Mrs. (Dr) Ngozi Okonjo-Iweala the Nigerian immediate past
coordinating minister of the Economy and the minister of Finance is no doubt a
vastly respected economist especially amongst Western audiences. But for a lot
of Nigerians who feeds from hands to mouths, she does not merit the title of a
heroine because as far as the poverty index is concerned, this woman known in
the World Bank’s corridors -of -power as an African woman of valour can not by
any stretch of imagination be regarded as a woman of distinguished courage or
ability nor is she to be admired for her brave deeds and noble qualities. This
cynicism amongst the over 90 million absolutely impoverished Nigerians got to
its Zenith sometime last year when the political authorities were in celebratory
mood over the rebasing of the Nigerian economy and the naming of Nigeria as
having the largest economy in Africa.
Poverty stricken Nigerians in their millions were aghast at this
seemingly unfounded rating of the local Nigerian economy because if micro and
micro economic indices are to be computed in terms of the total balance sheets
of Naira and kobo available to each household in Nigeria, then this so-called
economic statistics brandished by the Abuja politicians can at best only exist
in their warped and insensitive imagination because there is really no
correlationship between those claims and the economic hardships of millions of
Nigerians.
This is a country whereby the owners of small businesses have so
much suffered neglect from all angles that they practically survive on life
support.
Essentially, in most developed economy, the Banks exists to grant
credit life lines sustainably to small businesses because it is a universal
truth that small businesses hold the key to the economic turn around of most
developed nations. Japan, China, USA and United Kingdom present good pictures
of how small businesses play pivotal roles to local economic growth.
Writing under the topic: “economic situation small businesses”,
Mathew Ward and Chris Rhodes in the commons briefing papers stated clearly that
small businesses indeed are playing frontline roles in reshaping and rebuilding
the British economy.
Published on December 9th 2014 this note presents a statistical
analysis of small businesses in the UK, the role of small businesses in
international trade, small businesses and GDP, small businesses and tax
receipts and information on government policy towards small businesses.
The highlights are thus;
• In 2014, there were 5.2 million businesses in the UK, over 99%
of which were small and medium enterprises; small and medium enterprises
employed 15.2 million people in the UK in 2014 and the European Commission’s
SME Performance Review estimates the Gross Value Added of SMEs as €473 billion
or 49.8% of the UK economy".
The African Development Bank group had recently pointed out the
challenging issue of poverty afflicting the majority of Nigerians even with the
recent rebasing of Nigeria’s Gross Domestic Products (GDP) from 1990 to 2010
which in theory resulted in an 89 percent increase in the estimated size
of the economy.
The African Development Bank apparently realizing that the
majority of Nigerians who engage in small businesses are not been carried
along, had stated thus; “Nigeria faces an ongoing challenge of making its
decade-long sustained growth more inclusive.
Poverty and unemployment remain prominent among the major
challenges facing the economy. One reason for this is that the benefits of
economic growth have not sufficiently tricked down to the poor”.
The above facts which constitute the existential reality on the
ground demonstrate in black and white that we have a non performing nation with
non performing banking institutions.
Most banks only exists to collect deposits from the poor and
struggling owners of small businesses and conspire with the political drivers
of the Nigerian economy to arrange humongous credit facilities to few persons
in the elitist club with access to the corridors-of- political power and these
largely unproductive and fraudulent business executives simply refuses to
service these huge debts and their co-conspirators in government have ways of
coming up with some contraptions such as Assets management company of Nigeria (
AMCON) which was set up in 2009 to buy up bad debts accumulated by these
dubious business executives whose activities have wrecked economic havoc and
ruin so many banks. But in the case of small businesses, they have no Banks to
look up to for credit life lines.
Few days back, the Central Bank of Nigeria blew the lid to show
that we have over N400 Billion non performing loans.
A statement by Dr. Sarah Alade, Deputy Governor, Economic Policy
at the CBN revealed that the bad debts were recorded between August 2013 and
August this year. This figure indicates an increase of N56.31bn or 16.36
percent, up from N344.26bn recorded within the same period last year. The
statistics also show that gross loans by the banks increased by 21.03 percent
from N9.278trn in August last year, to N11.229trn in August this year.
An immediate consequence of the high non-performing loans is a
suffocating squeeze in the finances of the banks, as a larger
percentage of the banks’ gross earnings have reportedly gone into investment
and interest, loan loss, personnel and other operational expenses, so says
expert who wrote recently in the Nigerian Daily Sun Newspaper. "It is bad
that the banks have such high impaired loans, which is an unsavoury condition
in which an asset’s market value falls below its ceiling amount. In that case,
recovery is minimal".
"Consequently, liquidity risks set in. According to figures
made available by the apex bank, by the end of August 2014, the banks had
incurred a hefty N267.74bn in loans loss provision".
"Expectedly, the unaudited profit before tax of the banks in
the last nine months ending September, 2014, shows a marginal decrease to
N385.67bn against N385.68bn in 2013. But the liquidity ratio of the banks
declined from 50.6 percent at the end of December 2013, to 42.6 percent.
This is largely due to the increased Cash Reserve Requirement (CRR)", the
expert affirmed.
Similarly the writer remanded us thus; "It needs recalling
that heavy “toxic loans” of about N4.3 trillion led to the insolvency of
some banks and the subsequent sack of their helmsmen, few years ago. The
banks were eventually taken over by the CBN and handed to the Assets Management
Corporation of Nigeria (AMCON).The economic meltdown which resulted from
the bad debts of five years ago shook the banking industry".
Unfortunately the Federal High Courts which enjoys sole
jurisdictions on matters involving such dubiously accumulated debts profile of
the so called rich Nigerians have failed to use their constitutional might
judiciously to retrieve these looted funds from these bad guys but the judges
of these courts have lately unleashed series of judgments protecting these bad
debtors from arrest and prosecution in what most people suspect to be a case of
compromise of the justice sector. Any nation whose majority of the judges will
rather collect huge bribes from criminal syndicates and look the other way will
never become economically strong even as foreign direct investors who genuinely
wish to do business will stay away from our shores and then the poverty
situation of most Nigerians coupled with unemployment of the youth will further
expand thereby compounding the crime situation. The Muhammadu Buhari led
government must use all the transparent mechanisms to lawfully retrieve these
huge cash stolen indirectly from banks by these so called big boys who pester
the Abuja corridors of power for favour and soft landing. Thieves must not be
granted soft landing because they have wrecked our economy and left millions of
Nigerians to face the stark reality of mass and absolute poverty. These bad
business practitioners must face the wrath of the law if we must end the
climate of impunity in our banking sector.
* Emmanuel Onwubiko is Head of Human rights Writers association of
Nigeria and blogs @www.huriwa.blogspot.com; www.rightsassociationngr.com and www.huriwa.org.
15/6/2015.
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