IS SANUSI SOWING THE STORM?
It was not raining, or was it, when Noah was forewarned to build the ark. It's because history teaches an important lesson, that often, tragedies are preceded by foreboding signs. An idea that can split the country down the middle, is part of the red flag warning us to slow down with the implementation of the idea.
This, of course, may not be the original idea behind the plan for an Islamic banking model. It's only that the initiators of the idea may be hell-bent, and indeed, crotchety and disrespectful to public opinion.
The unpleasant implications of unheeded advice are as risky to the economy as they could be bad for the political system itself. Any solution should therefore be comprehensive, systemic and must accommodate the fear factor capable of fanning the embers of hatred along religious lines.
In the last couple of weeks, and still counting, few issues (perhaps apart from Boko Haram) have generated such a convoluted debate as the proposal for the introduction of Islamic banking in the country. The idea is the brain-child of the Governor of Central Bank of Nigeria (CBN), Mr. Lamido Sanusi. A zealot of Islamic or non-interest banking, having studied that model in Sudan as part of his graduate studies. Sanusi, has from the very moment he was appointed the CBN Governor in 2009 never hidden his love for sharia banking in Nigeria. Now it seems he has his wish fulfilled.
Until now, Islamic banking was alien to the conventional banking system which has been in operations as long as Lord Lugard era in Nigeria. With its peculiar rules and regulations based on Islamic law of economics which forbids financial speculations and other risk-takings that characterize conventional banking, it's a system that will definitely appeal to many, especially among die-hard Muslims, and perhaps even atheists. And considering the bone-chilling high interest rates charged by conventional banking, that may not be a bad idea for many to embrace it.
But, alas, the proposal for which CBN has already licensed at least two banks, Jaiz Bank International plc and Stanbic IBTC, to kick-off the controversial system, one may begin to ask: why is it attracting such painful and hot debate? Why is the alarm bells ringing despite the obvious advantages the initiators have told us? First is the man whose sleight-of-hand it is - Lamido Sanusi. Arguably, the CBN Governor has come to cherish controversy. In the last two years that he has been at the helm, he has become, in a manner of speaking, like a doughnut. Imagine a doughnut without a hole.
Sanusi rarely avoids gaffes these days. He is also given to committing fatal howlers. Slips seem to have become second nature to him. Sometimes, he comes perilously close to losing his temper. Bankers who claim to know him well allege that he suffers from the 'Smartest-kid-in-the-class syndrome' This is an overweening pride of 'I can-do-no-wrong'. His alleged brusque management style, particularly since he humiliated some bank chiefs two years ago, also tends to portray him as always playing the intellectual provocateur that looks disrespectful to many bank executives. In that case, such critics see Sanusi as wrapping his own personal agenda. And Islamic pursuing is one of them.
Many Christian clergies are already painting him with such evil brush and the model as a grave error. For such critics, Islamic banking is an 'evil proposal' from an Islamic zealot.
All of these pejorative descriptions cannot be what Sanusi stands for, or what his plans are for the banking sector. He has dazzled in many areas with some of the reforms he has put in place in the industry. It is fair to say that confidence which is the cutting edge in the banking industry is beginning to come back. It is only an incurable critic with a disfiguring jealousy that will not acknowledge some of his achievements in two years. However, sometimes, you may blow an innocent kiss and get punished for it. Frankly, there is need for reforms in the banking sector, and perhaps an alternative banking model for customers to choose from. But, people want it to be orderly, painless, not one that is a product of confusion. And that is how many people see Islamic banking right now.
Nigeria needs a banking model that can take us beyond blind, divisive optimism, to well-founded hope. Confusion can sometimes precede sad endings, no matter the good intentions. Sanusi is already sounding tough. He has challenged critics of Islamic banking to go to court, insisting that only the courts can stop him. Even at that, he has boasted that no court in the land will torpedo the plan. A firm conviction is what Sanusi has in excess, and that is a good leadership quality. But without a tactical flexibility, a good plan scarcely succeeds. And that Sanusi has shown time and time again of lacking. That of course can scare the bejesus out of many people. That's dangerous for a sector like the bank that holds the oxygen of the economy.
When President Jonathan shunned the parley organized by the CBN last week in Abuja to promote the Islamic banking, and sent no representatives (and the Permanent Secretary, Ministry of Finance, Mr. Daniel Kifasi) flatly denied representing the president, it is essentially because of the furore trailing it.
Since one man's pain is sometimes another man's pleasure; it's safe to say that those who are opposed to Islamic banking in Nigeria and those behind its introduction have their reasons. However, it's safe to say that nobody knows, not even Sanusi himself, how far reaching this step he has taken will go in the sector, if it is allowed to run its full course. It could amount to sowing the storm, an ill wind fraught with unpleasant consequences.
That in turn, could mean problem not solved. Panic will persist. And to douse these frenetic feelings that still trails the emergence of Islamic banking, grandstanding is not the option. Clearly, the initiators of Islamic banking did not do enough to educate the Nigerian public on this model of banking. CBN is yet to give us firm assurances that will calm some of these worries.
Instead, Sanusi is joining issues with the critics of this brand of banking. Perhaps the biggest worry hanging over the establishment of Islamic bank is the deep-seated fear in some quarters is the likelihood of the bank been used as a conduit for illegal transfer of funds for terrorist activities. This fear should not be dismissed, especially at this critical time that religious fundamentalists are unleashing attacks in some Northern states of the country. For example, Boko Haram.
The CBN under Sanusi should tread softly, softly. One reform at a time rather than too many controversial plans at a time. When you deprive a critical sector like the bank, of confidence, you deprive the economy of trust, and when that happens, other crises kick in. That brings collateral damage beyond the economic sphere, down to the political front. All of this teaches one lesson: no controversial plan should be allowed to defeat the lofty objectives behind the philosophy of banking and bank management. Saving the system is far more important than one's personal agenda. Some insist that the CBN Governor has already overreached himself on very crucial plans that are required to move the economy forward. It is not too late to tack back to the right path.