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AFC probe: Bankers speak

Posted by By AMECHI OGBONNA AND SEUN ADESIDA on 2008/04/23 | Views: 681 |

AFC probe: Bankers speak


Two past Presidents of the Chartered Institute of Bankers of Nigeria have urged the management of the Central Bank of Nigeria, (CBN) to remain focused on its statutory mandate of regulating the Nigerian financial system and the economy, rather than being distracted by the ongoing probe of its $480 million equity investment in the African Finance Corporation (AFC.)

Two past Presidents of the Chartered Institute of Bankers of Nigeria have urged the management of the Central Bank of Nigeria, (CBN) to remain focused on its statutory mandate of regulating the Nigerian financial system and the economy, rather than being distracted by the ongoing probe of its $480 million equity investment in the African Finance Corporation (AFC.)

According to Chief Samuel Kolawole, the immediate past president and chairman of council of the CIBN, the probe should be seen as part of the democratic process, because in every democracy, people should be free to express their opinions on issues they are not very satisfied with.

He pointed out that whatever administrative processes that are going on at the moment should not be a distraction to the CBN from achieving its set goal, especially as it may be difficult for the apex bank to enter into an investment of that magnitude without due process since it also has an active board of directors.

Kolawole said he was convinced that CBN would not have gone into such investments without taking care of the administrative processes, which the probe panel was mandated to examine.
He, however, stated that he would not dismiss the probe as a waste of time, because along the line, opinions could be expressed, which may be helpful in the way things are done in the apex bank, adding that it could equally help the CBN improve on the way it operates as an institution.

“I know that CBN Governor did not wake up one morning to write a cheque for $480million to invest in AFC. But what I think they want to determine is whether due process, the rule and Act of the CBN was complied with. But I would advise the Federal Ministry of Finance or any of the government agencies conducting the probe to take note of the processes and procedures when the decision to invest in AFC was taken, and if the processes were complied with, then they should just let go,” Kolawole said.

On the effect of the latest development on the other investors in the project, the former CIBN boss said that he was optimistic that other Nigerian banks that invested in AFC should not be discouraged by the probe, since they did not go into it in the first place because of the CBN, but basically on account of what they stand to gain from the investment.

Chief Kolawole said that if the investment was profitable at the end of the day, the banks would enjoy it, since it is profit that determines where people should put their money. He argued that if the banks know they would make money out of the investment, then there was nothing to worry about the probe of the apex bank.
He also dismissed sentiments that other countries might take advantage of the probe to buy off CBN’s controlling shares.

Also commenting on the mandate given to the five man committee inaugurated last week by the Attorney General of the Federation, Mr Emmanuel Aandokea, Mazi Okechukwu Unegbu, another former president of the CIBN, said it may be difficult for decisions on such huge investment to be taken without the Board of the Central Bank of Nigeria deliberating on it properly and agreeing on a course of action.
He, however, said the probe may just be to confirm that due process was not compromised, adding that it should not distract the CBN from giving direction to the economy and the banking industry as it has always done.

Dr. Walter Ofonagoro, former minister of Culture and Tourism said: “Bayo Ojo, Nigeria’s former Attorney General signed the AFC document on behalf of the government and he is well qualified to do just that. For instance, when I was the minister of culture, all cultural agreements were signed by me, so any minister can sign for the government and it will be binding. And anything that has to do with financing can be signed by the Attorney General of the Federation or the Minister of Finance.”

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Fay(Katy, Texas, US)says...

Actually translates to bravehearted.