Banks to be fully capitalised by Sept end – CBN say

“No more concessions on imports, by Finance Minister”

LAGOS — Central Bank of Nigeria Governor, Mr. Lamido Sanusi, yesterday, in Washington DC, said by the end of this month, all banks would have been fully capitalised and that non-performing loans of all banks would be reduced to five per cent due to the intervention of Asset Management Company of Nigeria AMCON.

Speaking at a seminar on “Beyond the Banking Reforms” put together by Thisday Newspaper at the ongoing IMF/World Bank meeting, he said that beyond the resolution of the banking crisis was the challenge of pushing hot money into the economy that would put pressure on prices and the eventual general increases in the prices of goods and services in the country.

He said AMCON has bought over non- performing loans of banks to the tune of N3 trillion at a time the Federal Government embarked on expansionary fiscal policy.

Sanusi said spending from government quarters as it stands now, and banks lending after the clean-up of their books of bad debts will result in excess liquidity in the economy that will lead to inflation and rising interest rate.

He said: “Though the Ministry of Finance has plans to rein in government spending, it can only be realised in the medium to long term.

“In practice, fiscal retrenchment cannot hold in the short-term as political actors around the world,  once used to a pattern of expenditure will always like to stick to it.”

He said in the interest of the economy and the nation, there was need for greater collaboration and coordination between fiscal and monetary authorities to deliver better policies to move the economy forward. He lauded Dr. Ngozi Okonjo-Iweala, Minister of Finance and Coordinator, Economic Team, saying that those who said they cannot work together will be disappointed because he is in agreement with  policies the minister has put in place.

Giving insights into the transformation agenda of the Jonathan administration, Okonjo- Iweala said in a bid to halt policy inconsistencies, the private sector will no longer be allowed individual concession from the president.

“All those who usually go to see the President at night will no  longer be allowed to do so. If they have any proposal, it must be presented to the Economic Team. We are also going to hold a retreat with the private sector to discuss policy inconsistencies caused by the pressure they exert on the government.”

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BY OMOH GABRIEL 

-Vanguard