The Chairman of Nigeria’s Economic and Financial Crimes Commission, EFCC, Mr Ibrahim Magu has led the Buhari’s government’s fight against corruption in a way that is reminiscent of the days of Nuhu Ribadu, the commissions first Chairman.
He has been on the fore front of a number of high-profile arrest of politicians in the former Government of Goodluck Jonathan including that of the previous National Security Adviser, Sambo Dasuki. His roll call now includes, former Army Generals and senior officers, past and current governors, former ministers just to name a few.
His methods have often been questioned by the opposition and their sympathizers alleging that it is often one-sided, illegal and one-sided. People who work with Mr Magu inform Nairametrics that he is as tough as it comes and has instructed his ‘boys’ not to relent in their quest to curb economic crimes.
Mr Magu is also not relenting and is now turning his searchlight towards commercial banks and their chief executives. In one of the most daring comments ever made to corporate Nigeria, he has informed those who care to listen that he “doesn’t care what happens”. He was reportedly quoted in an interview on Channels TV speaking about the commissions plans to expand their crime bursting operations to the Financial Sector.
“We are not only going after the personnel of banks, we are also going after the banks. What happens is that when a staff of the bank is involved in such activities, what the bank does is to take the person out of the system through dismissal.
“But now, we are going to go after the banks and the personnel used to perpetrate the fraud. It takes two to tango. In fact, very soon, you will see us going after the managing directors of the banks.
“We don’t care what happens because the right thing has to be done because they have given a lot of room for money laundering activities to thrive. They were used to hide all the stolen money.”
You would think that’s the worst you’ve heard. Now wait till you read the next quote;
“We had a discussion with the Governor of Central Bank of Nigeria, Mr. Godwin Emefiele, and I insisted that this so-called private banking should be stopped. It is illegal; it is wrong.”
The twin quotes are bound to worry any serious investor who has invested heavily in Nigerian commercial banks especially if you consider how fragile the Industry currently is. Just a few weeks ago, the EFCC dashed into the Headquarters of Fidelity Bank and Access Bank picking up their Managing Directors on suspicion of helping share the alleged “Diezani loot”. Fidelity Bank was forced to announce an acting MD within days. He was later made their Deputy Managing Director, after the MD, Nnamdi Okonkwo was released by officers of the commission. They have also been reported to have stormed the offices of other bank, and oil companies with suspected affiliations with Madam Diezani.
By threatening to go after bank Managing Directors, the EFCC has introduced another level of uncertainty about the ability of the banks to continue with their plans towards increasing profitability, issuing quality loans and ensuring that their capital adequacy ratios are above the Central Bank’s limit of 15%. Already, most banks are reeling from loans to the oil and gas sectors which have mostly gone bad and only now focussed on implementing plans of restructuring some of these loans whilst also improving shareholders return. Rather than focus on what they were hired for, Bank CEOs now have to worry about being arrested by officials of the EFCC as they preside over crucial management meetings.
The worst for us was him threatening to stop banks from engaging in Private Lending, a service that in itself is core to banking. To think he has already discussed this with the Central Bank Governor is an even more cause for concern. Godwin Emefiele, the CBN Governor has been criticized quite often for bidding to the whims and caprices of Aso Rock.
Whilst we do not claim to be oblivious of rogue bankers in our midst, we believe statements like these posse more harm than good to the financial sector. Foreign investors are expected back in Nigeria after the floating of the Naira have expressed other concerns other than the currency as potential reasons to stay away. Uncertainty in the financial sector also adds another layer of concern to an already shaking stock market recovery. The Central Bank and the Bankers committee should immediately open talks with the EFCC to ensure avenues of cooperation between all parties are harnessed before an all out fight that will only do more harm to depositors funds as well as shareholders funds.