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Nigeria Freezes Accounts Of Sacked Bank Chiefs As Depositors Make Panic Withdrawals
The Nigerian anti-graft agency said Saturday it had frozen the accounts of the sacked directors of five ailing banks for running the institutions into insolvency.
“We have frozen the accounts of the former managing directors and executive directors of the five banks,” Economic and Financial Crimes Commission (EFCC) spokesman Femi Babafemi told our correspondent
He said the agency had also invited the auditors of the affected banks for questioning.
“The auditors have to tell us what they know about the financials of the banks. How they came about huge debts and non-performing loans without the auditors raising the alarm,” he said.
The heads of Afribank plc, Intercontinental Bank plc, Union Bank plc, Oceanic Bank plc and Finbank plc were removed on August 14 by the Central Bank of Nigeria governor, Sanusi Lamido Sanusi, for piling up billions of dollars in bad debts and inefficiency.
The CBN accused the banks’ management of granting loans to prominent Nigerian businessmen and companies without following best practice.
The total loan portfolio of these five banks came to N2,801.92 billion, according to CBN.
Margin loans amounted to N456.28 billion and exposure to oil and gas loans amounted to N487.02 billion while aggregate non-performing loans stood at N1,143 billion, it said.
The EFCC has given the debtors one week to pay up or face arrest and prosecution.
Meanwhile, panic withdrawals by depositors and a thick cloud of uncertainty are shaking Nigeria’s financial sector after the sacking of the directors of five key ailing banks, operators and analysts said.
Central Bank of Nigeria (CBN) governor Sanusi Lamido Sanusi earlier this month removed the heads of Afribank, Intercontinental Bank, Union Bank, Oceanic Bank and Finbank for piling up billions of dollars in bad debts.
The books of about a dozen other banks are also currently under CBN scrutiny to determine their viability, debts and liquidity status.
“There are apprehensions in the industry on what will be the fate of the remaining banks because of CBN’s action,” a treasury manager in one of the nation’s banks, Sunday Adeola, told our correspondent.
The dismissals of the bank chiefs and the anti-graft agency’s threat to arrest, prosecute or seize property of the debtors of the banks if they failed to pay in a week has put the heat on the sector, analysts said.
“The… system has witnessed massive cash outflows in recent days. Depositors are jittery and they are withdrawing their money,” said analyst Joel Allison.
“Bank vaults are becoming empty and if the trend continues we may have another bank failure on our hands,” he said, recalling the liquidation of dozens of distressed banks in the 1990s after bad management and fraud.
Dozens of the owners and managers of those failed banks were prosecuted or jailed while others fled the country to evade arrest.
The CBN chief earlier this month accused the management of the five ailing banks of giving loans to prominent Nigerian businessmen and companies without adhering to good corporate governance and risk management practices.
He put the total loan portfolio of the ailing banks at N2.8 trillion.
The CBN has also published a list of dozens of prominent Nigerians businessmen as debtors to these banks.
The list includes tycoon Aliko Dangote, rated by US Forbes magazine as one of the world’s richest Africans with a net worth of around $3.3 billion.
Dangote, 52, who is also the new president of the Nigeria Stock Exchange (NSE) has denied managing the oil and gas company listed as owing Intercontinental Bank more than eight billion naira.
The Nigerian government has in the past days tried to calm the nerves of agitated bank depositors by assuring them that their money is safe and that it will not allow the debt-ridden banks to sink.
The government has already announced a N400 billion naira bailout for the affected banks.
Nigeria’s central labour movement NLC lauded Sanusi’s action, and urged the CBN to restore public confidence in the industry.
Rasheed Yusuf of the Association of Stockbroking Houses of Nigeria also called for proper management of the situation “in a way that the market will not be jeopardised.”
The confusion in this important sector of the Nigerian economy is further exacerbated by the fact that three key players — Dangote, NSE director general, Ndi Okereke-Onyiuke and International Bank’s ex-boss, Erastus Akingbola were listed by the CBN as bank debtors.
Okereke-Onyiuke is also a director in Transnational Corp, a failing conglomerate, which the CBN says owes Union Bank about N31 billion.
Five years ago, in a bid to shore up the capital base of these financial institutions, the number of banks was cut from more than 90 to 25 solid ones.
The figure later dropped to 24 when two of the banks merged.
But that early caution appears to have dissolved in more recent times and the global economic crisis has made the credit crunch that much tougher.
Mindful of the 1990s banking crisis, weary Nigerians are being cautious.
“Yesterday I took all my money from my bank to avoid possible unpleasant consequences,” said Femi Afolabi, a Lagos hotelier, who lost almost three million naira in 1995 when his bank failed.
For Etim Effiong Queen , survival meant making an impossible choice: leaving her daughter behind to save her from a tradition she feared would change their lives forever.
Rivers State Governor, Sir Siminalayi Fubara, has demanded quick and full resolution to the challenges arising from the gas leakage that occurred in Bille, Degema Local Government Area of the State.
The governor has also pledged to upgrade the Primary Healthcare Centre (PHC) in Bille with a view to addressing the health challenges confronting the community.
Fubara made the pledge on Wednesday at the Government House, Port Harcourt during an enlarged meeting of key stakeholders, comprising representatives of the Federal Government, the state government and leaders of the community.
The meeting was held to review the situation in the community and explore available opportunities to save the people from the adverse impacts of environmental pollution.
Addressing the journalists at the end of the meeting, the governor acknowledged the determination of the Federal Government and its agencies to get to the root cause of the problem in Bille and ensure that it is resolved permanently.
“The meeting is in respect of the situation in Bille. You’re aware that there is a case of gas leakage somewhere in Bille and the people have been making some requests that the government should come to their rescue to resolve the situation.
“As a state, we have gone to see the situation in the community, not alone but in conjunction with the industry operators and officials of the Federal Ministry of Petroleum Resources. What we are doing today is an enlarged meeting where all the parties are sitting together to look at the cause of the issue and the most possible way to get the problem resolved,” he said.
Fubara described the outcome of the meeting as successful, stressing that more action would be taken in the next couple of weeks to ensure that the issue is fully resolved.
The Minister of State, Petroleum Resources (Gas), Hon Ekperikpe Ekpo, who led the Federal Government’s delegation to the meeting, expressed appreciation to the governor for his warm hospitality and efforts to address the challenge in Bille community.
Ekpo explained that contrary to the perception in certain quarters, the Federal Government has not been silent over the “gas seepage” but has been working tirelessly towards finding a sustainable solution.
The minister explained that as soon as the incident was reported, the Federal Government deployed experts to the area to understudy the cause of the problem.
According to him, it was difficult at first to understand the cause of the problem since there were no oil or gas infrastructure within the vicinity of the incident, hence the need to conduct a more detailed investigation.
“The investigation is still going but we decided to do a follow-up visit to the area to talk to the people of Bille Community that we need collaboration on their part so that we would be able to arrive at a lasting solution.
“The safety of the people is paramount. We can understand their anxiety, the worry and the danger that this thing poses within the area, but the Federal Government is committed to finding a lasting solution to the problem. The primary responsibility of government is to take care of the welfare and security of the people and that is exactly why we are here to go and see things for ourselves,” he said.
The Chief Executive Officer (CEO), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mrs Oritsemeyiwa Eyesan, also explained that as the regulatory agency at the centre of the issue, no effort will be spared in the task of resolving the issue.
Eyesan pledged that the NUPRC and operators in the industry were prepared to address the requests of the impacted people in terms of the provision of potable water and fire trucks to the community.
The Public Relations Officer, Council of Chiefs, Bille Kingdom, Chief Rena Dappa, had during the meeting, presented the challenges facing the community and pleaded for government’s support to save the lives and livelihoods of the people.
President Bola Tinubu has announced the launch of a training programme for 5,000 young Nigerians as meter installers and technicians under the Presidential Metering Initiative.
The President stated that the scheme is aimed at creating jobs, closing the country’s metering gap and improving electricity supply.
The President disclosed this in a statement on his verified X handle yesterday, describing the initiative, tagged “The Power Force,” as part of his administration’s Renewed Hope Agenda to expand employment opportunities for young people.
According to Tinubu, the programme will equip participants with practical technical skills and connect them to employment opportunities in Nigeria’s power sector.
“Through the Presidential Metering Initiative (PMI), which I established to close Nigeria’s metering gap, end estimated billing, protect consumers and strengthen the electricity market, we are opening a new pathway for 5,000 young Nigerians to be trained as meter installers and technicians under The Power Force. This programme is about jobs, skills and dignity,” he said.
Tinubu said the training would be open to eligible Nigerians who have completed their secondary school education, with a dedicated quota reserved for members of the National Youth Service Corps.
He noted that expanding electricity metering was critical to improving service delivery and promoting transparency in the power sector.
“When homes and businesses are properly metered, Nigerians can pay for what they actually use. When electricity distribution companies collect revenues more transparently and fairly, they are better able to reduce losses, maintain infrastructure, expand connections and invest in better service.
“This is how we build a power sector that is fairer to consumers, stronger for investors and better able to deliver reliable electricity to the Nigerian people,” the President said.
Tinubu said he had directed the Presidential Metering Initiative to work with the Federal Ministry of Youth Development, the National Power Training Institute of Nigeria, and other relevant stakeholders to commence the programme within the next 30 days.
He encouraged qualified young Nigerians to apply, saying the initiative would provide them with marketable skills while supporting efforts to eliminate estimated billing and improve electricity access nationwide.
“I encourage eligible young Nigerians to apply. Join The Power Force. Learn a skill. Earn with dignity. Help us end estimated billing and be part of the work to light up Nigeria,” he added.
