Foreign banks await new CBN gov, halt credits
By Enitar Ugwu
ANXIETY over the governorship of Nigeria's Central Bank (CBN) is no more limited to the nation's financial circles or its borders. And whereas government may not be in a hurry to name a new governor or renew the expired mandate, signals from the immediate financial institution, commercial banks, indicate some strides close to fever point.
For the Nigerian banks are finding it difficult to get fresh credit lines or have existing ones extended by their foreign counterparts, which are waiting supposedly for the new economic direction of the Federal Government under a new governor of the bank.
Senior officials of some Nigerian banks, who spoke on the delay of the pending appointment at the apex bank as Prof. Chukwuma Soludo's tenure expired last weekend, told The Guardian at the weekend that their foreign partners had developed cold feet towards transactions emanating from Nigeria.
According to the banks' chiefs, the last three months have been very challenging for their organisations as several attempts to secure fresh credit lines or extend running ones had been unsuccessful with the foreign banks.
The foreign investors' attitude is allegedly hinged on fears that the present monetary and fiscal policies might be changed by a new CBN helmsman, since every new leader in the country has the tendency to discontinue with the policies of his/her predecessor.
The Guardian learnt that almost all the foreign banks that extended credit lines to the local banks have refused to rollover such facilities owing to uncertainty clouding the appointment.
Prior to this development, a new CBN chief was usually named a month to the expiration of the tenure of the incumbent.
Former President Olusegun Obasanjo approved Soludo's appointment on April 29, 2004, but he did not assume office till May 29, 2004 when Chief Joseph Sanusi's tenure ended.
Soludo took over as CBN governor on May 29, 2004 for a five-year tenure, which effectively ended last Friday.
It was also learnt that since last March, persuading most foreign banks to renew their credit lines with their Nigerian partners had become an uphill task, and this development is hurting the operations of the local banks.
They (foreign banks) were also quoted as saying that when eventually a new CBN governor emerges, it would take him at least two months to unfold his policies, a period foreign investors would have analysed his thinking and know what investments to make.
The delay in naming a CBN chief is also allegedly being compounded by the CBN Act of 2007, which stripped the President of the sole power to appoint the apex bank governor. Section 8 of the Act stipulates that "the CBN governor and the deputy governors shall be persons of recognised financial experience and shall be appointed by the President, subject to confirmation by the Senate and such terms and conditions as may be set out in their respective letters of appointment."
All through last week, there were speculations on whether Soludo would be re-appointed for a second term or a new governor named with various names thrown up.
Among those tipped for the job were Alhaji Lamido Sanusi, the Managing Director of First Bank Plc, Obadiah Mailafia, a former Deputy Governor of the apex bank, Bisi Ogunjobi, Vice President of African Development Bank (ADB); Jibrin Isa, an executive director of Afribank Plc; and Alhaji Ibrahim Dankwabo, the Accountant-General of the Federation (AGF).
