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Corruption index:Rotten banks drag Nigeria down

Posted by Eddy Etuk on September 25, 2009 at 1:39am
Nigeria made an unimpressive performance in the fight against corruption in a global report released by Transparency International.The country was ranked 121 among 180 countries investigated.The 121 position of Nigeria in the 2008 report may not be unconnected with the crisis facing the banking sector over the years.The report was particular in focusing on that sector, noting that it “has a long history of corruption.”Drawing attention to the history of corruption in the banking sector and several failed efforts to stem the tide over the years, Transparency International blamed the “lack of efficiency and effectiveness on the part of the bank regulatory authorities in the country.”The report further blamed the situation on the slowness of investigation and prosecution.“The situation is further compounded by the slowness of the investigation and prosecution process in Nigeria it said.”To buttress its conclusion, it drew attention to statements credited to the Chairman of the Economic and Financial Crime Commission, Mrs Farida Waziri when in December 2008, she “lamented that the courts were frustrating the ant-corruption war in Nigeria.”While saying corruption was responsible for “the collapse of many banks in the 1990s and losses to many depositors and stakeholder,” it noted that “the failures were a result of fraud committed by bank owners and managers, who had: granted unsecured loans, resulting in high levels of bad debt and loss of liquidity; failed to maintain a strong capital base; granted unsecured loans to friends and bank owners or managers; and in some cases, embezzled funds outright.”The organization noted that the amended ‘Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree 1994 resulted in a protracted and complex chain of events that had still not resolved by September 2008” when the report was compiled.The report cited several cases of power game among bank executives that often result to failures in the sector. Such cases mentioned include that of Mr. Adebisi Omoyemi versus Chief Samuel Adegbite at Wema Bank. It mentioned the alleged role of Omoyemi at the Nigeria Deposit Insurance Corporation (NDIC) when he was accused of blocking “unfettered access to the books and record of the bank in a manner that was tantamount to obstructing their duty.”Another case cited was that between Omoyeni and former deputy governor of Central Bank, Tunde Lemo whom Omoyeni accused of “colluding with NDIC to ‘kill Wema Bank” This case was in addition to that of Triumph Bank on July 11, 2008 when the Managing Director, Francis Atoju and three others were arraigned before a Federal High Court in Lagos.
Tags: banks, corruption
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