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<? print $message; ?> </td> </tr> <tr> <td align="right" class="smText" height="20">Posted by aa on Saturday, February 21, 2009 at 11:11 </td> </tr> </table></td> </tr> </table></td> </tr> </table> <table width="100%" border="0" class="othertables" cellspacing="0" cellpadding="0" bgcolor=""> <tr> <td> <table width="100%" border="0" cellspacing="0" cellpadding="3" style="border-collapse: collapse; border-width: 0" bordercolor="#111111" class="othertables"> <tr> <td bgcolor="#FFFFFF" class="heading"><h2>Global Crisis: CBN As The Whipping Boy (1) </h2></td> </tr> <tr> <td bgcolor="#FFFFFF" class="text"> <table width="100%" border="0" cellspacing="0" cellpadding="0" style="border-collapse: collapse; border-width: 0" bordercolor="#111111"> <tr> <td class="text">Recently, a friend was going through weekend newspapers and suddenly shouted, “This is Nigeria”! Immediately, I cast a querying expression at him. In response, said that it appears the newspaper people and commentators are more interested in fault finding than focusing on finding solutions to the current global financial crisis as it affects the Nigerian economy. Instead of trying to x-ray the problems as it affects the Nigerian economy, given our peculiar circumstances and proffering credible and constructive options to deal with them, we have all resorted to the blame game. <br><br>This indeed portrays us as a people that don’t think. A few among us would spare no time and energy to articulate a thought, think through it and muster the courage to put it forward as public policy. The reward is usually to blame without proffering viable alternative policy.<br><br>These days, the headlines are awash with stories accusing the Governor, Central Bank of Nigeria (CBN) Professor Chukwuma Soludo or the CBN for one woe or the other. It will be recalled that the global financial crisis started as a result of sub prime crisis which led to the collapse of the Federal Mortgage institutions, Fannie Mae and Freddie Mac in the United States and Northern Rock in the United Kingdom. This triggered the question whether our Nigerian banks were safe. The CBN Governor took up the challenge, explaining that Nigerian banks are strong, safe and sound. He went further to reassure the country that Nigerian banks would not suffer the same fate because they were not exposed to such toxic assets like those of the US and UK. These explanations were given at the two chambers of the National Assembly, the Federal Executive Council meetings and at press conferences. <br><br>First it was the melting down of stock prices at the Nigerian Stock Exchange (NSE). The financial media went to town and sounded their gong aloud telling every body that cared to read or listen that it was the CBN’s directive to banks to stop margin trading that precipitated the falling stock prices at the NSE. Some attributed the development at the stock market to the CBN directive for a common financial year end being proposed for the banking sector, while some say it was as a result of the tight monetary policy of the CBN which impacted negatively in the stock market as banks were becoming risk averse in extending credit to the public. <br><br>Available evidences suggest to the contrary. The CBN issued press releases and statements pointing out that at no time did it issue any circular stopping banks from lending for margin trading. In addition, the Bank had to suspend the common financial year end policy for banks. The apex Bank in order to lubricate the system and to ensure that the financial system remains liquid, decided to reduce the monetary policy rate (MPR) from 10.25 per cent to 9.75 per cent. The CBN also reduced the CRR from 4 per cent to 2 per cent with immediate effect and reduced the liquidity ratio from 40 to 30 per cent. The Bank allowed more latitude for repurchase (repo) transactions against eligible securities to stretch from between 90, 180 and 360 days.<br><br> Having done all these, the stock market melt down continued unabated, as evidences to show that the factors being alleged were not truly the cause of the slide in stock market prices. The Bank was prompt to explain that the downward slide in stock prices was precipitated by the massive divestment by foreign institutional investors who needed fund to shore up their precarious financial positions in Europe and the US. This triggered panic among some experts with inside information in the stock market to start off loading their holdings. The development prompted the banks to start taking measures to mitigate the attendant risk arising from their exposures to the stock brokers by either recalling loans given for margin trading or refusing to lend in that regard. <br><br>However, the situation at the global economic scene worsened with the crisis that started in the financial sector developing into second round effects, thus affecting the real sector of the OECD countries resulting into sluggish demand and fall in commodity prices, including oil which is the major export commodity and main foreign exchange earner for the country. This development led to the need to allow the Naira exchange rate to adjust to the realities of the emerging economic fundamental in Nigeria, with the drastic fall in the prices of oil to $40 per barrel which earlier in 2008 peaked at $147 per barrel. <br><br>The depreciating Naira bruised the psyche of many Nigerians. To them, the depreciating Naira could be likened to deplorable condition painted by Prophet Jeremiah in the Holy Bible when he said “The harvest is finished, the summer is over, and we are not saved” (Jeremiah 8:20). The feeling is understood. Nigerians were not prepared to accept this, not from their most trusted ‘Economic General’ in the person of the Governor of CBN, Prof. Chukwuma Soludo who once told them that the Naira is the currency to hold. And indeed, the Naira is still the currency to hold when compared with emerging market economies like South Korea, Russia etc.<br><br>Setting aside sentiments, with a floating exchange rate regime, it is quite appropriate to allow the Naira to depreciate, bearing in mind that ours is an import-dependent economy and Nigerians have an insatiate appetite for imported goods. There are equally other compelling logic and benefits derivable from allowing the Naira to depreciate against other major international currencies. <br><br>The exchange rate adjustment will permit the various levels of governments to have enough Naira to execute their economic projects instead of a repeat of abandoned projects that dotted the Nigerian landscape as experienced during the austerity measures era of 1982 -1986. It also has the added advantage of minimizing the deficit implicit in the 2009 budget, thereby moderating the attendant inflationary pressure. Above all, the adjustment has a double barrel effect of protecting the local industries and employment in the face of the risk of having to contend with massive dumping of goods from the international market, given the crashing prices of goods and freight rates from the advanced countries. <br><br>But what do we read in papers today? It is either “Blame the CBN or Soludo for depreciating Naira” or “Soludo is misleading Nigerians”. According to them, when this global crisis started he was asked whether Nigeria will be affected and he reassured us that we would not be affected. The CBN Governor assured Nigerians that the Nigerian banks would not be affected because they are not exposed to toxic assets like their counterparts in USA and Europe and also because of the banking sector consolidation which made Nigerian banks bigger, stronger and sound. The CBN Governor even went a step further to remind Nigerians that the only way the country would be affected was through trade which had happened with the fall in the price of crude oil in the international market. <br><br>Nigerians have all forgotten too soon, where we were coming from. Nobody seems to pause and ask why more credible and strong US and European banks with international reputation built over years would be collapsing while the Nigerian banks are strong enough to declare profits. Instead of celebrating CBN and its Governor, they have been selected to be the whipping boy of the effects of the global financial crisis. <br><br>Even the so called renowned commentators of repute and columnists have all abandoned their analytical sense to condescend to the blame game. These columnists of fortune, instead of elevating the mode of discourse beyond personal interest, have chosen rather to paint a gloomy scenario, thus inciting Nigerians against managers of the economy. This is uncalled for. <br><br>Analysis of these commentators is often couched as if to suggest that the CBN Governor is hired to destabilize the Nigeria economy. The entire argument sounds as if Soludo is a foreigner from a county in Houston, USA or a local council in Manchester, UK. Nigerians are waiting for these ‘patriotic’ commentators and columnists to outline the counterfactuals if the Naira exchange rates were allowed to remain at the same rate when crude oil price were over $100 per barrel as they tend to suggest. We are waiting for their alternative policies that are more credible, constructive and patriotic enough to discredit those being implemented by the CBN. Otherwise, they should shut up and allow the CBN under Prof. Soludo to contend with the issue at stake in the best way possible and in the general interest of our country. </td> </tr> <tr> <td align="right" class="smText" height="20">Posted by Nosa Osaretin on Tuesday, February 10, 2009 at 07:49 <a href="journal/journal_comments.asp?JournalID=12&PagePosition=" target="_self" style="font-size: 10px">Comments</a> (0) </td> </tr> </table></td> </tr> </table></td> </tr> </table> <table width="100%" border="0" class="othertables" cellspacing="0" cellpadding="0" bgcolor=""> <tr> <td> <table width="100%" border="0" cellspacing="0" cellpadding="3" style="border-collapse: collapse; border-width: 0" bordercolor="#111111" class="othertables"> <tr> <td bgcolor="#FFFFFF" class="heading"><h2>THE EXCHANGE RATE DEBATE</h2></td> </tr> <tr> <td bgcolor="#FFFFFF" class="text"> <table width="100%" border="0" cellspacing="0" cellpadding="0" style="border-collapse: collapse; border-width: 0" bordercolor="#111111"> <tr> <td class="text">In the last couple of days, considerable amount of newsprint and air time have been devoted to debating the dwindling fortunes of the Naira at the foreign exchange market, almost to the point of hysteria. As usual, every Nigerian has become an expert, proffering reasons and analyses on how the problem should be addressed. Exchange rate issues are always emotive, since national currencies of sovereign nations are jealously guarded like independence. So you can’t blame Nigerians for crying out loud when you recall how the almighty England refused to subjugate the pound sterling to the continental Euro.<br><br>The apprehensions and concerns are therefore justified. The reverberations of a depreciating currency translate into higher cost of production since more naira would now have to exchange for lesser dollars, fuelling anxieties nation-wide. For an import dependent economy, it means higher naira value of imported raw materials, with the attendant higher prices for the output, and in the worst case leading to loss of jobs if the manufacturing outfits decide to downsize their operations. And for a sector that has been reeling under inclement clime occasioned by other problems, for example, the infrastructural challenges-poor roads, energy problems-it was clear the depreciation of the naira would elicit hoopla from all quarters. <br><br>In the process, reasons have taken flight. Pseudo analysts and sundry commentators have taken it upon themselves to rail against the Central Bank of Nigeria, CBN for allegedly failing in the discharge of one of its mandate to maintain external reserves to safeguard the international value of the legal tender currency. Others went further to impute motives against the Bank’s management, especially the Governor; Professor Chukwuma Soludo whom some insist must resign his appointment over the naira depreciation. <br><br>On its part, The House Committee on Banking in a televised session gleefully declared that the Economics Professor has not provided a good justification for the naira’s fall as the media coined the expression. The House session was ignorance at full display. What that session confirmed was what some of us had written before about the quality of the so called honourables. Most of the members do not have the depth to take this country to anywhere. They are only interested in the perks. The media has not helped the situation either. The confusion became inherent when depreciation turned into devaluation on the pages of newspapers with screaming headlines. Even business publications that were supposed to know became the conduit for misinforming the public.<br><br>It is a sad commentary that the same Soludo that the United Nations found worthy of joining other renowned economists to address the global financial crisis is the same person some Nigerians are calling for his head. What is more, Soludo is the only economist from Africa picked by the world body to take part on the assignment. While not holding brief for Soludo, a task which the professor can undertake without assistance, it is pertinent to explain the under currents of exchange rate regime before we allow the mob to take over the discourse.<br><br>The issues are very clear. We will approach this from several perspectives. First, what informed the naira’s depreciation in the past few weeks? Note the word depreciation. Depreciation occurs when there is an increase in the naira exchange rate under a currency float or flexible regime through the market influence of demand and supply whereas devaluation is a direct reduction in the foreign exchange value of a national currency under a fixed exchange rate regime. So how can it be depreciation when the regime is market determined? The fixed regime was last operated in the 1980s before the introduction of the Structural Adjustment Programme in 1986. Advocates of this fixed regime, probably, if we excuse them could not see the nexus between accretion to foreign reserves and the rate of exchange. It was this same confusion that led to a situation where devaluation was and is still been interchangeably used to mean depreciation.<br><br>From the fore-going, it should be clear that with the global economic recession and its attendant implication for commodity prices-which in Nigeria’s case led to sharp drop in the prices of oil- the decline in oil revenue means something has to give. Simply put, the decline in revenue inflows impacts on foreign reserves and ultimately on the exchange rate. So what happened since last November was basically economics of the market playing itself out. Many Nigerians suffer from amnesia. If the CBN had not taken the decision to build up the reserves, perhaps we would have been in a mess by now. Where are the politicians who almost crucified Soludo for refusing to hearken to their greed to share the revenue in the excess crude account then? <br><br>For emphasis, where are those who cited the constitutional mandate which states that all revenue accruing into the federation account must be shared among the three tiers of government when people like Soludo urged caution, saving in the process for the proverbial rainy day? The apex Bank had also proposed several other measures among which was the strategic agenda for the naira and the creation of a sovereign wealth fund. The strategic agenda was shot down by the herd mentality before its demerits could be thoroughly debated while the wealth fund would have been a multi purpose investment vehicle that would safe guard the future generation of Nigerians in view of the wasting nature of oil.<br><br>The chicken has come home to roost with the declining revenue from oil. The 2009 budget is already in jeopardy with prices below the $45 benchmark. Yet, our legislatures are not miffed. They have gone ahead to balloon the budget above =N=3 trillion without considering the effects of deficit budgeting and its implication on the value of the naira. With the new American President Barrack Obama’s pronouncement that his country should seek alternative to oil, we might be in for hard times ahead in view of the fact that America is our biggest oil buyer. So what measures are we putting in place to mitigate the negative effects of the unfolding scenario? What we have instead was public display of motion without movement. <br><br>Agreed, the apex Bank has the ultimate challenge of ensuring that the economy is on even keel, it would be foolhardy to expect that this would work when every footstep forward is complemented by two backwards on the fiscal side. The fiscal side is the multifarious governmental institutions such as ministries and agencies and they jointly control the ultimate lever. It is this same side that has failed to diversify the economy several decades after espousing such ideal. It also yearly decides how much to be spent under the annual budget ritual and on which preferred sectors the allocations would go. Two years down the road for the present administration, no budget has been implemented up to 40 per cent, yet nobody sees anything wrong with that. No one is taking the government to task why it has failed to live up to its obligations to Nigerians.<br><br>The organized private sector, OPS will continue to rail in vain if the sector believes the only problem against enterprise is basically the high cost of fund. Even if the CBN reduces it’s Monetary Policy Rate, MPR to nil and there is no drastic improvement in the operating clime, capacity utilization would remain at the abysmal level. Effective infrastructure-good roads, regular power supply and potable water, security- plays far bigger role than just cheap cost of fund. Just imagine how average cost would have been driven downwards if manufacturers are not powering their operations with generators. From available statistics, credit to the OPS grew by over 50 per cent last year, so the problem is not just finance. The fiscal operations need a complete overhaul. It would not take us to great heights as it is presently structured. We need men imbued with vision, courage and determination. We need men who would translate their dreams into reality. <br><br>We have a long way to go and it is high time we devoted our time to robust intellectual debates devoid of name calling and pettiness. <br><br>OLA is an Abuja based analyst. <br> </td> </tr> <tr> <td align="right" class="smText" height="20">Posted by ANTHONY OLA on Tuesday, February 10, 2009 at 07:28 <a href="journal/journal_comments.asp?JournalID=11&PagePosition=" target="_self" style="font-size: 10px">Comments</a> (0) </td> </tr> </table></td> </tr> </table></td> </tr> </table> <table width="100%" border="0" class="othertables" cellspacing="0" cellpadding="0" bgcolor=""> <tr> <td> <table width="100%" border="0" cellspacing="0" cellpadding="3" style="border-collapse: collapse; border-width: 0" bordercolor="#111111" class="othertables"> <tr> <td bgcolor="#FFFFFF" class="heading"><h2>ECONOMIC CRISIS: WHO SHOULD BE BELIEVED?</h2></td> </tr> <tr> <td bgcolor="#FFFFFF" class="text"> <table width="100%" border="0" cellspacing="0" cellpadding="0" style="border-collapse: collapse; border-width: 0" bordercolor="#111111"> <tr> <td class="text">The other day, precisely Wednesday, January 21, 2009, millions of Nigerians, including my humble self were glued to television sets watching the live transmission of the appearance of the Governor of the Central Bank of Nigeria, Professor Chukwuma Soludo before a committee of the House of Representatives as he explained the true position of the Nigeria’s economy and steps being taken to wade off any unpalatable drift.<br><br>I was amused about the level of emotions and outcry by the honourable members. I had wished they share similar sentiments three years back. May be, the situation could have been better than what is obtainable today.<br><br>In my mind, the position of the CBN Governor and the salient reasons which informed his submission about the level of vulnerability of Nigeria’s economy in the face of global melt down remained valid up to this moment. He clearly stated then, I remembered precisely, both at the THISDAY’s Town Hall Meeting in November 2008 and at the Senate plenary session that the economic fundamentals favoured Nigeria even though not completely insulated from the global crisis. That position was quite valid and has not changed. What Nigeria is experiencing now is the ‘second-round effects” resulting from credit crunch, ineffective demand for goods and services, declining output and job cuts in the industrialized economies. <br><br>Invariably, that has affected the demand for crude oil negatively thereby resulting into falling price of crude oil at the international market. This calls for “belt tightening” measures on the part of policy makers as there are no signs of recovery in the nearest future. More so, that major consuming nations like China and the United States of America have either stockpiled the product for future consumption or vigorously searching for alternative sources of energy to power their economies.<br><br>For God’s sake, we have been hearing about Nigeria being a monoculture economy dominated by crude oil and the need to diversify the mainstay since l970s, and more than three decades later, the entire clamour for diversification amounted to mere a wishful thinking or at best a slogan.<br><br>Today, the concern of every one is about the sudden fall in the value of the Naira against other major currencies like the Dollar, British Pound Sterling and the Euro. But what did we do when we had all the opportunities to lay a solid foundation for the defense of the Naira’s value, especially when we savoured the “sweet aroma” of the Dollar rain. What did we do when the exchange rate was stabilized between N118 and N125 to Dollar for almost three years? And if the exchange rate should go back to N100 to one Dollar, what plans do we have for proper utilization of the foreign exchange?<br><br>The truth is that the CBN has sustained the stable exchange rate of N118 to One Dollar for a long time without a commensurate local production to shore up Nigeria’s balance of payment position. Instead, we gleefully tied our apron to petrodollar and embark on importation jamboree. That was the same period our leaders were clamouring for the appropriation of the so called excess crude oil account. But if only half of the normal allocations were judiciously used for the provision of vital infrastructure, maybe the story would have been different now. Anyway, the discourse on exchange rate dynamic is reserved for another day.<br><br>Today, the price of the crude oil has nose-dived from $147 to about $36 per barrel, far below the 2009 budget estimate of $45 per barrel. This is as result of low demand for oil in the international market due to economic down turn of the major consuming nations. Indeed, austere time is here, at least for now and we need to re-order our priority. But in the case of Nigeria, the demand for foreign exchange soars without any justification other than speculative. What else do you expect other than undue pressure on the Naira. Just last Friday I came across an advertisement published in the newspapers titled “CBN Forex Sales to End Users” indicating who demanded for how much and for what purpose at the foreign exchange market. The record showed that a total of $672,207,968.87 was demanded between January 19 and 28 alone. That record was for those with $100,000 and above demand. And one can imagine what the total sum would be when those that demanded below $99,999.00 are added.<br><br>Further scrutiny of the items for which foreign exchange was demanded revealed that if only we had laid good foundation and sustained such, by now Nigeria should have been a net exporter of such items like newsprint, package juice, frozen fish, billets and even petroleum jelly to mention just a few of the items being imported. How then, would the foreign reserves not reduce especially when Nigeria had over $60 billion in the reserves and was earning about five per cent interest on investment and all of a sudden we now have about $50 billion with the interest rate inching towards zero.<br><br>It is absolutely incorrect and misrepresentation of the position of the CBN as to what extent will Nigeria’s economy be affected by the global economic crisis. The level of pessimism emanating form some quarters was alarming. The whole thing is sounding as if these group of people are eager to witness Nigeria’s economic doom with the way and manner they are carrying on with their unwholesome campaign. An average mind may be wondering who’s to be believed, whether the managers of the economy or the pundits.<br><br>The optimism expressed by the CBN about the Nigerian economy should be seen as patriotic and commended. The Bank has matched words with actions in discharging its statutory mandates. <br><br>Be as it may, agitating minds may hold the public sectors are culpable of recklessness and failure to address the issue of economic development of Nigeria sincerely. But my humble submission is that this is not the time for trading blames or calling for the resignation of one public officer or the other.<br><br>The “chicken has come home to roost” and our inability as a nation to execute development plans to fruition has again exposed us to the vagaries of global economic meltdown and fast driving Nigeria into the lower rung development ladder. But all hopes are not lost as attested to by Merril Lynch, one of the World’s leading financial and management consultants ranked Nigeria among the ten least vulnerable economies in the world. We should learn to believe our leaders and play down negativity<br><br>For now, it is becoming obvious that 2009 fiscal budget is unrealizable but that does not mean we should dip hand into the reserves or excess crude account in particular, to augment the envisaged budget shortfall. No. Rather, the most auspicious thing to do is to reorder our priorities especially in project implementation while watching cost of running the government. We should focus on infrastructural development for effective take-off of the real sector. Similarly, government at all levels should leverage on the enormous potentials of agriculture. <br> </td> </tr> <tr> <td align="right" class="smText" height="20">Posted by Baba Kabiru from Gudu District Abuja on Tuesday, February 10, 2009 at 07:27 <a href="journal/journal_comments.asp?JournalID=10&PagePosition=" target="_self" style="font-size: 10px">Comments</a> (0) </td> </tr> </table></td> </tr> </table></td> </tr> </table> <table width="100%" border="0" class="othertables" cellspacing="0" cellpadding="0" bgcolor=""> <tr> <td> <table width="100%" border="0" cellspacing="0" cellpadding="3" style="border-collapse: collapse; border-width: 0" bordercolor="#111111" class="othertables"> <tr> <td bgcolor="#FFFFFF" class="heading"><h2>Re-Ndic And Payment To Depositors: Matters Arising</h2></td> </tr> <tr> <td bgcolor="#FFFFFF" class="text"> <table width="100%" border="0" cellspacing="0" cellpadding="0" style="border-collapse: collapse; border-width: 0" bordercolor="#111111"> <tr> <td class="text"><P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">The editorial with the above title in the Guardian of <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:date w:st="on" Year="2007" Day="11" Month="1">Wednesday, January 11, 2007</st1:date> refers. The plight of depositors caught in the quagmire of banking distress and failure should, no doubt be of utmost concern to a newspaper whose philosophy is conscience nurtured by truth. This in itself is the hallmark of responsible journalism driven by the desire to foster overall public good.</P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">However, the concern should go beyond merely drawing attention to the plight of these hapless citizens denied access to their hard-earned money through no fault of theirs to a thorough and factual analysis of the true situation on the ground devoid of subjective conclusions. It should as deliberate policy guarantee fairness by extending the same searchlight to the distress resolution framework and strategies put in place by the authorities in order to ensure balance. The editorial in question failed to observe this simple maxim and in the process ended up drawing erroneous conclusions which cast aspersion on the integrity of the Central Bank of <st1:place w:st="on"><st1:country-region w:st="on">Nigeria</st1:country-region></st1:place>, CBN. <SPAN style="mso-spacerun: yes"> </SPAN></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">What are the facts? The Banking sector Consolidation exercise came to a close on December 31, 2005 at the end of which 14 deposit money banks with negative shareholders’ fund that could not find merger partners had their licenses revoked by the CBN. The Governor of the Bank, Professor Chukwuma Soludo had then promised that unlike in the past where depositors were left in the lurch during the banking distress era of the 80s, private depositors of the 14 banks that were unable to meet the consolidation deadline should be rest assured of receiving their deposits in full. </P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">The Governor did not promise that depositors of the insolvent banks would be paid on <st1:date w:st="on" Year="2005" Day="31" Month="12">31<SUP>st</SUP> December, 2005</st1:date>. Indeed, that was deadline for the banks to meet the capital/consolidation requirements. In addition, the revocation of the licences of the banks that were insolvent and failed to meet the set criteria did not take place until <st1:date w:st="on" Year="2006" Day="16" Month="1">January 16, 2006</st1:date>. It was on that day that the Governor announced the policy that all private depositors would be paid all their deposits and not just the =N=50,000.00 under the insurance scheme, within the shortest possible time.</P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">He specifically made it clear that the CBN was interested in protecting the hard -earned money of private depositors and that the Bank would do everything possible to ensure that the deposit resolution is effected within the shortest time possible. When asked by a reporter to give a time limit the Governor replied that given the processes involved, the minimum time before payment would commence should not be less than 90 days. It is perhaps this that has been misinterpreted to mean a three-month deadline in which all depositors would be paid. Even a severe interpretation would put that to <st1:date w:st="on" Year="2006" Day="15" Month="4">April 15, 2006</st1:date> and not <st1:date w:st="on" Year="2005" Day="31" Month="12">December 31, 2005</st1:date> as the Guardian Newspaper would want the world to believe.</P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">Secondly, the number of banks involved is 14 and not 34 as the Guardian editorial purported. As at <st1:date w:st="on" Year="2005" Day="31" Month="12">December 31, 2005</st1:date> there were 89 mostly fragile and small banks operating in the country. On <st1:date w:st="on" Year="2006" Day="2" Month="1">January 2, 2006</st1:date>, the CBN announced the emergence of 25 banks comprising 75 banks that independently or through mergers had met the set criteria. That left the 14 insolvent banks and not 34. The Guardian ought to know. </P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">However, some of the promoters of the failed 14 banks out of selfish considerations instituted legal actions to challenge the revocation of their banking licenses. The legal obstacles prompted some delay in the failure- resolution of three out of the 14 banks.<SPAN style="mso-spacerun: yes"> </SPAN>Although this was anticipated, it is on record that through the failure resolution option of Purchase and Assumption (P&A), the verified deposits of private depositors of the former Allstate Trust Bank Plc were by May, 2006 fully transferred to Ecobank Plc. This is particularly significant when viewed from the percentage of depositors that were involved as a proportion of the total population of the failed 14 banks. The transferred Allstates private depositors represent almost 50 per cent of the total for all the 14 banks. </P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">Suffice to note that private depositors of the former Lead and Assurance banks had also been fully transferred to Afribank Plc while those of Trade Bank are being assumed by UBA Plc. In all cases, the private depositors involved now have unhindered access to their deposits and on top of it continuity of banking services.<SPAN style="mso-spacerun: yes"> </SPAN></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">All efforts are being made to speed up the process to bring succor to the depositors of the remaining four <st1:place w:st="on"><st1:PlaceName w:st="on">banks-</st1:PlaceName> <st1:PlaceType w:st="on">City</st1:PlaceType></st1:place> Express, African Express, Metropolitan and Hallmark.</P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">We once again implore media practitioners to always take the pains to cross-check their facts. On our part, we will continuously strive to ensure that the two-way information flow is not impaired. <SPAN style="mso-spacerun: yes"> </SPAN></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><o:p> </o:p></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">Head, Corporate Affairs</P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify">Central Bank of <st1:place w:st="on"><st1:country-region w:st="on">Nigeria</st1:country-region></st1:place></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify"><st1:place w:st="on"><st1:City w:st="on">Abuja</st1:City></st1:place>.<SPAN style="mso-spacerun: yes"> </SPAN></P> </td> </tr> <tr> <td align="right" class="smText" height="20">Posted by <a href="mailto:foodoko@cenbank.org" style="font-size: 10px;">ODOKO, FESTUS OKORO</a> on Friday, January 19, 2007 at 00:22 <a href="journal/journal_comments.asp?JournalID=9&PagePosition=" target="_self" style="font-size: 10px">Comments</a> (1264) </td> </tr> </table></td> </tr> </table></td> </tr> </table> <p align="left"><a href="journal/default.asp" target="_self" class="mail">View Journal and Archive</a> <br> </td> </tr> </table> <!-- End Blog --> Powered by Web wiz Journal - Copyright <font face="Verdana">©</font> 2001 - 2002. </td> <td width=200 valign="top"> <!-- Start Right Nav --> <link href="stylesheets/newstyle.css" rel="stylesheet" type="text/css"> <table border="0" width="100%"> <tr> <th align="left">Facts : 1/7/1959</th> </tr> <tr> <td><b>Evolution of Departments</b>:At inception, the organisational structure of the CBN was understandably simple consisting of two departments, namely, the General Manager's and the Secretary's Departments, with the appropriate division of labour as then percieved. 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