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Oluseun Onigbinde: The abridged legacy of Sanusi Lamido Sanusi

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Oluseun Onigbinde: The abridged legacy of Sanusi Lamido Sanusi

by Oluseun Onigbinde

With hidden fault lines after the post-consolidation exercise in 2005, Nigerian banking sector needed a rebirth that could be engineered by a reformer. After hurried mergers to meet the tough deadline, the new banks raised further public capital to fix the yawning holes. The stock market in hibernation arose from a deep snore as bank share prices rose to high levels with no fundamentals.

To meet expectations of investors, Nigerian banks were in breakneck speed to achieve growth. They dabbled into high risk sectors such as stock speculations and financing import of petroleum products without restraint. With poor risk structures and lack of institutional processes to manage the burgeoning exposures, it was obvious that something was wrong within the Nigerian banking sector. These fractures were accelerated with the advent of the global recession, which necessitated exit of international portfolio investors.

Ex-President Yaradua surprisingly appointed Sanusi Lamido as head of the Central bank in 2009. Sanusi Lamido Sanusi was yet to settle down as the new Managing Director of First Bank but his risk credentials in a multi-ethnic country justified such appointment.

While most Central Bankers wear a veil allowing their spin on the markets to talk, Sanusi came like a wrecking ball on frail banks standing on false fundamentals. Sanusi knew the rot in the system and he moved in with a bang destroying the quietude that enveloped the banking sector. Using a disturbing approach of “name and shame” debtors lists, roadshows and uncontrolled interviews, he was a blast from the start. The market sapped and it was difficult to reinvent the confidence that keeps it going.  Taking a system audit of banks mixed with sensational brew of the media, three banks went “under” with at least 5,000 employees losing their jobs.

These failed banks morphed into bridge banks – Enterprise, Mainstreet and Keystone banks – and were cleverly acquired by the AMCON, a rapidly formed state-backed bad bank.  His administration rewrote the regulatory framework of banks, convinced legislature of the expediency of the AMCON bill, institutionalized tenure limit for banks CEOs, reclassified banks based on capital requirements, institutionalized Islamic banks and propped up intervention funds for agriculture, power and aviation sectors. Sanusi, a prince of Kano dynasty, also reconfigured the banking operational structure, abolishing the universal banking system thereby thickly separating portfolio trading from commercial banking.

At the advent of this reforms, jobs were lost, credit stagnated for months, interbank rates spiked and his weakness to adopt reticence typical of his job threw him into the ring of controversy. From unnecessary public donations plastered with sectional tones, noise generated on Islamic banking and coinage, he could not keep his visibility minimal. Such approach and bluntness especially his incessant outburst on expensive structure on Nigeria’s statecraft propelled the Nigerian legislature to craft a failed unpopular bill, which tinkers with the independence of the apex institution.

In the end however, Sanusi’s correctional approach is visibly gainful with the return of profitability to the Nigerian banking sector, though heavily subsidized for years with high-interest government domestic bonds. He is beginning to sterilize public sector funds with increase of Cash Reserve Ratio to 75%. His unrelenting approach on inflation, which stood at double digits for a long stretch,  through Monetary Policy Committee (MPC) finally worked. He would breathe like a conqueror except for ghosts of the FX market that defied all medications and the unknown fate of the Bridge banks that are still undefined. After being a goon of Federal Government in the 2012 fuel subsidy removal crisis, he would go to the guillotine for raising alarm on the opaque structure of Nigeria’s oil revenue state company that has failed to account for unknown billions of dollars.

READ: Joanne Oji: On Sanusi: An Interpretation Of The Law

In a highly charged political era, he wore the garb of a passionate activist (untypical of a Central Bank Governor confused on the missing figures) refusing to be silenced over the waste that oils the Nigerian statecraft and the recklessness of the main hose of government revenue – the Nigeria National Petroleum Corporation. If he finds himself contesting against the sitting President who desperately seeks re-election in 2015, it will be a familiar headline.

Oluseun Onigbinde is an electrical/electronics engineering graduate who's had experiences working in two of Nigeria's premier banks; co-leading Green Acts, a hibernating non-profit organization dedicated towards climate change and sustainability awareness; and now serves as the Team Lead of BudgIT (yourbudgit.com), a civic startup he founded in 2011 during a technology bootcamp, which uses technologies of any form to make government budgets more accessible, transparent and understandable to Nigerians. Onigbinde believes in the right of all citizens to have equal access to information. He contributes to Data Journalism Handbook, is a member of the Open Spending Wiki Group, a 2012 Ashoka fellow, and winner of The Future Awards as well as the Nigeria Internet Group Prize for social entrepreneurship. He has dreams of leading a thriving public policy think-tank with a social mission of a better and informed society, driving open data across the entire Nigerian literacy chain and also publish a collection of short stories. He loves God, family, rap music, Chelsea and Juventus football clubs.

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