matters came
to a head in 2003 when one of Nigeria's
creditors the Paris Club demanded on all-
time high $3 billion annually for debt
service payment. Dr. Ngozi Okonjo-Iweala
considered the payment economically
unsustainable. She therefore negotiated
with the club and got to accept $1.7 billion
debt service payment annually.
This left an unpaid debt service of $1.3
billion, which the club added to the
principal alongside other interests. This is
one reason the nation's total debt stock
kept on rising7. In 2005, before the exit
debt payment to the Paris Club was made
by Nigeria, total external debt service
payment was $1,367.54 million made up
of principal repayments of $978.36
billion; and interest payments and
commitment charges of $389.17 million8.
However, with the inclusion of a debt
service payment of $7,575.92 million
under the first and second phases,
payment made for debt service in late
2005 was $8,943.45m. This is the
highest debt service ever paid in a single
year in the history of Nigeria. (Table 2).
Although Nigeria has exited the Paris Club
debt and so won't have to service the
debts anymore, she is still servicing her
non-Paris Club multilateral and private
debts which in 2005 were cumulatively
put at $670.9 million. (Also, See Table 2)
From the foregoing, one can observe that,
indeed, servicing Nigeria's external debts
drained her resources and is still doing so,
presently. Paris Club debts, according to
the Debt Management Office (2005)
accounted for about 75.26% of Nigeria's
total debt stock. Impliedly, the other
categories of debts make up the balance
24.74. Below is a breakdown of these
other debts 9.
· Multilateral debts ……………….$2.70
billion
Non-Paris Club Debts
· (Bilateral Debts)…………………$121.04
million
· London Club Debts………………$1.44
billion
· Promissory Notes ………………, $580.49
million
All these debts approximated to $5 billion
Dr. Ngozi Okonjo-Iweala has said that the
multilateral and bilateral debts portfolio
are more manageable because a large
bulk of them are owed to multilateral
institutions. They were secured under
concessionary arrangement with little or
no interest rates; with 10 years
moratorium and about 30 years payment
period. The same cannot be said for the
London club debts.
It is for this reason Nigeria's new finance
Minister, Mrs. Nenadi Usman10, disclosed
in September 2006 that the nation was
making arrangements to exit the club by
January 2007. In a published interview
with ThisDay Newspaper, she stated: "We
are making progress in our negotiations
with the London Club. We are on the verge
of exiting the Club. Our debt of about $2.1
billion is made up of oil warrants of $300
million and promissory note of $515
million. The balance is bonds. That is the
composition of our London club debts.
Just as we exited from the Paris Club, we
intend to exit from the London club in the
not-too-distant future. If I am to estimate I
will say that by January 2007 we would
be out of the London Club"
Nigeria has been ruled since independence
in 1960by a mixed grill of Civilian and
military leaders. Both of them have been
accused of contributing to Nigeria's
foreign debt overhang. However, there
are two qualifiers here. It is generally
agreed firstly that the military were more
responsible for the nation's debt crisis.
Secondly, within the military ranks,
Generals Muhammedu Buhari and Sani
Abacha were credited with contributing
far less to Nigeria's borrowing crisis than
their military colleagues. For instance,
both of them didn't borrow foreign loans
during their tenure.
Therefore, the inherited stock of Nigeria's
debt remained stable. Nonetheless, the
total debt stock increased because of
penalties and interest incurred by Nigeria
for not servicing her debt especially
during Abacha's rule, a time the total debt
was estimated to be $26.06 billion. So
far, it has been established by
campaigners for debt relief that a large
bulk of Nigeria's external loan and
resources were stolen.
Essentially, the loans were not delivered
into their designated developmental
projects, consequently the loan became
unsustainable when they matured for
repayment. It was because of this line of
thinking that the concept of stolen wealth
arose as a subject of critical study in the
debt debate. In fact, the Nigerian
authorities and CSOs argue that Nigeria's
debt arose partly because most of her
loans were misappropriated by her
leaders. It is for this reasons large
portions of the loans were considered
illegitimate by CSOs.

2.0 Background/Context Of Nigeria's
External Debts
Nigeria's external debts stood at a little
over $35 billion in 2006. Nigeria's former
minister of Finance Dr. Ngozi Okonjo-
Iweala disclosed this fact during a Grand
House reception for her at Niteshift
Colliseum in Lagos on 2nd July, 2006. On
the occasion, she said: "Initially, we owed
$35 billion and $30m billion of that was
owed the Paris club group of creditors of
15 countries, most of them Western
countries and Japan. We exited the Paris
Club through the debt cancellation. So $5
billion is left. We don't owe the IMF even
one kobo. Of the $56 billion that is left
about $2.5 billion is owed multilateral
Institutions. This includes the World Bank,
African Development Bank, among others,
and these are long term, 30 to 40 years
loan of little or no interest1" From the
former minister of finance exposes, one
can see that Nigeria has two major
categories of external creditiors2.
Namely, they are official creditors and
Private creditors.
Her official creditors are:
· International Fund for Agricultural
Development (IFAD)
· African Development Fund (ADF)
· European Development Fund (EDF)
· International Bank for Reconstruction
and Development (IBRD)
· African Development Bank (ADB)
· Economic Community of West African
States (ECOWAS) Fund
· European Investment Bank
These official lists of international
funders are Nigeria's Multilateral
creditors. In the bilateral league are the:
· Paris Club Creditors
· Non-Paris Club Creditors
Finally, Nigeria is indebted to Private
Creditors which consist of :
· Promissory Note Holders
· The London Club Group
Initially, Nigeria borrowed concessionally
only from the World Bank, a multilateral
institution. This explains why in 1960
when Britain - Nigeria's colonial masters-
handed over power to Nigeria, she had
only incurred external debts of N82.4m as
the Table below illustrates. It needs to be
explained here that a major component of
the external debts of N82.4m was a soft
World Bank loan of $280m sourced for
financing Nigeria Railways extension to
Bornu in the Northern part of Nigeria.
The extension was built. Therefore, the
loan wasn't diverted. The table also
shows that Nigeria's external debts have
been increasing over time because of a
proportional shortage of foreign
exchange to meet her developmental
needs.
Borrowings were however still done with
caution, disciplinary prudence and fiscal
responsibility until 12977. That year,
Nigeria's borrowing profile changed
drastically. Nigeria's head of state, Gen.
Olusegun Obasanjo (1976 - 1979)
obtained a jumbo loan of one billion
dollars - thus breaking the tradition of
taking external loans in relatively small
amount. Given this, Nigeria's external
debts frog leaped from the million-dollar
category to that of billion dollars. In strict
terms, Nigeria's foreign debts rose from
$762.9m in 1977 to $2163.8m in 1978.
This wasn't all. Obasanjo also departed
from the tradition of borrowing from
multilateral/bilateral institutions to
sourcing loans from the international
capital market. It was at this point Nigeria
laid herself open to the possibility of
external debt peonage. This was because
the jumbo loan had higher and variable
interest as well as shorter maturity date
and repayment period. Additionally, he
later took more loans before he handed
over power to the civilian administration
of President Shehu Shagari (1979-1983)
in 1979 before the loans were due for
repayment.
Thus Obasanjo passed on the loans to a
less efficient and very corrupt government
when cumulatively the debts had climbed
to $2,824.6m. Ever since, the debts have
increased until they peaked in 1988 to $
29,282.0m. Later in 2005, the debts hit
an astronomical height of about $35.6
billion.

I see a lot of closet homo-se.uals waiting to capitalize on this nonsense tyrannical resolution to indulge their despicable act in the open hence their resort to distractions and non-issues.

People should understand the context of the protest before rushing to say that is not Nigeria's immediate problem like anybody raised that line of argument. The issue of homosexuality was being discussed and Nigeria lent its voice, there is nothing wrong with that, whether it is not a serious issue or not for Nigeria is subjective but at that point the topic was not the numerous problem of Nigeria but homosexuality and their inordinate quest for a resolution that makes it binding on every country that signed the UN charter to accord them rights that hitherto do not exists in the constitutions of these many countries. I say that is balderdash and nonsensical, period.

Basseti:
Thanks a lot.

We Nigerians have a funny way of ascertaining what is wrong and right. Yet our country is held back by gargantuan corruption that is actually extolled and encouraged. Hypocrites.

what exactly is your point? That we should fold our hands akimbo and wait till it gets to a point where according to you it will be worthy of discussion?
Do you know or even understand the whole politics behind this homosexual proliferation? Do you think it is a question of rights or just some people trying so hard to convince a majority to see their excessive indulgence as normal?