Nigeria: Central Bank governor faces harsh criticism after bank crackdown

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Nigerian Central Bank governor has defended his largely criticized banking reforms that shook the country’s monetary sector and claimed the jobs of five bank bosses, stating it was an effort to put the Nigerian banking system on the world stage. Mr. Lamido Sanusi whose campaign against fraud and financial misconduct in Nigeria’s banking system recently hit international headlines is facing some harsh criticisms from the country’s financial elite.

“If you want to take action and action is decisive and far-reaching, you have got to do it in a manner that has the highest chance of success. When the rest of the world recovers and the investors have money to put in, they’re going to go to Ghana, they’re going to go to Angola, they’re going to go to South Africa, and to Egypt. Not because those countries have greater opportunities but because people don’t trust the Nigerian system. And it’s important that we rebuild that trust if we want to be a player on the global stage,” Sanusi is quoted as saying.

Since Sanusi’s appointment he has sacked five major banking executives and pumped more than 400bn naira ($2.6bn) into failing financial institutions. According to Sanusi, the answer to saving Nigeria’s banks was to rebuild trust in its economy. He urged those in petroleum and the Ministry of Justice, to take responsibility for their section of the country and clean up the system.

Economic experts have said Mr. Sanusi’s reforms might result in some of the banks having to merge or bring about the emergence of new banks in the sector.

According to a press statement released by the central Bank of Nigeria, the governor and the managing directors of the five affected banks travelled to London to explain the actions of the CBN to foreign investors and correspondent banks that advance credit lines to Nigerian banks; and reassure them of the safety and soundness of all the Nigerian banking institutions.

CBN also stressed that Mr. Sanusi’s participation at the World Economic Forum in China in January and Febrauary, had nothing to do with the search for foreign investors in any of the Nigerian banks as was insinuated in certain quarters. “The concern of the CBN for now is to continue to ensure that the Nigerian banks remain safe and sound,” the CBN statement read.

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