25 November 2011
Mr. X worked for a Nigerian bank for nearly 20 years, rising to a senior management level. Last year during his annual leave, he received a message telling him not to bother returning to the bank; he had been sacked. Ms. Y came to office one early morning as she usually did, sat down on her desk and powered her computer, only to find out that the password had been changed. She had also lost her job.
Despite the marble buildings, glass cladding, sleek cars, glib adverts and billions of assets on paper, it may come as a surprise to many that Nigeria
's banking sector which employs only about 500,000 people – despite the nearly N1 trillion of public funds used to stabilise several ailing banks last year, is still shedding jobs. When a sector cannot hold on to its own jobs, how can it possibly act as the catalyst for development, growth and job creation?
What went wrong? Why are our banks neither aggressively mobilising savings nor lending for real sector growth? Why do we seem to go through cycles of banking distress and failures every 10 years or so? Why are interest rates being raised unreasonably high mainly to protect the exchange rate? Why do we seem to rely on the CBN intervention to fund sectors at affordable interest rates, while the deposit money banks are doing little or nothing? How can banks declare all those billions in profits yet are not able to provide affordable long-term credits?