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Lawson Omokhodion: Between Reality and Imagination By Abdul Isa
As an ardent follower of developments in the financial sector, especially the banking industry, I cannot afford not to read the back page comment of Thisday newspaper of Tuesday, January 22, 2007 edition authored by Mr. Lawson Omokhodion. But somewhere along the line I was utterly disappointed by the sentiments being churned by Mr. Omokhodion to his readers, whom he probably thought were gullible and might not be able to read in between the lines.
Though I am neither holding briefs for the operators or the regulators of the banking industry, but as a stakeholder, I feel obliged to put the record straight for the public, especially those who believe in the strength and capacity of the banking industry to launch Nigeria competitively into the 2020 race.
In the said article, the writer portrayed the entire consolidation exercise as wasteful venture which brought no good to any one except sorrow in terms of huge financial and job loss, ever increasing high interest rate, unfulfilled promises and more specifically, the failure of Alliance Bank group to emerge on Nigeria’s financial landscape.
Indeed, Mr. Omokhodion alluded to the fact that banking consolidation exercise “was to create a stronger, safer and swifter banking industry” which to him, was far from being achieved. Then one begins to wonder whether Omokhodion is still inhabitant of this planet if the tremendous growth and various feats being recorded in the banking industry are still unnoticeable to him and others like him.
The facts and figures are there for all to see that the banking sector commands the leadership position at the Nigeria Stock Exchange since 2004. The industry has come of age such that its expansion is no longer policy induced but self induced. At least six Nigerian banks have surpassed =N=100 billion in shareholders funds by June 2007. It could be recalled that when the consolidation policy was announced in 2004 only one bank had the more =N=25 billion in shareholders fund but today, the shareholders fund of the biggest bank in Nigeria is more than the shareholders fund of all the 89 banks put together prior to consolidation. As at last count, the shareholders funds in the entire industry amounted to over =N=1.0 trillion as against =N=292 billion in 2004 and with total market capitalization for the sector put at =N=6.0 trillion as at December 2007.
In terms of employment and branch network, all the erstwhile 89 banks had 3274 branches nationwide as at December 2004 and by December 2007, the branch network had risen to 4579 which translates to about 40% increment. Wouldn’t this have translated to more jobs rather job loses?
What else, 16 banks are now ranked among top 1,000 in the world and there was none in 2003. Also five out of top 10 banks in Africa are in Nigeria just as the banks now have the confidence to voluntarily submit themselves for professional rating by renowned rating agencies of Fitch and Standard and Poor.
More so, big ticket assets are now being created by our banks as such, project which hitherto required consortium of banks to finance are now being undertaken by a single bank such that timely consummation and execution of projects are now guaranteed. Testimonies abound in this regard. The contributions of the banks towards the successful completion of meaga projects like Tinapa and the Terminal Building of the Murtala Muhammed Airport, Lagos are good examples.
Nigerian banks now operate outside the shores of the country both in West Africa sub-region and Europe and some now have their stocks listed in the prestigious London Stock Exchange in addition to Dollar dominated private placements.
Furthermore, e-banking products and facilities ranging from funds transfer to Automated Teller Machine (ATM) are fast becoming the vogue courtesy of size, strength, improved services and competitiveness which have become the hallmark of present day banking in Nigeria.
These feats are being acclaimed world wide. Financial Times of London has described Nigeria banks as the fastest growing in Africa just as some of our banks have winning Awards for excellence from reputable organizations both at home and abroad.
On the issue of subduing the interest rates to about 10%, the writer acknowledged the exogenous factors such as lack of basic infrastructures which militates against the attainment of such lofty goal in the short term. Nevertheless, there indications pointing to the fact that it is attainable in no distant future with sustainability of the on-going reforms.
Perhaps Omokhodion is still basking in euphoria of classified or categorization of banks into small, medium and large in term of capital base and area of operation. The earlier he comes to term with fact given the present banking environment in Nigeria, small bank of whatever nature cannot thrive, the better for him.
The grouse expressed by Omokhodion over the inability of the former staff of the failed banks to access facilities under SMEEIS is baseless as he ought to know more about the source of the fund and the disbursement processes. As at December 2007, the sum of =N=21.14 billion had been disbursed for 302 projects nationwide leaving the balance of =N=16.3 billion.
Mr. Omokhodion tried in certain instances, to be honest with himself but strayed agin when he ventured into the murkt issue of proposed Alliance Bank especially when he compared the prospects of Alliance Bank to ABSA of South Africa. The alliance was not only that of strange bed fellows but also of half clever wiz kids. There was no way alliance bank could have emerged with a negative shareholders fund of =N=52 billion hanging on the neck of the promoters. I wonder how they could have off-set that in addition to raising fresh =N=25 billion being the minimum capital requirement for a new banking licence within two week having earlier reneged for more than eight weeks.
It was obvious that those at the Central Bank of Nigeria shut its consolidation doors to the alliance group when it was realized that the group was only buying time to perfect their unwholesome strategies to arm twist CBN for undeserved banking licence.
My candid advice to Omokhodion and his co-travelers is to learn to appreciate and where necessary, celebrate the hard working people in our midst. May be he would have appreciated the success of the consolidation more if the exercise was muted and executed by expatriates. |