It is time the banking and financial regulators come clean about the current state of Nigerian banks. According to the Nigerian media, a report done by audit firm, PricewaterhouseCoopers (PWC), for the Ministry of Finance indicated that some Nigerian banks might not be as healthy as portrayed by the CBN and the NDIC. PWC in a statement on the global financial crisis and implications for Nigeria said some of the banks have already signalled interest for government intervention in their operational activities. It was noted that “in spite of positive financial statements, some of them have called for the intervention of, or part takeover by the government”. Some commentators have reported that banks are struggling with non-performing facilities in excess N300 billion or N400 billion.
In the last few months, since the evolution of the tsunami that swept across the world economy, we have witnessed allegation and counter-allegation among the nation’s finance and economic managers about the state of the Nigerian banks. Just about three months ago, Prof. Soludo, the CBN Governor came out authoritatively to say that the Nigerian banking system is immune from the current global economic crisis because of the banking consolidation policy. While I have so much regard for Prof. Soludo, I did say at that time that he was talking absolute ‘nonsense’! Just to put things in perspective, since Prof. Soludo’s comments, the nation’s foreign has depleted by about $5billion, oil prices has continued to fall, and the naira has been on a steady slide against the dollar.
It is common knowledge that the health of the commercial banks has been under the spot light since last year, but the CBN and the NDIC had repeatedly given them a clean bill. I also recall that a commissioner at Securities &Exchange Commission (SEC), Mr. Charles Udora, heightened the suspicion when he disclosed a few weeks ago that the meltdown in the capital market was partly caused by the banks. Udora said that the banks sank more than N388 billion loan into the capital market, most of which had not been recovered. Also, an international news media, Bloomberg reported that Nigeria’s benchmark stock index, was the world’s worst-performing equity gauge in dollar terms so far this year. The Nigeria Stock Exchange’s All Share Index as at February lost almost 64% from its 2008 level.
So who is telling the truth? Some economic experts might argue that the state of the stock market is not a true reflection of a nation’s economy. A typical example is the US economy. The US economy was reported to have been in recession 18 months ago, however, the stock exchange was recording phenomenal increase in value. While the US stock market is very much diversified, the situation in Nigeria is very different. Majority (approx 60%) of the shares being traded on the Nigeria stock exchange are bank shares.
As a nation, we can either face up to the reality of the global crisis, or bury our head in the sand and pretend it is business as usual. However, in the interest of the Joe Public it is important now than ever before, that there is strong cooperation between the nation’s financial and banking regulatory authorities in dealing with this economic crisis. The average Nigerian is not interested in the current bickering. The govt should understand that conflicting reports about the state of the nation’s banks does not in anyway help investor confidence.
Friday, February 27, 2009
Tuesday, February 10, 2009
Re-branding Image Nigeria
The Minister of Information, Prof. Dora Akunyili recently said that the Federal Government has abandoned the Heart of Africa project. The Minister noted that government took the decision because the project was ‘failure’.
As some might be aware, the Heart of Africa was an image laundering project conceived by the administration of former President Olusegun Obasanjo to give the nation a better perception at home and abroad.
In her words she noted that “Heart of Africa was first launched overseas and that automatically disconnected the ordinary Nigerian from this project, making it look elitist. We, therefore, decided to embark on a new branding project that will be home grown”.
It is not surprising that the project was a failure. During the Obasanjo regime, I remember seeing posters aimed at painting Nigeria in a good light, all over the streets of London. There was a huge scepticism about the project as it failed to address the fundamental problems in the country but instead only lined the pockets of government employed spin doctors. Foreign public relations experts and govt officials led by the Former Minister Frank Nweke, embarked on jamboree trips overseas all in the name of ‘spin’.
Having said all that the most unfortunate thing is that we still haven’t learnt our lesson, as this govt also wants to embark on the same fruitless journey. It is common knowledge that Nigeria’s image overseas is as bad as it can get. In fact, I tell people that people back home need to travel overseas to appreciate how Nigeria’s image has been badly dented over the years. I know people who hold dual nationality and will never travel on a Nigerian passport. I have met genuine Nigerian businessmen living overseas, who are struggling because no one will engage with them in any transaction because they are Nigerians.
While I agree that Nigeria’s image needs to be‘re-branded’ at some stage, I do think at this point, it is like putting the cart before the horse. The govt should be focussing on developing the nation’s economy and putting in development fundamentals.
It saddened my heart when I read Prof. Akunyili’s comments that ”……re-branding Nigeria was more critical than any physical infrastructure because it would address the fundamental issue of how the country and its citizenry were perceived and treated”. Does it really matter how the western world perceives us, if we have a vibrant economy? In the 1970’s, when the nation economy was good, Nigerians were treated like kings on the streets of London , because the ‘oyinbo’ man knew we had money in our pockets. My question then is, did we embark on image laundering then?
The point is, if you make yourself relevant in the globalised economy, perception is a non issue. And I will note that China is a typical example. Despite all the allegations of human right abuse in China, the western world recognises China’s place in the global economy.
May be someone needs to advise Prof. Akunyili that the nation is bigger than NAFDAC. It is not just about running enlightenment campaigns on fake drugs. I believe all her hard work in NAFDAC would have been eroded if all she did was raising awareness about fake drugs without actually dealing with the root cause (ie. manufacturers/importers).
Unless the govt lives up to its social and economic responsibility by creating jobs, providing infrastructure, improving security of lives etc, image laundering is a waste of time. As they say “you can put lipstick on a pig, but it’s still a pig”.
As some might be aware, the Heart of Africa was an image laundering project conceived by the administration of former President Olusegun Obasanjo to give the nation a better perception at home and abroad.
In her words she noted that “Heart of Africa was first launched overseas and that automatically disconnected the ordinary Nigerian from this project, making it look elitist. We, therefore, decided to embark on a new branding project that will be home grown”.
It is not surprising that the project was a failure. During the Obasanjo regime, I remember seeing posters aimed at painting Nigeria in a good light, all over the streets of London. There was a huge scepticism about the project as it failed to address the fundamental problems in the country but instead only lined the pockets of government employed spin doctors. Foreign public relations experts and govt officials led by the Former Minister Frank Nweke, embarked on jamboree trips overseas all in the name of ‘spin’.
Having said all that the most unfortunate thing is that we still haven’t learnt our lesson, as this govt also wants to embark on the same fruitless journey. It is common knowledge that Nigeria’s image overseas is as bad as it can get. In fact, I tell people that people back home need to travel overseas to appreciate how Nigeria’s image has been badly dented over the years. I know people who hold dual nationality and will never travel on a Nigerian passport. I have met genuine Nigerian businessmen living overseas, who are struggling because no one will engage with them in any transaction because they are Nigerians.
While I agree that Nigeria’s image needs to be‘re-branded’ at some stage, I do think at this point, it is like putting the cart before the horse. The govt should be focussing on developing the nation’s economy and putting in development fundamentals.
It saddened my heart when I read Prof. Akunyili’s comments that ”……re-branding Nigeria was more critical than any physical infrastructure because it would address the fundamental issue of how the country and its citizenry were perceived and treated”. Does it really matter how the western world perceives us, if we have a vibrant economy? In the 1970’s, when the nation economy was good, Nigerians were treated like kings on the streets of London , because the ‘oyinbo’ man knew we had money in our pockets. My question then is, did we embark on image laundering then?
The point is, if you make yourself relevant in the globalised economy, perception is a non issue. And I will note that China is a typical example. Despite all the allegations of human right abuse in China, the western world recognises China’s place in the global economy.
May be someone needs to advise Prof. Akunyili that the nation is bigger than NAFDAC. It is not just about running enlightenment campaigns on fake drugs. I believe all her hard work in NAFDAC would have been eroded if all she did was raising awareness about fake drugs without actually dealing with the root cause (ie. manufacturers/importers).
Unless the govt lives up to its social and economic responsibility by creating jobs, providing infrastructure, improving security of lives etc, image laundering is a waste of time. As they say “you can put lipstick on a pig, but it’s still a pig”.
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