Nigerian banks may not have solely created today’s inclement economic weather, but they have been a catalyst and an albatross on the country.
Corrupt, greedy and notorious, top bankers are the suffocating mass around the neck of Nigerians that will not allow them to breath.
Since the sudden demise of former CEO of Access Bank, Herbert Wigwe, last month, activism against the banking industry has been surging.
Narration about how the banking system is dirty and rotten have been running rife in conversations among Nigerians.
Claims about corruption at the highest levels of the banking industry, from how the Central Bank of Nigeria (CBN) forcefully acquired banks from original owners, the writing off of billions of naira of debts on the banks’ books, to boardroom manipulation, leave the head spinning.
I decided to ignore most of the claims and counter-claims for the simple reason that if these heightened levels of corruption and heist existed within the industry, pundits should not have waited until the death of Wigwe before they started blowing the whistle.
The issue appeared too big to have simmered for so long, although it was also obvious that all was not well within the banks and the CBN.
But the feisty misbehaviour of our bankers would keep me engaged through its own automated mechanisms.
As one of its customers, I received an email from the orange-coloured bank today inviting me to buy a house abroad, causing me to initially think it was fraudulent.
I checked.
It wasn’t.
The advert read: “Secure a Home in London -Mortgage rates as low as 5%.”
One of the largest banks in Nigeria is truly luring Nigerians into sending their money to the United Kingdom while the naira is on a sick bed!
How is it possible that while Nigerians are being crushed by the scarcity of foreign exchange, the industry most responsible for keeping the economy afloat is the one pumping poison into the bloodstream?
I could not comprehend the logic behind their marketing effort.
In my simple mind, at a time like this, when Nigeria is struggling to raise the value of its currency, the rational thing for a bank to do is to attract foreign cash into the local economy.
In reverse logic, Nigeria would benefit from an inflow of capital and the approach that would be legal and ethical is inviting foreigners and the Nigerian diaspora to buy property in Lagos, Abuja, Kano, Port Harcourt or Ilorin.
Just recently, a colleague in Singapore had travelled to Johor Bahru to look for a property to buy, having been attracted by Malaysians who needed an injection of foreign investment to improve the local economy.
How is it possible that while Nigerians are being crushed by the scarcity of foreign exchange, the industry most responsible for keeping the economy afloat is the one pumping poison into the bloodstream
That makes absolute sense.
You would not see a bank advertise in its own ecosystem that its customers should invest in a foreign property market. It would be quite absurd to see that happen in the United States or the United Kingdom, at least.
A bank’s marketing package does not just have to make financial sense, it must also make political and common sense!
It appears Nigerian banks will do anything and sell anything as long as it has the smell of cash – and it is now obvious the CBN has lost control over them.
The institutional capacity of the banking industry is being wasted. Nigeria, as Africa’s most populous nation, boasts a vibrant economy that can be ignited with creative marketing.
However, this potential is marred by the hunger for overnight wins within the banking system.
Corruption in the banking sector has been a longstanding issue, deeply rooted in the country’s socio-economic fabric.
Despite various reforms and regulatory efforts, the problem persists.
Bankers have become extremely powerful and unfathomably reckless.
The time has come to rein them in, and to manage the intricate web of corruption in the banking system. The corruption of bankers erodes public trust, hinders economic growth, and diverts resources away from development.
To say that high levels of corruption undermine the integrity of financial institutions is an understatement, but the banks don’t care – as long as the money is flowing inwards.
Our banks are after instant gratification instead of long-term investments in the economy, the Nigerian people and their own survival. As long as their pockets are lined, our excessively respected bankers do not care about the economic instability that they unleash.
For short-term gains, banks would do anything, since there has been for far too many years
a weak regulatory oversight and enforcement.
The top bankers have become the regulators of their industry and of themselves. The mafia, they are.
Banking in Nigeria is now a form of racketeering. A friend described the banking system as organized crime. “I have said this many times,” he wrote on WhatsApp, “they’re the leading economic saboteurs and many of their MDs should be in jail!”
They can’t be in jail though. Political interference and collusion between regulators and industry players exacerbate the problem, perpetuating a culture of impunity.
As a result, the banks run the nation, becoming the conduit for running dollars from the official to the black market. That’s how many a banker in Nigeria became billionaires. That’s how they underdeveloped Nigeria.
In the absence of tight controls and audit, bankers took advantage of the system, breaking the rules to corruptly enrich themselves.
Bank employees with access to privileged information exploit it for personal gain, manipulating the stock market or tipping off clients about upcoming deals.
It is the banks that offer instant and unlimited loans to politicians as soon as they get into an office.
Banks encourage political leaders to spend money that they do not yet have. They also allow criminal elements to use their vaults to “clean” illicit funds.
It is the corrupt banks which charge Nigerians all sorts of surcharges every day, collecting in the process billions of naira annually for transactions that ought to be free. They charge SMS rates even when there are no phones.
It is our banks which install ATMs that do not work, encouraging human POS operators to do the work of ATMs right by their tombstoned installations.
Our banks are the institutions refusing to give Nigerian graduates decent jobs, as they once did, providing excellent benefits to workers.
Instead, most of their employees are now contract employees, many of whom are graduates living on shoestring budgets.
Even when the offer permanent jobs, they ask young graduates to deposit huge sums before a letter of employment.
With inadequate enforcement of anti-corruption laws and immensely rich banking personalities running the affairs, there is simply a regime of absolute impunity for the powerful, which hinder efforts to deter wrongdoing
The banks have turned many of their female employees into prostitutes, requiring them to search for funds from men who would demand sex for deposits.
It is known that some banks have signed non-disclosure agreements with female employees to avoid marriage for multiple years of their career.
There is an absence of effective governance in Nigerian banking.
Inadequate oversight by bank boards and lax enforcement of regulations have created an environment conducive to corruption.
It has unleashed a lack of transparency in decision-making and a reluctance to hold wrongdoers accountable.
With inadequate enforcement of anti-corruption laws and immensely rich banking personalities running the affairs, there is simply a regime of absolute impunity for the powerful, which hinder efforts to deter wrongdoing.
The big bankers know they are invisible and can get away with any bad act.
Someone will need to put a leash on the banking industry and steer it in the right direction.
And if that person is not the Governor of the Central Bank of Nigeria or the Minister of Finance, then it must be President Bola Tinubu.
The CBN needs robust regulations with clear penalties for violations.
An era of compliance must begin. Independent audits of banks must start.
Moreover, there is a need to strengthen corporate governance practices within banks, including the appointment of independent directors, enhancing risk management frameworks, and promoting whistleblower protection mechanisms.
Anti-corruption agencies like the EFCC need adequate resources and independence to investigate and prosecute financial crimes.
It is not acceptable for tone-deaf bankers to ask Nigerians for investments in London when we can use all the dollars and pounds at home.
Impunity in Nigeria’s banking system poses a significant threat to economic stability, social cohesion and democratic governance.
Corruption also distorts market dynamics, favouring well-connected elites and stifling competition, which exacerbates income inequality and hampers poverty alleviation efforts.
The banking industry is where the real change must begin.
