The Central Bank of Nigeria has identified General Ibrahim Babangida's myopic and corrupt policies for the weak financial position Nigeria now finds itself in. It's top official asserts if it was not for Babangida, Nigeria's financial structures would have been stronger.
Deputy Governor of the Central Bank of Nigeria (CBN) in charge of financial sector surveillance, Mr Tunde Lemo, has blamed financial sector liberalisation of the late 80’s (Gen Ibrahim Babangida’s regime) for the corruption, mismanagement and unhealthy competition in the industry.
“It was the liberalisation of the financial sector in the late 80’s that resulted in phenomenal increase in the number and complexity of banks and non-bank financial institutions in Nigeria. This engendered unhealthy competition, ineffective internal control systems, weak corporate governance and other sundry malpractices. There was also unnecessary poaching of the few qualified personnel in the industry.
“Consequently, we had many fragile, small an uncompetitive banks haunted by corruption and mismanagement. The system was characterised by low depositor confidence in many of the banks, which could not support the economy. “Consequently, some of the banks, to an extent, aided the perpetration of financial crime through some undercover banking where identities of the customers were concealed in cutthroat attempts to lure and retain depositors and investors”, Lemo who spoke at the ongoing Second West Africa Financial Crime Prevention Conference organised by IFEX Training, London in collaboration with Financial Institution Training Centre (FITC) and West African Banking Association (WABA) in Abuja, said.
He, however, expressed satisfaction that the consolidation in the banking sector, which kicked off on July 6, 2004, had greatly positively impacted the fight against financial crimes and corruption.
“On July 6, 2004, the CBN announced a new regime of reform policy hinged on banking sector consolidation and aimed at ensuring the safety and soundness of the banking system as well as improving its transparency and accountability. This policy, therefore, was the concrete needed to re-enforce the fight against all forms of financial crimes”, he said.