The Fading Glory of NESG
By Joy Nguri
The recent outburst by the Nigeria Economic Summit Group against the Central Bank of Nigeria (CBN) did not come to me as a surprise. Indeed, it was long expected. The concern expressed in the press release entitled “Matters of Urgent Attention” was nothing but a frustration bottled up over years. It was expected since the Bank suspended forex from some 41 items which it later upped to 43.
It must be noted that the establishment of the body years back was indeed noble when championed by seasoned businessmen and private sector players, such as Pascal Dozie, Ernest Shonekan, Dick Kraemer (an American who adopted Nigeria as his home), Dotun Philips, Mahmud Waziri, Muhammed Hayatudeen and a host of other hardworking and patriotic Nigerian private sector decent men with the aim of working with the government in the formulation and implementation of economic policies that would drive Nigeria to become a respected economic power, not only in Africa, but globally.
These men struggled and collaborated selflessly with successive governments both military and democratic, but unfortunately, the noble founders of this group have since died, aged or related, while new set of chronic vultures and economic vampires have since taken over the once noble group with the aid of some of their equally parasitic media allies.
The unfortunate press release has further exposed their satanic motive as a group that has become a veritable instrument for peddling influence for personal benefits, foreign exchange roundtripping, unbridled importation, over invoicing, smuggling, and dumping of substandard goods. They have deviated from purpose of the body that was to look at what could be responsible for national job deficits in the country, and a possible way of making sure that, the national framework is provided, as well as, defining same reviewed framework for the purpose of exploring economic opportunities that have existed in most of the priority industries in the country.
Typical of vultures, they have gathered to devour. The same group in 2017 veiled their demonic intention when they in concert with the Lagos Chambers of Commerce and Industries (LCCI), another comrade group in merchandising, launched a vociferous and sustained attack on the CBN when it suspended 41 items from its forex official window. They are the wailing wailers who profited from the old order, and have not forgiven the CBN Governor, Godwin Emefiele, for his audacity to snatch away their meal tickets of unbridled importation of rice to textile and toothpick. They lived off the fortunes poor Nigerians, and now that the straw has been taken off their ‘long throat’ they have resulted to sheer campaign of calumny.
They are supposed to be industrialists, but how many of them own a business endeavour that employs jobless Nigerians? I asked this question when LCCI took this inglorious path few years pass, and up till now my query is yet to be answered. They are hyenas that made millions of Nigerians jobless, they shut down and took over factories of motor assembly plants, textile mills, tyre making factories, etc, making many millions of Nigerian families hungry. Why won’t they mount up in arms against the Emefiele led-CBN on account of their illegal and obnoxious businesses that have had their accounts blocked. Presently, some of them are being investigated.
They were also up in arms when the CBN sanctioned MTN few years pass with the same Business newspaper as their mouthpiece. You ask, what do they really want? They no longer have access to forex to import those items suspended by the CBN in order to arrest exportation of jobs, grow what we eat, and eat what we produced. Godwin Emefiele got their fingers burnt when he plugged forex round-tripping routes. Emefiele’s unforgiven sins were the cancellation of third part Form ‘M’ processing, shutting of bank vaults against them with the introduction and implementation of the Bank Verification Number (BVN) as many of them who are chronic bank debtors have been caught and money owed are being recovered. However, despite the destructive Coronavirus pandemic and their errant ways, the Nigerian banks under Godwin Emefiele’s watch remained resilient.
It is thus mind boggling that these socio-economic hyenas could embark on this inglorious voyage purposely to veil their displeasure at Emefiele’s audacious nationalistic posture to reset the economy.
As we all are aware, COVID-19 impacted negatively on countries across the world, resulting in a significant downturn in the global economy. Consequently, countries including Nigeria were forced to impose lockdown measures in order to contain the spread of the pandemic. This action resulted in depressed economic activity in the first half of the year. Except for China and Vietnam, advanced, emerging and frontier market economies, all experienced significant negative growth in the first half of 2020, and some are currently in a recession. In response to the pandemic across the globe, central banks embarked on individual measures targeted at stabilizing their respective economies by reducing lending rates, which declined to negative territory in several advanced economies. This in addition to increasing the scale of their asset purchase programmes. The Central Bank of Nigeria like its peers across the world had to embark on extraordinary measures in order to stabilize the economy from an extraordinary shock.
Emefiele’s Nigeria central bank took steps to increase the flow of credit to critical sectors of the economy, in order to enable faster recovery of the economy. He also sought to prevent the economic crisis from spilling into a major financial crisis by taking the following actions among others: a 1-year extension of a moratorium on principal repayments for CBN intervention facilities; ii. Strengthening of the Loan to Deposit Ratio policy, which has resulted in a significant rise in loans provided by financial institutions to banking customers. Loans given to the private sector, have risen by over 21 percent over the past year. iii. Creation of N50 billion Target Credit Facility for affected households and Small and Medium Enterprises through the NIRSAL Microfinance Bank; iv. Creation of a N100 billion intervention fund in loans to pharmaceutical companies and healthcare practitioners, intending to expand and strengthen the capacity of our healthcare institutions; v. Creation of a research fund, which is designed to support the development of vaccines in Nigeria. vi. a N1 trillion facility in loans to boost local manufacturing and production across critical sectors; vii. Regulatory Forbearance was granted to banks to restructure loans given to sectors that were severally affected by the pandemic viii. mobilization of key stakeholders, code-named Coalition Against Covid-1, CACOVID, in the Nigerian economy, which led to the provision of over N23bn in relief materials to affected households, and the setup of 39 isolation centers across the country.
The effect of these measures which included provision of palliatives to individuals affected by the pandemic, increase in access to credit to critical sectors of the economy that are either high employers of labor or have the ability to create jobs at a fast pace, helped to contain a significant decline in GDP growth in Q2 2020. Though analysts expected GDP growth to decline by 7.4 percent, but the impact of mitigating measures taken by the monetary and fiscal authorities helped to reduce the decline to 6.1 percent. This decline was far less severe to these wailers expectation than the decline experienced in other economies such as the United States, South Africa, and India which saw significant declines in growth by 32 percent, 52 percent and 23 percent respectively. With the proactive response of the CBN, the fiscal authority with their less impressive response to the pandemic was able to boast that with gradual phase out of the lockdown measures, the GDP growth would be much better in the Q3 than experienced in the 2nd quarter. All credit to the CBN management.
If not mischief by these frustrated hungry vultures, trying to hoodwink Nigerians, relations between both organizations had always been cordial, thus, it was expected of NESG to raised its concerns directly with the CBN, but never did. Instead, they embarked on macabre dance, leaking the content of their shameless and warped concern to their comrade in mischief, a leading Business Newspaper, which some of the group members have investments. So it was, when the CBN sanctioned MTN and four banks, involved in illegal remittances without the express permission of the Bank. It is thus paradoxical that the same NESG’s tacitly admitted that many central banks around the world were also engaged in similar response as the CBN.
The CBN under its current Governor on assumption of office pledged the CBN under his watch would be people- focused ensuring that the Bank serves the development needs of Nigeria, and Nigerians, hence its deployment of necessary development finance initiatives to address the credit needs of the sectors critical to improving livelihoods, reducing poverty, and promoting inclusive growth. These objectives became more imperative in light of the significant shocks to the economy following the ongoing COVID-19 pandemic. In pursuit of transparency, the CBN had not ceased publishing disbursements made under these activities in its Economic Reports.
It is also obnoxious that the NESG failed to note that CBN’s intervention programmes, particularly in agriculture, were a key contributor to the resilience of the agricultural sector during the crisis, as the sector experienced positive growth of 1.6 percent in Q2 of the year despite the lockdown. Though the NESG pretended not to be aware of that. Due to COVID-19 pandemic, Vietnam, Cambodia, India, and Thailand placed export restrictions on the exports of critical food items, including rice and eggs, and with these disruptions, the Nigerian economy could have faced a major food crisis, but for the government’s intervention programmes in the agriculture sector.
Furthermore, by alluding to the fact that money cannot address constraints in the agriculture sector, the NESG failed to realize that access to credit is listed among the three major challenges faced by farmers and businesses in Nigeria. However, NESG in its action plan under the new rubble-rousing wailers has not done anything worth mentioning, compared to what it criticized. Rather than urging and encouraging the Federal Government to urgently address issues of access to electricity and logistic constraints faced by businesses, castigating CBN became their preoccupation.
The CBN had often been accused of chewing more than it can chew, however, had CBN not intervened in critical sectors, it can better be imagined where the country would have been today with the pandemic crisis. Rather than finding fault where there is none, it is quite expedient for the CBN to address an area it had sufficient ability to impact upon, given the nature of the crisis the country faced, that is, improving the flow of credit to critical sectors of the economy.
It is quite obvious that the NESG, under its current leadership, has fallen short of its own standards and become a shadow of its old self. No wonder four bank chief executives quitted the group citing failure of corporate governance at NESG. They were irked that the group made such an announcement without input from
all its directors, instead, the Summit group selected to work with few members of the board, one of whom is a publisher.
According to them, as CEOs of banks they were always in full consultations, weekly, with the CBN on policies that concern both the banking sector as well as the economy, and in most cases, their institutions’ act as participating financial institutions in most of the Central Bank’s development finance interventions. And since the outbreak of the pandemic, the Bankers’ Committee has been meeting more frequently, almost every week, virtually, to discuss matters bothering on the economy.
“Given that we have such full access, how can we turn around and issue a statement criticizing policies that we are part of the consultative process? If we have concerns, we have the full access and platforms to share them with policy makers. How would the NESG issue such a statement without the input of Board members”, they lamented.
It is thus my candid opinion to the mischief makers, that there are better ways to resuscitate a Group’s brand other than embarking on cheap popularity and tarnished attention, using ambushed press statements made up of contrived allegations. It is quite obvious that the path NESG took was a glaring misadventure, which they know better. Their allegations were not only spurious, but reflective of sinister motives and malicious intent but Nigerians know better.
Joy Nguri, writes from Numan, Adamawa State