Date Published: 09/10/09
Sanusi’s Bank Tsunami: Lessons from other ‘revolutions’
By Jideofor Adibe pcjadibe@yahoo.com
Since 14 August 2009 when Sanusi Lamido Sanusi, Governor of Central Bank, sacked the chief executives of five banks – Intercontinental, Oceanic, Afribank, Union Bank and FinBank - for allegedly awarding non-performing loans to the tune of N780 billion, supporters of the Governor have tended to describe the move in revolutionary terms. Given the zeal and gusto with which the CBN boss pursues the programme, including a promise to resign if the move turned out to be wrong, it appears he too believes the move is revolutionary. But are ‘revolutions’ really worth the effort?
Revolution, derived from the Latin word, revolutio, meaning "a turn around", implies a fundamental or radical change in power or organizational structures that takes place in a relatively short period of time. The goal of any revolution is often lofty and populist – a desire to quickly change the society or its institutions for the better. However, the tendency for revolutionists to use a very simplistic approach for a highly complex problem usually means that when the dust settles after the revolutionary flourish, so many unintended consequences usually beget the question of whether the entire effort is worth it. Consider the following examples:
The American War of Independence (1775-1783) was spurred by a noble protest against taxation without representation. Though America’s victory helped to spread a belief in the principles of republicanism, it also sharply polarised the country and subsequently led to a bitter civil war. Some critics today argue that looking at how America has shaped up since independence in terms of education, freedom of expression and quality of life, it is not substantially different from Canada, Australia and New Zealand, which did not follow such a revolutionary path. The cost of the war was also to bankrupt France, without whose military and financial support, America would not have won the war.
There was also the French Revolution (1789–1799), fought primarily to overthrow absolute monarchy with its feudal privileges for the aristocracy and Catholic clergy. The revolution, fought under the noble ideals of ‘freedom, equality and fraternity’, quickly became a caricature under Robespierre and his Reign of Terror. Not only did the revolution fail to give France a representative government by the people, or prevent a rapid return to autocratic rule, ‘revolutionary’ France also fought the most savage of all wars in the 1790s to preserve slavery in Santo Domingo (present-day Haiti and Dominican Republic). So much for freedom, equality and fraternity! In fact, some historians today regard the French Revolution as a terrible waste of time and blood because whatever positives came out of it were equally accomplished by many countries such Britain and America with much less bloodshed.
Again consider the Russian Revolution - a collective term for the series of revolutions in Russia in 1917, which succeeded in destroying Tsarist autocracy and creating the Soviet Union. Today, the Soviet Union has since imploded and Russia is not more democratic or more economically advanced than most other European countries that did not embark on such a revolution. Many historians today question whether there was indeed any benefit from that revolution, which led to the loss of millions of lives and replaced Tsarist autocracy with other dictators – from Lenin and Stalin to Putin.
Consider equally the Iranian revolution that toppled the rule of Mohammed Reza Shah some 30 years ago. The revolution ushered a period of unprecedented hostility to the West and helped to radicalise the Middle East. Almost overnight, the West's most steadfast ally in the Muslim world became a violent and volatile enemy, where mass crowds raised their fists to chant "death to America". Within months of the revolution however, the euphoria had evaporated as rival factions began a brutal battle for the control of the country, which ended with a repressive state that imprisoned and executed thousands of political prisoners – including many of the revolutionaries. Today some Iranians, including those who participated in the revolution, openly wonder whether it was worth it and what the country really achieved from it.
In Nigeria, benefits from what could be called our own ‘revolutions’ are also questionable. Consider these two instances:
In 1966, Major Chukwuma Nzeogwu’s Supreme Council of the Revolution of the Nigerian Armed Forces, which said it wanted to “establish a strong, united and prosperous nation, free from corruption and internal strife”, ended up unleashing forces that culminated in a civil war. Today, more than forty years after Nzeogwu’s ‘revolution’, Nigerians look with nostalgia to the society the young Majors riled against.
There was also the Buhari regime and its signature War Against Indiscipline. Buhari’s declaration that “this generation, and in deed future generation of Nigerians have no other country but this. We must remain here to salvage it together”, is widely regarded as the most patriotic sentiment ever uttered by any Nigerian leader. However, in the name of overhauling the society for the better, Buhari’s thin moustache quickly became a veneer symbol of dictatorship. He repressed the press, sacked civil servants with impunity, disregarded the federal character principle in appointments and engaged virtually everyone and every social group as an enemy. By the time he was toppled in 1985, he had become such an odious figure that Nigerians yearned for liberation from him.
From the above, it would seem that the system dynamics in most countries favour evolutionary social progress rather than a revolutionary one. While the philosophy of most revolutions has an emotional appeal, in reality, only few revolutions are successful or worth the effort. With regards to Sanusi’s ‘revolution’ in the banking sector, there are a number of observations:
One, as criticisms of the way Sanusi handled the situation continue to grow, crucially overlooked is that he has scored a major victory in taking control of framing the discourse. These days it has become axiomatic to talk of ‘the crisis in the banking sector’, ‘sanitising the banking sector’, or ‘the rot in the banking sector’ when discussing Sanusi’s recent interventions. This implies an acceptance, without debate, of Sanusi’s position that that there is a crisis in the banking sector, when prior to August 14, not many people felt so.
Two, while critics of Sanusi accuse him of harbouring a Northern agenda, there is also a possibility that the CBN Governor could be a victim of ethnic and sectional prejudice – a certain belief that intelligence has ethnic/regional character, and that people from certain sections of the country are lower in the intelligence hierarchy. Some openly question whether Sanusi has sufficient theoretical groundings in economics and finance for the position he occupies.
Three, there are some who suspect Sanusi of being a closet Islamist, and for who every move by him must be closely scrutinised. This set of critics for instance wonder why, after resigning from Merchant Bankers (now Intercontinental Bank Plc), where he rose, after about seven years, to become Area Manager, Kano Area Office, he took the unusual step of going to Sudan for a bachelor’s degree in Arabic and Islamic Studies. Sanusi remained in Sudan (a country that is often associated with radical Islam and where Osama bin Laden once lived) between 1991 and 1997. He returned to join UBA as a Principal Manager 2 in the Credit Risk Management division. His critics continue to suspect the essence of that study, which had apparently nothing to do with his career.
Four, Sanusi has not helped the suspicions around him by the peculiar manner he carried out the banking tsunami. That an article by the Vanguard in March 2009 accurately predicted the manner in which the five banks were taken over appears to further strengthen the suspicion about his agenda. The matter is not helped by his apparent determination, in concert with a suddenly rejuvenated EFCC, to prevent the accused from giving their own sides of the story.
Five, if criticisms of Sanusi accentuate the legitimacy crisis around the Yaradua regime, the president is likely to withdraw support for him, especially if there are revelations that Sanusi, while boss of First Bank, had been guilty of the same offence for which he sacked the bank executives. Already one newspaper has alleged that while at First Bank, Sanusi gave a N1.57 billion loan to a newspaper publisher introduced to him by Mallam Nassir el - Rufai, the former boss of the Federal Capital Territory.
Six, going by our history, it is most likely that the Sanusi ‘revolution’, if continued, will certainly be reversed after the Yaradua regime – the same way the bank consolidation is being surreptitiously challenged now and previous controversial policies such as Ironsi’s Decree No 34 and the sale of some choice property and state-owned enterprises under Obasanjo were reversed after regime change.
Seven, if the Sanusi revolution is not pursued to its logical conclusion, it would leave anarchy in its wake while widening the north-south divide. On the other hand, if it succeeds, it would be difficult for the average Nigerian to have a feel of this success - unlike the bank consolidation, which led to such visible innovations as the introduction of ATMs and online banking. This means in essence that it is not going to be easy for Mallam Sanusi Lamido, especially if he continues with his predecessor’s style of hugging the limelight and seeing himself as a celebrity.
Jideofor Adibe is editor of the multidisciplinary journal, African Renaissance and publisher of the London-based Adonis & Abbey Publishers Ltd (www.adonis-abbey.com).
