SANUSI LAMIDO SANUSI IS “NIGERIANS REPORT” MAN OF THE YEAR 2009

“NIGERIANS REPORT” MAN OF THE YEAR 2009

Sanusi Lamido Sanusi: A ‘sanitary officer’ to bank on for cleansing the stench in our banking stables

Sanusi Lamido Sanusi, 48, has a strong mind. And he’s not afraid to open it up, especially to the clamourous clan of conspiracy theorists who rose up at the mention of his name, wielding prickly pens. But he has the last word on their tango: “Journalists and writers must respect the intelligence of their readers and understand that we read columns to be educated and not misled.” Fair enough. The naysayers have since realized they have a match in him.

At his inquisition-style confirmation hearing before the Senate for his suitability for the post of head of the Central Bank of Nigeria., CBN, SLS (it’s a close homonym of ‘excellence’), as he’s fondly called by friends and foes alike, took a swipe at the president’s hackneyed mantra of state of “7-point Agenda”; it is as effective, he surmised, as chasing after many rabbits. It was June 3, 2009; the apex legislative house would clear him to take up his presidential appointment.

And it was all in a day’s work for the lugubrious Big Man’s spokesperson who came out, nostrils flaring, with a retort to SLS. SLS would show he cared even less whose wrists were bloodied in the wake of the ‘bank-quake’ he set off on a very historic 14th day of August, 2009, which saw hitherto sacred cow topnotch bank executives booked for gross misconduct. That first wave swept away CEOs of one-fifth the Augean banking stables. He has sacked the president’s personal banker in the second wave of his decisive action taken to safeguard the financial sector from systemic collapse.

With a Bachelor of Science degree in Economics from the prestigious Ahmadu Bello University (ABU), Zaria, SLS first took up university teaching before going on to become Group Managing Director/Chief Executive Officer of First Bank Plc, Nigeria's oldest bank and one of the biggest financial institutions in Africa. He was first Executive Director, Risk & Management Control, part of what commended for his latest assignment.

In Greek mythology, King Augeas’s stables had not been cleaned in 3 decades. Heracles got the unenviable task of cleaning them all in one day. He achieved the Herculean task by diverting two rivers through them. (Hercules is the Roman equivalent of the same sanitiser fellow.)

‘Augean’ is now an adjective for filthy fair, a dirty situation extremely difficult and unpleasant to handle--unless you possess know-how and are willing to use it to the best of your judgment. A second requirement is a tough skin.
Underneath the perfumed stench in the sector was a funny odour carried over from predecessor governor Charles Soludo’s consolidation drive; it had long been suspected that rot was rife in the sector.

More change would come to define things and the pace of things in the crucial sector. His call on the rarefied chambers of banking dons has now left many mantel place showpieces toppled, swept off their high horses. As the Yoruba of the Nigeria’s South-West say: The wind has ruffled feathers, now we can see the rump of the fowl.

Although Sanusi’s forebears are Fulani aristocrats from the North of the country, he’s never been far from Nigeria’s erstwhile federal and continuous financial capital. It was where he had his secondary education, at the elite yet egalitarian King's College, Lagos.

In a country where cleavages of religious and ethnic derivation always set pulses racing, his announcement that the Islamic banking model already ratified by his predecessor was ready for takeoff set off alarms. A highly conscientious Muslim, SLS uncharacteristically didn’t panic into a retreat on account of the seeming ‘conflict of interests’. He maintains his austere profile courageously as a ramrod posture under the fiery flurry of accusations of a ‘Northern agenda’ to take over banking in the country.

He’s made crystal clear the “need to strengthen” the regime of “consolidated supervision.” “It’s a learning point for regulators”; there’s “obviously…the need for risk-based supervision. If we have a risk-based supervision framework in place, anybody looking at the discount window would have been put on alert that there was the need to check certain things relating to certain banks, especially given the fact that the liquidity stresses came at the time of the global [economic] meltdown.
“And we know that [this] has affected Nigeria through two key channels—the oil price channel and the Foreign Direct Investment, FDI, outflow channel—which led to the crash in the stock market. Now, it would have been very clear that the problems of the banks were related to their exposure to the capital market and the oil market.”

We get the point now. Now the system is being set right side up. SLS burst onto the scene quietly not to rattle ‘the system’; he came to bell the very big cats in it. Married with children, SLS is widely published in many academic journals, books and newspapers in many lands.


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24 Million Nigerians Ignored and Neglected By Nigerian Banks

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24 Million Nigerians Ignored and Neglected By Nigerian Banks

24 million people in Nigeria have been ignored and neglected by Nigerian banks according to the latest 2009 HSBC Global Report. These millions of people who are not yet included in the banked population can boost the growth of Nigerian banks in spite of the adverse effects of the global economic meltdown.

“The potential for growth among Nigerian banks is sizeable and largely untapped as studies indicated that up to 24 million people have yet to be included in the banked population, which given both the country’s demographics and income dynamics, leaves the banks with considerable potential to capture new customers.”
~ HSBC Global Report on Nigerian Banks, June 2009.





CLICK HERE TO SEE THE TRIBUTE TO MICHAEL JACKSON AND POST YOUR CONDOLENCES

She is Not the Only One in Nigeria

She Came in the Stormy Weather.

It was a stormy morning in Lagos as the fuel scarcity worsened and going about your business of survival was now more hectic in these interesting times in Nigeria.
Then she walked into my office as the stormy wind blew in the looming torrential rain.
She told me she was depressed and broke down in tears.
I put my right arm around her shoulders and gave her my white handkerchief to wipe her tears away and I also used my fingers to wipe her teardrops before they trickled to her rosy cheeks. Then she unburdened her heart and soul to me.
She was in dire need of money and work.
She was tired of waking up every day and having no job. She wished she could be like many of her mates who are gainfully employed.
“I feel useless,” she lamented.
“You are not useless. You can never be useless,” I said as I comforted her.
We spoke at length and she was soon relieved as she could now smile and even shared jokes with me about romance on Facebook.
“Guys are even picking up girls on Facebook,” she said.
She mentioned one of my pals who picked up two Nigerian babes on Facebook and laid them within a month.
Wow! So they could come so cheap and stupid on Facebook. But I quickly dropped the subject and focused on her overcoming the blues of her depression and unemployment.
Well, she is not the only girl or woman who is feeling depressed these days.
These are not the best of times for single girls and women who are jobless in Nigeria.
The meltdown of the Nigerian capital market made many banks and other companies to lose billions of naira and they are no longer employing more applicants as they would have loved to and in fact some leading banks may retrench their workers soon.
Many people lost millions of naira and they took loans to invest in the capital market and are desperate to find money to pay back the loans.
Many guys are presently in financial mess and they cannot provide for their babes again. There is no romance without finance. The reality sucks.
So many of the affected babes are depressed if they are not employed to provide for themselves.
“I don’t want to rely on any man for my needs. I want to work,” she said.
Many girls and women use their wits to play many guys to provide for their needs, but the consequences could be destructive in the end. So, I was glad she asked for assistance in getting a good job.

Invest in America--Before it's Too Late

In the March 23 issue of Newsweek (on newsstands Monday, March 16): "I Want You to Start Spending!" Daniel Gross writes about how we, as consumers, need to start taking risks again in the economy and start spending to help the recovery. Plus: Mexican drug cartel violence spreads north of the U.S. border; investigating Americans' Swiss bank accounts; the decline of Iraq's Kurdistan; how to choose the right procedure for an ailing heart and Prince's big online bet. (PRNewsFoto/Newsweek) NEW YORK, NY UNITED STATES 03/15/2009

15 Mar 2009 16:56 Africa/Lagos


NEWSWEEK Cover: I Want You to Start Spending!

Invest in America--Before it's Too Late

We've All Lost The Taste For Risk; For Our Economy To Recover and Thrive, 'Hoarders must open our wallets and become consumers, and businesses must once again be willing to roll the dice,' writes Daniel Gross

'We've gone from age of entitlement to age of thrift,' says PIMCO CEO

NEW YORK, March 15 /PRNewswire/ -- With the economy in its 16th month of recession and the markets cut in half, it seems we've all lost the taste for risk, writes Newsweek Senior Editor Daniel Gross in the current issue. "In the grip of a bubble mentality, we -- as investors, consumers and businesses -- blithely assumed risk and convinced ourselves it was perfectly safe to do so," he writes. But now, "the zeitgeist has spun 180 degrees. Squeeze your nickels, slash debt, stop gambling," Gross writes in the March 23 Newsweek cover, "I Want You to Start Spending!" (on newsstands Monday, March 16). "For our $14 trillion economy to recover and thrive, hoarders must open their wallets and become consumers, and businesses must once again be willing to roll the dice."


(Photo: http://www.newscom.com/cgi-bin/prnh/20090315/NYSU004 )


In his essay, Gross explains how not spending anything now could mean bigger problems in the future. The rush to hoard cash and pinch pennies is understandable, given that some $13 trillion in net worth evaporated between mid-2007 and the end of 2008, Gross writes. "But while it makes complete microeconomic sense for families and individual businesses, the spending freeze and collective shunning of nonguaranteed investments is macroeconomically troubling. Especially if it persists once the credit crisis passes."


"The precautionary behavior of every entity in the global economy has gone up," Mohamed El-Arian, CEO of the giant bond-investment fund PIMCO, tells Newsweek. "We've gone from an age of entitlement to an age of thrift."


Gross writes that nobody is advocating a return to the debt-fueled days of "4,000-square-foot second homes, $1,000 handbags and $6 specialty coffees. But in our economy, in which 70 percent of activity is derived from consumers, we do need our neighbors to spend. Otherwise we fall into what economist John Maynard Keynes called the 'paradox of thrift.' If everyone saves during a slack period, economic activity will decrease, thus making everyone poorer. We also need to start investing again not necessarily in the stocks of Citigroup or in condos in Miami. But rather to build skills, to create skills, to create the new companies that are so vital to growth, and to fund the discovery and development of new technologies."


Economists warn that if we don't manage to jolt the economy back into life soon, we run the risk of repeating Japan's so-called "lost decade" of the 1990s, Gross writes. Would that be so bad? After all, while Japan endured a prolonged period of slow growth, nobody starved, there was no social unrest in the aging country, and its biggest companies continued to innovate. But America is different. Thanks to our continually rising population, we need significant growth just to maintain our standards of living -- and the health of our democracy. "When people experience progress in their material living standards and they have some degree of optimism that it will continue, they're inclined to support public policies that reflect tolerance, opening of opportunity and commitments to democracy," says Benjamin Friedman, a Harvard economist and author of "The Moral Consequences of Growth."


A second moral imperative demands that America get back on the growth track, Gross writes. "The U.S. remains the single largest source of demand. Until America emerges from its bunker, the global economy -- facing its first year of contraction since World War II -- is likely to remain moribund."


(Read cover at www.Newsweek.com)


http://www.newsweek.com/id/189232


Photo: http://www.newscom.com/cgi-bin/prnh/20090315/NYSU004
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com
PRN2
Source: Newsweek

CONTACT: Jan Angilella of Newsweek, +1-212-445-5638


Web Site: http://www.newsweek.com/

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MELTDOWN: "There is no better book to read on the present crisis."

Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse (Hardcover)

"There is no better book to read on the present crisis."



Many Americans are looking to the new administration to solve our economic problems. Unfortunately, that is probably a vain hope. Although we were promised "change," we are only getting a continuation of the same superficial economic fixes that have damaged so many economies in the past, and that will only delay the return of prosperity.

These fixes are based on the false belief that the free-market economy has failed. But it is not the market that has failed. It is intervention into the market that has failed. The Federal Reserve and its manipulation of money and interest rates have failed. None of this can be blamed on the free market.

That's why Meltdown, a New York Times bestseller, is so important. This book actually gets things right. It correctly identifies our problems, their causes, and what we should do about them. It treats the architects of this debacle not with the undeserved reverence they receive in Washington and on television, but with the critical eye that is so conspicuously missing from our supposedly independent thinkers in academia and the media.

In a short span, Tom introduces the layman to a range of subjects that have been excluded from our national discussion for much too long. Among many other things, Tom explains Austrian business cycle theory, which he correctly identifies as the single most important piece of economic knowledge for Americans to have right now. In so doing, Tom provides Americans with the most persuasive and rational account of how we got here. Only if we correctly assess the causes of the debacle can we hope to propose a path to recovery that might actually work and not simply prolong the agony.

Our years of living beyond our means, of buying everything on credit and on money printed out of thin air, are over. Sure, our government will carry on with its nonsensical policy of curing indebtedness with more indebtedness, inflation with more inflation, but the game is up. It's not going to work. The resources aren't there. The more we intervene and the more we prop up economic zombies, the worse off we'll be. But the sooner we understand what has happened, assess our economic situation honestly, and rebuild our economy on a sound foundation, the sooner our fortunes will be restored.

Ideas still matter, and sound economic education has rarely been as urgently necessary as it is today. There is no better book to read on the present crisis than this one, and that is why I am delighted to endorse it.

Sincerely,

Rep. Ron Paul


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The Workable Bailout Option for the Nigerian Capital Market

The Workable Bailout Option for the Nigerian Capital Market



By A.G. Olisaemeka

It goes without resentment that only physical injection of funds, which will shore up prices, can lift the capital market from its present very low depth. Responding to the financial meltdown afflicting every facet of business in Nigeria, the Presidential Steering Committee on the Global Economic Meltdown has proposed short, medium and long term palliative measures to address these concerns. The committee recently observed:

"What is being worked out is a package of incentives that will ginger production, increase the purchasing power of the ordinary man on the street, and help generate employment opportunities"
"In the medium and long term strategies, aside infrastructural development, the government is looking in the direction of agriculture, through commercial farming clusters and value chain, not only for food security, but for employment generation."

While specific actions were to be taken in the areas of power and oil, it also noted that:

"While the economic outcome does not look promising given the price of oil, the President remains optimistic that Nigeria can seize the moment to redirect our economy and begin on the road to prosperity."

It has warned that the palliative measures will not include a salary increase. The issue for determination at this juncture is whether these short, medium and long term palliative measures are sufficient to uplift the Nigerian capital market. One has no difficulty in coming to a conclusion of an emphatic "No!"
It is clearly understandable that the focal point of the committee is on the general economy encompassing power, oil and gas, agriculture, the money and capital markets and the emphasis is on increased production, employment generation, higher purchasing power, infrastructural development and food security.

It is one's repeated conviction that although these measures are noble and promising, they do not provide urgent answers to the question of the Nigerian capital market meltdown. The answers they provide are both indirect and tangential to the needs of the capital market.

Only a direct government intervention, characterized by physical funds injection can salvage the descent of the Nigerian capital market.

This can be achieved through any of the following ways:

1. Government Bailout of Banks, Stockbrokers and Investors

Investors in the Nigerian capital market as at end of January have lost more than N9 trillion. Much of these funds came from banks that lent heavily to investors and stock broking firms. This has increased banks non-performing assets on one hand and has foisted the hangman's noose on investors and stock broking firms who have now become "slaves" of banks. The Federal Government can intervene by acquiring these toxic assets at cost, paying off the banks. This will stem the tide of possible bank failures arising from their present capital market over-exposure. It will also relieve the investors and stock broking firms of high debt burden in which they are entrapped and made incapable of making further investments. The government can gradually dispose off these acquired shares in the distant future in a way that will not overheat the market.
This position will align with the statement credited to the Minister of State for Finance, Mr. Remi Babalola:

"…but if for instance, the regulator of the banking system came out to say this is the make up for each of the banks and this is the exposure they have, then we can agree. It is not only in the capital market, there is significant exposure in the downstream. There are so many areas that people might have recorded significant downside. What we need to do is to quantify all these and try to see how we can take it out and give them fresh air to continue their business."

(The Punch, February 5, 2009. Page 15)



Indeed this fresh air, this relief, for banks, stock broking firms and investors is all we need to revive the capital market.



2. Direct Purchase of Shares by the Government on the Nigerian Stock Exchange



The Federal Government may also wish to utilize a Special Purpose Vehicle (SPV) or use the Ministry of Finance Incorporated to commence buying of shares on the Nigerian Stock Exchange (NSE). When these shares are purchased, they will serve twin purposes – being investment for the government which it can hold, earn returns and later resell on one hand and increase the demand segment of the capital market leading to market recovery, on the other hand, it is estimated that the sum of N800 billion will suffice as the chain effect will trigger other purchase mandates as investors confidence heightens, following the upward movement of both the market capitalization and the ALL-Share-Index.



Finally, the market seems to be gaining some points in both the index and capitalization, following the government announcement of palliative measures highlighted above. It is one's opinion that this appearance of market recovery is only the natural reaction of investors to new information which cannot be sustained.

On 4th February, 2009, the All-Share-Index gained 2.2% to close at 22, 838.32 points and on the 5th February, 2009, it again gained 2.26% to close at 23, 356.03 points. The market capitalization also gained the same percentage movement to close at N5.108 trillion and N5.2 trillion respectively. This is a far cry of all-time high figures of about 66000 points for the Index and about N13.5 trillion for the capitalization less than a year ago.



The euphoria of this announcement of palliative measures that triggered the current bullish trend in the market is not expected to last for the next five working days unless physical capital injection of funds is articulated and implemented. The government should be in a hurry to do this if it wishes to save the capital market.



President Umaru Yar'Adua has directed the the CBN and Finance Ministry to liaise with other agencies and do more work on some short-term palliative measures being proposed so that they could be implemented soon.

Let physical injection of funds into the capital market be part of these measures if they must succeed in changing the direction of the capital market for good, otherwise the Nigerian Capital Market is still sitting on a keg of gunpowder.



By A.G. Olisaemeka

~ A.G. Olisaemeka is a chartered stock broker and consultant on financial matters on doing business in Nigeria. He is the Author/Editor of Scientists Discover Hell: As Astronauts Find Heaven distributed by Amazon.