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Banks And Money Laundering By Les Leba
For the majority of Nigerians who now live on less than $1 a day, banks are those architectural masterpieces which dwarf other less elegant and sometimes conservative and decrepit structures on major highroads all over the country. A visit to a bank is as auspicious, intimidating and unlikely as a stop over for lunch in Aso Rock by any one from the critical mass of impoverished Nigerians.
Banks are seen as where ‘rich people’ keep their money and the majority of our countrymen would feel uncomfortably out of place, as fish out of water, in the ‘arctic chilled’ ambience with the searching human and electronic eyes of most banking halls.
However, for a small subsection of Nigerians with an average annual income
of about
Meanwhile, the underlying prerequisite for investment growth in any economy is the availability of savings; without a surplus for savings from income earners, bank lending to investors will be highly constrained, and employment possibilities will become endangered.
In the event that the Banking, Telecom and Oil industries employ a very small percentage of our labour force, it is clear that the banks cannot depend on this small catchment for their impressive profitability in recent years! An associate of mine, with over thirty years professional accounting experience insists that the actual target segment for savings is the small but powerful club of public treasury looters! He maintains that only this group of ‘celebrated’ Nigerians have huge surplus funds, consequently ‘mini’ clad damsels with extra curricula skills and qualifications have become favoured bank employees to divert the course of the looted funds from Ghana must go bags into the safe havens of bank vaults! The impact of such a banking strategy on the moral fibre of our women folk has been the subject of national debate and recently, no less a body than the National Assembly has been rightly worried by this trend.
Apart from the rabid appetite for young female flesh, the critical demand of treasury looters is of course confidentiality and the ability of the recipient banks to repackage the bloated loot to give it the air of a legitimate cash lodgment; the rate of interest paid by the bank on such deposits is generally not a critical factor for the unlikely noveau riche. It also makes no difference that the bank will turn round and offer the same funds to desperate investors at over 5 times the rate paid to these custodians of stolen funds.
I am not a legal expert, but I know that universally, criminal law recognizes that the receiver of stolen goods (knowingly or unknowingly) is as guilty as the actual thief! Alas! Inspite of the public awareness that banks have remained veritable fences for looted public funds, our Central Bank’s sanctions have never been more than a mere slap on the wrist for a handful of indicted errant banks! In this event, it is unlikely that Nigerian banks would ever be weaned of the appetite for criminal financial collaboration against the rest of us.
The banking consolidation was feted as the hope bearer for better banking services and the potential engine for the growth of the economy, particularly the small and medium industrial sub sector. However, over a year after the completion of the exercise, most of the corresponding positive expectations remain unfulfilled; banking halls continue to witness long unending queues of customers, simple cash withdrawals can still take hours to transact; the consolidation exercise has also reduced the disposable income in the system with serious consequences for consumer industries and general employment. The consolidation exercise inevitably led to staff rationalization and very many otherwise secure Nigerians suddenly lost their jobs without adequate preparation for alternative gainful employment. Meanwhile, the jumbo salary packages of bank employees have created a serious fracture in the national wage structure, such that a driver in a bank would receive a bigger salary than a graduate medical doctor in any of our government hospitals! Banking remains the prime destination for almost every job seeker inspite of the increasing rate of fraud in the system.
The Guardian Newspapers on page 6 of the edition of Friday 28/12/2007 carried a report titled “EFCC fingers 10 banks in looting by Ex Governors”. The report noted that.. “Not less than 10 banks have been linked with illegal transfer of public funds abroad by some former Governors under investigation or trial by the EFCC”
The Guardian report added that “most of the huge funds being recovered by the EFCC from the former State Executives were transferred out of the country through some officials of the banks”. Incidentally, these nefarious activities of our wonder banks were not brought to the attention of the EFCC by the traditional watchdog of the banking system, i.e. the Central Bank of Nigeria, inspite of its self adulation of excellent banking supervision, audit and control! Indeed the Guardian report under reference indicated that “the EFCC unearthed the various roles played by the banks in the course of quizzing the former Governors”. Nigerians have been led to look elsewhere all along by the CBN as if the miscreant Governors and other treasury looters had carted their loot to Mallams in Martins Street for changing to Dollars before stuffing the Dollar loads into bags and suitcases and physically smuggling their booty through any of our porous borders! Na lie!
The banks were the main conduits for treasury looters and they continue to play this role as you read this article! As you can imagine, billions of Naira will be readily provided by the cabal to defend this criminality and Nigerians should not be surprised at the legal jargons, technicalities and illogical summersaults in the coming months to throw the EFCC off the tracks of those wild hounds who are resolved to have the rest of us for regular dinner!
The EFCC should be encouraged by civil society and the National Assembly to also investigate the apparently incestuous relationship between the CBN and the commercial banks. The CBN should explain why it has dished out over $8bn to these commercial banks at concessionary rates, while we seek foreign loans at cut throat rates! or why the same CBN and the Debt Management Office continue to borrow money at expensive rates when we have huge idle cash surplus.
The EFCC should also investigate the involvement of members of the government’s economic policy team and determine their involvement in the ownership of bank equity after the consolidation exercise. Some critics maintain that only the hope of personal gain could make these public officers not only to consciously featherbed the banks through government policy but also turn blind eyes to the current criminality in our banking system. In responsible societies, the crime of insider trading has earned many erstwhile illustrious entrepreneurs long term jail sentences.
SAVE THE NAIRA! SAVE NIGERIA! |