OUR CENTRAL BANK GOVERNOR PROTECTS THIEVING BANKS
When some renowned Nigerian intellectuals like Prof. Pat Utomi were describing Sanusi Lamido Sanusi, the Governor of the Central Bank of Nigeria, as emotional, reckless, with a penchant to play to the gallery over his banking reforms about a year ago, I was inclined to give Sanusi the benefit of the doubt. When Sanusi himself gave the terroristic antics of the Western dominated, racist, obtuse, morally delinquent IMF leadership's destructive economic recommendations against African best interests a TKO, in March, 2011, I was completely bowled over to Sanusi's side. I started seeing him, along with Prof. Attahiru Jega, as the first two potential Nigerian presidential materials to blossom out of the North in our recent history. Sanusi's dumb announcement in April, 2011, to limit individual customers' daily money bank withdrawals and lodgments to N150,000.00 confirmed beyond doubt that our Pat Utomis were right all along about their assessment of Sanusi as being bereft of substance and full of drama, hyperbole, and with a dangerous streak of misplaced arrogance.
May be his recent award as the World's Central Bank Governor of the year got into his head and he decided to play God. He even boasts about not going back on his plans as if his mandate as the Nigeria Central Bank Governor stretches to the point of limiting how much cash an individual bank customer can withdraw from or lodge daily in money bank accounts. No Central Bank Governor in the world has such a mandate. No head of state has such a mandate either, definitely not the Nigerian President. Our National Assembly could make such a law only after declaring a national emergency as a consequence of a debilitating war situation perhaps.
Instead of evolving people friendly policies as is being done in civilized nations of the world, our square pegs in round holes' policy formulators are thinking of how to return us as a people to the Stone Age. Will cash withdrawal and lodgement restrictions improve our inadequate energy and drinking water supply situation, or bad roads, road network, density and accessibility problems? What about our primitive transportation system, lack of shelter, food, endemic poverty and the incapacitating hunger in the land, or the ever spiralling unemployment rate, or poor educational and health facilities? The list is endless and in all the indices of civilized modern living, we are not only the most backward on earth, we are moving further backwards into self-imposed anarchy and oblivion. Does this policy suggest a thinking government?
Our National Assembly mob are too busy stuffing their pockets from our patrimony that has already been grossly whittled down by them, to care about formulating people friendly policies. Our president appears compromised by his zoning scar promoting myopic, sectoral distortions in our body polity as exemplified by the greedy regional hijack of the presidency and speakership positions in the National Assembly.
Emboldened, Sanusi pushes for Islamic banking in Nigeria, obviously to heighten religious tension, division and intolerance in the land. There is no Islamic country in the world today not suffering from severe civil strife. They export their senseless, myopic wars around the globe and developing countries are their most vulnerable victims. The process starts from seemingly innocuous beginnings such as an Islamic bank that discriminates between Muslims and non-Muslims in functions and products, and introduces separate queues for Muslim men, women and non-Muslims, in banking halls.
The separate queues' culture soon begins to be taken for granted and to spread quietly into the public domain. An ultimate recipe for disintegration in a secular country like Nigeria which is already a melting pot of bitter non-native religious rivalries and acrimonies, and where an Islamic fundamentalist sect, Boko Haram, with the active support of Maghreb's Al'-Qaida sects from neighbouring countries, is throwing bombs daily, killing dozens of innocent people in public places and sacking churches and police stations to precipitate a jihad. The timing to introduce the bank in Nigeria is not only extremely troubling; it is an affront to the collective ambition and acumen of a people struggling desperately to evolve a common destiny.
The creeping illegality began germinating in Nigeria with the introduction of sharia laws in a few states smitten with Arab supremacy. Interestingly, Arabs call Blacks and Africans abeed, (meaning slaves, their slaves), and treat all Blacks as such. By the default of not being challenged, sharia in Nigeria metamorphosed national dimension in the guise of a 'do good' Islamic bank that doles out interest free loans to all and sundry. An irresistible bait in poverty stricken, alien mentally and religiously enslaved societies. The truth, however, is that the bank has not impacted positively on the lives of Arabs' indigenous poor who are the derelict Black original owners of all Arab countries, including Libya, Algeria, Tunisia, Morocco, Egypt, Saudi Arabia, Sudan etc., which is why we have South Sudan now, with Darfur in toe. The Islamic bank, charges interest by non-conventional formats and names, to remain in business. The bank's debtors end up paying higher interests by whatever Arab names called, than what operates in conventional banks, because the Islamic bank becomes a fortune sharing part-owner of the businesses of its loans, until the loans are liquidated.
Why do we keep pursuing things that divide rather than unite us as a people? Sanusi says he is doing so because there is Islamic banking in Britain. Britain is not a secular country, Nigeria is. Britain has the resources, sufficiently sophisticated intelligence gathering mechanism, intimidating security efficiency and might, to quickly isolate their small Muslim population and nip whatever threats they pose in the bud.
Civilization is hurtling away on a supersonic train. We are not on the train, we are on the side walk, hanging on to stupid, mundane, outmoded, barbaric, demonic pre-occupations, imposed by some archaic era alien illiterate ruler, monarch, dynasty, as if our lives still depend on our selfish, exploitative, self-centred past masters who abandoned us naked on the by-lane of wretched existence. In an exciting new age of Barack Obama, unlimited possibilities, robust inclusiveness and collective responsibilities for decision making for our common future, regardless of gender, race or tribe, women are still being flogged or buried alive for adultery; husbands are still divorcing wives by simply pronouncing “I divorce you” three times, and wives cannot do the same; people's arms and legs are still being brutally amputated for stealing an egg or a chicken.
An ex-governor turned senator, recently married and is sleeping with the baby wife aged ten years and we are told not to scream, not even when potentially destabilizing Islamic bank is being foisted on our secular and fragile climate. When are we going to get on the moving train and contribute something of our own to human caucus and progress, outside of our Arabic and Caucasian influences and mind control? What would our contributions be? Surely, cashless society cannot be one of them? Our great Sanusi, a sucker for controversy, says why not, and to up his ante, has threatened to limit daily individual cash withdrawals and lodgements to N150k.
The relationship between a bank depositor and his bank is predicated on the trust that the customer can withdraw his money at will and without penalties the next minute after making the deposit, regardless of the amount involved. In other words, he can close his account any minute and any day, no matter the amount in the account. This law is sacrosanct and is the most important one in the relationship between banks and their customers. When you withdraw this rule, you destroy banking. You are telling customers not to trust their banks, or that our banks are financially stressed and unreliable, and that customers should keep their cash under their pillows at home. Eighty percent of the money in circulation in Nigeria is outside the banking system. With this Sanusi's scare, the twenty percent domestic activities money in banks is being asked to join the eighty percent cash outside the banking system.
The safest time-proven way to withdraw money from a bank account is with signatures and physical appearances before bank cashiers. The system is not hundred percent theft proof but is a long way more secure than using ATM machines or POS terminals or credit cards, which are extremely unsafe and untried in our environment. Electronic money is propelled by electricity. There are several communities in Nigeria that have never enjoyed electricity use. Even in our urban areas, we often do not have electricity for days, weeks and even months at a time. Would buying and selling businesses have to stop when there is no electricity?
The POS system works like the Western Union or Money Gram transfers which some Nigerian banks have turned into a nightmarish experience for customers. Bank clerks after verifying customers' withdrawal secret codes on their computers, tell the customers either that their money has not arrived or that the codes are incorrect, and ask the customers to check with their benefactors. While the customers are out of the bank trying to reach their benefactors on the phone etc, the bank clerks use proxies to collect the money and tell the customers when they return to the bank, that the money has been collected. Bank authorities treat such grossly aggrieved and cheated customers' protests often with levity and turn the heat on the customers as if they are the thieves.
Our banks sabotage the ATMs too. More money has been stolen by bank staff in Nigeria in the last two years through the ATM cash withdrawal system than through signature induced cash withdrawals in the last twenty years, for instance. Everyone I know, using the bank ATM machines, has lost staggering amounts to bank staff in the last two years and this is because private codes facilitating withdrawals consist of numbers and or letters easy to memorise and use by thieves without attracting forgery notice as with signatures. There are several cases in courts at the moment involving millions of naira stolen by bank staff through the ATM facility.
Customers with ATM fraud cases in courts cannot win, however, because our banks install ATMs as their fraud game plan enhancers. As the sole providers and controllers of ATM cards and cash withdrawal secret codes, our banks demand before issuing the ATM cards, customers' signatures on documents granting the banks, immunity from prosecution if money is stolen with ATM cards from the customers' funds in their custody. In order words, our banks, with the permission and authority of our almighty and infallible Sanusi's Central Bank, fraudulently acquire advance legally binding approval to rob their customers with impunity through ATMs. Obviously, the banks know that ATMs are risks porous traps, but refuse to share in the risks or take any blame if their customers suffer ATM losses even through their own bank staff. Why should customers be forced to accept such cards in our dicey clime?
The answer to that question exposes the import of Sanusi's cashless society. Sanusi wants to protect the robbers against the robbed by imposing without choice, their fraud infested e-money systems on hapless citizens. The World Bank applauds our Central Bank out of ignorance or mischief, for the genius of the carefully schemed bank managers' stealing fair. So, who will protect the robbed against our Central Bank's motley crew of day light robbers?
Credit cards providers abroad such as VISA and MasterCard, did not want to operate in or franchise banks in Nigeria until a few years ago. Their foreign providers of credit card payments' filtering stations for Internet purchases and services such as Paypals, still unjustifiably operate global rejection of merchants and services with solely Nigeria based addresses because of lingering, now largely biased blanket credit rating doubts. Credit cards are just as unsafe as the ATMs because many people have access or can see and steal customers' private codes or PINs at the terminal end of purchases or services. The facilitators of credit cards such as the VISA and MasterCard are still struggling to perfect the reduction of their illegal usage around the world with a new chip recently introduced to facilitate https websites. There are websites on the Internet selling credit card codes and PINs discretely. Nigerians are among notorious credit card fraudsters and abusers abroad so you can imagine what they could turn the system into in their own environment.
Nigeria is not only tarnished as one of the most corrupt nations on earth, several chief executives of banks and their wives are being prosecuted at the moment for stealing their banks sick to the tune of billions of naira. Nine out of 24 Nigerian banks are stressed almost beyond rescue right now by their chief executive scoundrels and we do not know how many of the banks would survive even three months from now. These bank chiefs form the core of the Bankers Committee hailing Sanusi on, to force the e-money system on citizens, because the system is easy for them to manipulate and undermine. You dare not issue dud cheques in advanced economies. Our Central bank has not measured up to that task yet. Our cheques bounce like yoyos; our credit cards are suspect; our ATM/POS are robbers' toys, and Sanusi wants to kill cash transactions, the only system that is slightly sane in our environment right now.
On June 29, 2008, Business Eye, a weekly Nigeria journal, published that bank employees aided by their employers, defraud unsuspecting individuals and corporate customers to flaunt impressive statistics at the end of their financial year. That our banks perpetrate frauds in over 33 ways, the most common methods being: Advance fee fraud, Cheque kiting, Account opening, Letters of credit, Money transfers, Counterfeit securities, Round tripping on foreign currencies, passing of illegal charges to clients and many more. The article concluded as follows: “Worrisome is the fact that the trend is on the rise and nothing seems to be done to check it by the regulating authorities. Indeed 'robbers are in our banking halls.'”
I had tackled the issues of illegal charges by banks in an article published in the Guardian (Nigeria) newspaper a few years earlier under the headline: 'Voodoo banking in Nigeria.' In the article, I emphasized that the more you look (even without making withdrawals from your bank accounts), the less funds you see until it is whittled down to zero in no time. Therefore, Sanusi's attempt to impose cashless transactions on society, particularly at this time of grave mistrust in banking, is a deliberate attempt to distract and trap us for the banking hall thieves to empty our funds in their care.
The policy on cashless economy was supposed to be the end part strategy of a big picture. Something that falls in place when other very critical structures have been achieved. It was the initiative of the Financial System Strategy (FSS) 2020, funded from inception in August 2006, by the Central Bank under the governorship of Chukwuma Soludo until President Yar'Adua began making budgetary provisions for it in 2009. On September 2, 2007, the FSS2020 Steering Committee at its first retreat at the Sheraton Hotel, Lagos, formulated the FSS2020 implementation road map, which did not envisage e-money or e-payments being able to compete robustly with cash usage in our economy in less than 13 years, during which period, certain basic requirements must be on ground and working perfectly.
The requirements include adequate infrastructure, constant power supply, good roads, good communications network, security, development of human capital and legal regulatory reforms. Can Sanusi confirm to Nigerians that these provisions to secure and drive the e-payments' system have been achieved or can be achieved in the next one year? Given the pervasive nature and damaging level of corruption and mistrust between our banks and in banking and society generally, would one year be enough to provide all the necessary provisions and test-run the e-money culture that is yet to be in place?
Commonsense suggests that we would need some ten more years as was envisaged by FSS2020, to put the provisions in place, promote massive public education, and for the Central Bank to install meticulous and sound monitoring system of banks and banking activities because even our banks themselves have no confidence yet in e-payments. They issue debit rather than credit cards that are the norm in Europe, America and even South Africa. Also, our banks are reluctant to accept e-payments made with cards that are not theirs. Not accepting or the reluctance to accept such transactions means that the e-payment system is dead before birth. Cash transactions should be allowed to work side by side with e-payments, while the e-payment system picks up steam on its own volition during the period, through confidence building measures amongst stakeholders.
The legal instrument of doing business in Nigeria and the instrument recognized by the constitution is the naira cash currency anyway. All other forms of exchange whether electronic or barter are optional and cannot be forced as replacement for naira cash usage. In other words, the individual has the option and prerogative to indulge in the options at his or her own risk. Even in very sophisticated societies were the optional instruments of doing business have been in operation for decades and have achieved some measure of popularity and efficiency, the optional forms of money for doing business remain optional, which the individual is not forced to use but is free to indulge in at his peril.
There is no cashless country in the world and no country restricts cash withdrawals or deposits. Sanusi quotes the examples of Kenya and Uganda to support his plan. These countries do not restrict cash deposits and withdrawals. What has happened in Kenya, Uganda, Europe and the USA is that the e-money system has won customers' confidence enough to be in popular use in retail and other outlets and to compete with cash withdrawals from banks. It has not removed cash withdrawals or deposits; it has only become the preferred choice of customers by its efficiency, convenience and reliability. In Britain and the USA, I withdraw thousands of dollars or pounds cash from my account when I visit and want to buy things to bring back to Nigeria. In fact, abroad, restrictions on withdrawals are placed on electronic money rather than on cash withdrawals because of the relatively insecure nature of the e-money system. Because ATMs are placed in public places where a robber with gun could be standing next to you on the queue, it is dangerous to openly and brazenly withdraw a lot of cash in broad day light. Credit card withdrawals are on the average limited to periodic manageable amounts such as $100 or pounds, to control the volume of money that could be stolen at a time.
You can not jump from the fiftieth economy in the world to the twentieth, let alone to number one, in twelve months. I wonder if there is something we do not know yet about who got what and how e-money licenses? The scandalous haste to surpass countries that have been using e-money for more than thirty years, in one noon-day swoop that puts the cart before the horse, or practice above learning, is very disturbing in deed. This is more so in our society where 99.9% of the people do not know what e-money means and 95% is ICT illiterate. Sixty to eighty percent more Nigerians need to have access to banking facilities before e-money can begin to compete with cash transactions. These people cannot be cajoled into banking halls in one year of newspaper advert blitz they are too illiterate to read, or TV and Radio jingles they have no electricity to see or hear. It would require, at least, ten years of intensive mass literacy drive, consistent proven evidence of strong growth in confidence in doing business with banks, and massive incentives by banks to attract customers to use the options. Incentives similar to what mobile phone companies currently use to win over customers.
How many outlets in Nigeria yet accept credit cards? I am not aware of any. One might be able to use it for airline tickets to travel abroad and on the Internet to buy goods or services but how many Nigerians are travelling abroad or living lives on the Internet? Is my neighbourhood shop or the Ajegunle market woman selling provisions online? Can I use credit cards to buy stuffs from Alaba market or car parts from Oshodi or Mushin? Is Sanusi's mum Internet literate? What about his maiguard, washerman, housemaid, driver? How do they live on e-money? Can I use credit cards to buy land or pay school fees or sponsor ceremonies like graduation or freedom parties or birthdays for my kids or the birth of a new born baby or the death anniversary of a parent, or the marriage of a daughter? Will celebrants accept the excuse that Sanusi did not allow me to withdraw enough money from my bank account? How do I sponsor relatives to go into business or feed or pay hospital bills or bury my dead or evacuate victims from accident scenes? Would rural clinics accept credit cards or would dying patients have to wait for the e-money to materialize into real money, or credit cards verified, before receiving treatment?
On the day I first read about Sanusi's cash transaction restrictions, I had gone to the bank to withdraw N600k. By the evening of that day, I had less than N8k cash left from the money withdrawn. I had spent the cash repairing my car, helping some relatives, buying food items for the home, paying domestic staff salaries and picking a N28k generating set from Alaba market for a friend's shop. Of course, I do not spend N600k daily but no one has the right to restrict me from spending more or less than that daily on essential needs if I have the money.
If 80% of the cash used in Nigeria is from outside banking, is it not wicked to try to restrict movements of the 20% cash in banks? Most of the money individuals spend daily in Nigeria is spent in the informal market. Our informal business sector accounts for over 80% of Nigeria's domestic economic activities and depends entirely on cash usage. The informal market feeds the formal and vice versa. There is a symbiotic relationship. Money moves unhindered between them. The urban dweller, perhaps banked, hires transportation at great expense to the rural areas to buy truck loads of yams, plantains, groundnuts, palm oil and even cows to bring back to Sanusi's urban market to distribute to retail outlets. Sanusi believes the rural market do not exist or matter because they do not trade with e-money or on the Internet.
Millions of naira businesses take place daily at petrol stations, beer or textile distributors' outlets, electronic shops etc, which by Sanusi's laws, can no longer be banked and must be taken home to keep under pillows. In fact, Igbos are convinced that Sanusi is after them, i.e., Alaba, Trade Fair Complex, Ariaria market etc, selling in millions of naira daily and being condemned to resort to pillow banking.
Sanusi says he is doing us a favour by saving cost of managing cash movements. No country penalizes self and her citizens by truncating economic activities because of such inconsequential or negligible social cost. A robust economy benefits from citizens' free use of cash. In any case, how much cash are we moving in our 'yeye' economy anyway, compared with the economies of developed countries like the USA, Japan and Germany?
Limiting daily individual cash withdrawals and lodgements in money banks to N150k (US$1000), is not the magic wand for arresting galloping inflation, continuing downward fall of the naira exchange rate against foreign currencies, high interest rate charges by banks, money laundering, endemic corruption in society, the reversal of high unemployment rate, sagging confidence in banking services and the transformation of our economy into one of the best performing twenty in the world in a hundred years, let alone in just one year as Sanusi is touting.
The high cost of managing cash in banks, a persistent Sanusi complaint, is not the reason why our banks are charging high interest rates, rather, greed and infrastructural problems such as lack of power etc are responsible. Our banks pass their cash management cost to their customers anyway. They tend to be lazy, largely uncreative and to demonstrate prodigious appetite for profits without wanting to spend or sweat. Sanusi's argument that high bank charges would check money laundering is rubbish. No launderer would hesitate to pay even a hundred millions or more, to steal a billion. What Central Banks do all over the world is to establish thresholds of bank cash movements for the purpose of instant tracking.
Our large cash movement is not responsible for the spiralling inflation in our economy. Inflation is largely imported due to our irrational and unrealistic exchange rate of 156 or more naira to the dollar. It is the dollar that determines the value of local products and services. Every one is calculating prices by it, traders, contractors, prostitutes, since the government trades with it and values it more than the naira, thanks to the IMF and the World Bank. If we maintain the correct exchange rate of ten naira to the dollar, we would have less volume of naira chasing after a dollar's worth of business or services. A book that costs $30 in the USA should not cost more than N300 in Nigeria, but our bad economic policies force us to pay the equivalent of the average Nigerian worker's monthly salary for the book. Two days wage, (which is a few seconds' wage in the USA) can only buy two jerricans of garri or two ripe plantains. How can that be value for labour and for exchanging the naira? No one can feed him or her self and family on that. Not all of us have jobs either, so, two days work for a lousy meal a day per person, is sending all of us to our early graves.
Auctioning our reserves to the highest bidder weekly, another of Sanusi's inherited obsessions is not the answer to the proper management of the exchange rate too. It simply means selling our dwindling natural bequest to increase available loot quantum for rogues in leadership, and it exposes the naira to the most dangerous form of speculation in an economy where everything, including toothpicks, water and even European excrement as fertilizer are being imported because theirs is superior to ours.
The Governor of the Central Bank has some elementary and cheap ways of contributing to the reduction of the cost of managing cash movement. He recently printed plastic rather than paper cash for the lower denominations of the naira. It is not popular because it does not fold easily, in a society where large cash amounts have to be carried about in pockets of attires, but the Central bank cannot be faulted because it saves wear and tear currency costs.
Soludo, the previous Central Bank Governor, came up with the laudable idea of moving our exchange rate of a hundred naira to the dollar then, one decimal point to the left of the rate, at the early stages of Yar'Adua's regime, but all hell was let loose because the president said he was not carried along. Ghana moved their exchange rate decimal point, three steps to the left without qualms, and it has reduced the cost of managing large cash movements in Ghana. The alternative to such decimal point movement of the exchange rate is not the limitation of customers' cash withdrawals from money banks. Surprisingly, Sanusi himself knows this because he said at a meeting with the Senate Committee on Finance on 27 May, 2011, that his intention is to bring to their knees, our economically most successful 10% dealing in large cash amounts. First of all, it is daft to claim that withdrawal of over N150k daily is limited to ten percent depositors. It cuts across all strata of depositors ten percent of the time. It is time sensitive, but Sanusi is targeting the middle class.
Sanusi, rather than grow 90% catch-up, wants to retard and pauperize our most progressive and promising. A satanic and backward geo-political agenda to regiment, cage and destroy, the struggling youthful generation, creating a fledgling Nigerian middle class on their own steam from the ashes of Babangida's structural adjustment disaster. Can Sanusi use N150k to cut a music video or shoot a movie in the savage jungle of our cruel work space that lacks all basic survival amenities? The middle class is the engine room of any society. They are the innovators, inventors, risk takers, investors and entrepreneurs. Without the middle class, no society can grow.
Babangida, with the help of the IMF, killed our middle class in his time. Now Sanusi, with the help of the World Bank, wants to snuff life out of our fledgling middle class. Why is the World Bank not restricting cash withdrawals and deposits in their advanced economies? Why do they leave the choice of what options to use, to the customers in Europe and the USA? Cash withdrawals and lodgements in Nigeria like in Europe must be allowed to operate unhindered by restrictions, limitations and penalties, side by side with e-payments. Banks could use mouth watering incentives, good corporate governance and practices to develop e-payments' dominance in our economy. Banks must not be allowed immunity from prosecution on cash transactions or e-payments' losses, if they are to win customers' confidence.
Judging by his continued insistence on being right, Sanusi may already be loosing his marble. President Jonathan would have to engage his Central Bank guru who is now less than a financial guru, in serious talks soon. In the mean time, the Senate has a responsibility to call the president and his Sanusi to order, failing which Nigerians should go to the courts to stop Sanusi's madness because no body can stop me from or penalise me for closing my bank account any time or day I choose, regardless of the amount involved.
NAIWU OSAHON Hon. Khu Mkuu (Leader) World Pan-African Movement); Ameer Spiritual (Spiritual Prince) of the African race; MSc. (Salford); Dip.M.S; G.I.P.M; Dip.I.A (Liv.); D. Inst. M; G. Inst. M; G.I.W.M; A.M.N.I.M. Poet, Author of the magnum opus: 'The end of knowledge'. One of the world's leading authors of children's books; Awarded; key to the city of Memphis, Tennessee, USA; Honourary Councilmanship, Memphis City Council; Honourary Citizenship, County of Shelby; Honourary Commissionership, County of Shelby, Tennessee; and a silver shield trophy by Morehouse College, USA, for activities to unite and uplift the African race.
Naiwu Osahon: Sage of the New World Order, renowned author, philosopher of science, mystique, leader of the world Pan-African Movement.