In July last year, the federal government established a task force comprised of the EFCC, ICPC, NFIU and the Federal Ministry of Justice to recover N5.7 trillion owed to the Assets Management Corporation of Nigeria (AMCON). The government also proposed an amendment to the AMCON Act with a view to strengthening its institutional capacity. Although conceived as a stabilizing tool for financial institutions, AMCON has become an enormous burden to the economy. More than N3 trillion of its debt was owed by just 20 debtors, according to AMCON Chairman, Muiz Banire. For the uninitiated, that is public money used to defray bank loans taken by private citizens who refuse to pay back. And the commission has at different times advertised the names of some of these fat cats.

Questions must be raised as to why it was so easy for these private citizens to corner for themselves humongous sums of money that belong to the public. More disturbing is that Nigerians hardly pay attention to this aspect of what ails us, believing that only those elected or appointed into public offices can be accused of fiddling with our common patrimony. That explains why, for instance, a man whose multibillion Naira debt led to the liquidation of a bank that sent hundreds of people out of jobs would be considered a more honest Nigerian than the low-level public official or civil servant who embezzled a million Naira and is being chased by operatives of the anti-graft agencies! The corporate thief could receive national honours, bag chieftaincy titles, be bestowed with awards, including doctorate degrees from our universities, and can also contest and become a governor, senator or perhaps one day, President of Nigeria!

While I have no problem with the attention focused on public sector graft, neglecting private sector infractions has allowed bad behaviour to fester. And we are all victims. In 2005, I gave the proceeds from my book, ‘The Last 100 Days of Abacha’ to my wife to manage. She invested the money, buying shares in a number of quoted companies that eventually collapsed. The promoters of one of those companies is now a politician, perennially contesting election to be governor of his state with the N6 million stolen from me! I know many families that were ruined by people who made good from the shares purchased in their companies that are now history.

In 2014, Dr. Hussaini Abdu, then Country Director for ActionAid (he currently holds a similar position in PLAN International), invited me to join a team of five members to conduct research on the relationship between poverty and corruption in Nigeria. The team was chaired by Professor Etanibi Alemika, currently a member of the Prof Itse Sagay-led Presidential Advisory Committee Against Corruption (PACAC). Other members of the ActionAid research team included Professor Dung Pan Sha of the Political Science Department, University of Jos; Ms. Ayo Obe, legal practitioner and a trustee of the Brussels-based International Crisis Group (ICC) as well as Mallam Yunusa Z. Ya’u, former Bayero University, Kano don and Executive Director, Center for Information and Development.

For eight weeks, we reviewed corruption indicators in Nigeria such as inflation/diversion of budgetary allocations, demand and supply of bribes, unauthorized variation of contracts, payment for jobs either not done or poorly executed, overpayment of salaries and allowances to staff (including non-existent ones called ‘ghosts’), brazen diversion of government revenue, violation of procurement regulations, non-payment/under payment of tax by private sector operators etc. In the course of our interactions, my own argument was that private sector corruption fuels poverty considerably in Nigeria, especially when this sector, according to Vice President Yemi Osinbajo, “accounts for well over 90 percent of our GDP”.

In his book, ‘The Private Sector as Culprit and Victim of Corruption in Africa’, Leonce Ndikumana, a Professor in the Department of Economics and Political Economy Research Institute (PERI), University of Massachusetts, Amherst, argues that corruption in the private sector is as invidious as that of the public sector because of its impact. And when extraordinary ill-gotten wealth is captured by the private sector in an environment such as we have in Nigeria today, according to Transparency International, “income inequality is increased and a state’s governing capacity is reduced, particularly when it comes to attending to the needs of the poor.”

For some inexplicable reason, not much literature exists for understanding the private sector in Nigeria, especially from the perspective of insiders. Most of the books by operators reveal nothing. But on my arrival in Abuja on Monday from the United States, I received an autographed copy of the memoir by former Managing Director/Chief Executive Officer of the Nigeria Deposit Insurance Corporation (NDIC), Mr Ganiyu Ogunleye. Not only is the narrative refreshingly different, it has helped me to enjoy the mandatory one-week isolation period prescribed by the efficient Dr Chikwe Ihekweazu-led Nigeria Centre for Disease Control (NCDC). In the 646-page book, ‘The Embattled Bank Regulator’, Ogunlewe reveals a lot about the private sector in our country and how several operators have been enabled, even empowered, by those who were supposed to regulate their activities. And Ogunleye is in a position to know.

Fresh from the University of Ibadan as a graduate of Economics, Ogunleye joined the Central Bank of Nigeria (CBN) in September 1974. After serving in different departments, he rose to the position of CBN Director of Banking Supervision in 1992. Seven years later, he was appointed the NDIC Managing Director/Chief Executive Officer. He served in that capacity for two terms of five years until he retired in 2009. He was also at some point Chairman, Committee of Bank Supervisors in West and Central Africa. So, what is reflected in Ogunleye’s memoir is a 35-year experience in the Nigerian financial sector regulatory environment.

One of the key chapters in the book is on WEMA Bank, titled ‘Affront on Regulatory Mandate’. It captures in detail the fight between NDIC and the board of the bank that was originally established in 1945 by the late Chief Matthew Agbonmagbe Okupe (father of Dr Doyin Okupe) as Agbonmagbe Bank before the military government of the old Western Nigeria took it over in 1969. I am sure some of the prominent people whose (alleged) roles were highlighted will respond because Ogunleye didn’t pull his punches. Names were also mentioned in other key chapters, including ‘Merger Without Due Diligence’ (on Spring Bank); ‘A Mirage for Depositors’ (on Savannah Bank) and ‘Government Intrigues’ which highlights behind-the-scenes power-play involving principal characters in Aso Rock, CBN, Ministry of Finance etc. at different times.

Ogunleye particularly took on the 2004 banking consolidation exercise by then CBN Governor, Professor Chukwuma Soludo. He disagrees with President Olusegun Obasanjo’s rationale for Soludo’s appointment: “While the economy was going down and people were losing their jobs and livelihoods, banks were declaring obscene profits and were increasing in number. I was grossly disturbed and dissatisfied with the report I got about the banking industry. The Central Bank Governor, Joseph Sanusi saw my point of view but as a commercial banker, his sympathy was, by my reckoning, more for the banks and his former colleagues than for the economy. After Sanusi retired, I had to look for a candidate outside the banking industry.”

Ogunleye does not give Soludo much credit for the banking consolidation and in fact makes imputations about regulatory capture under the latter’s stewardship. Discerning readers may, however, argue that Ogunleye is only justifing the apparent failure of Joseph Sanusi who incidentally wrote the foreword to the book. But what is clear from the narrative is the challenge of regulation in the Nigerian financial sector. Ogunelye prescribes that “it is imperative that regulators pay attention to market conduct” while the existing laws “require, as a matter of urgency, a major review or a repeal and re-enactment. Similarly, there is need for a financial sector masterplan.”

With interesting anecdotes, including an account of the day he witnessed board members of a bank engaging one another in physical combat, Ogunleye concluded that his encounter with various stakeholders in the financial sector reveals that a regulator must possess at least four attributes which he classified as 4Cs: Character, Competence, Courage and Commitment. Without these attributes, according to Ogunleye, it would be difficult for any regulator to effectively execute the assigned mandate.

At the end, what comes out clearly from Ogunleye’s memoir is that we need reform in the financial sector. But it goes beyond drafting another masterplan. A clear absence of rule of law encourages the impunity we witness. People who owe billions of Naira go about flaunting ill-gotten wealth without question. With reports that most of these ‘bad debts’ were collected and shared with bankers who then looked the other way, we need to reform the criminal justice system that is rigged in favour of the rich yet very harsh against the poor.

While Ogunleye’s rich memoir is on the financial sector, the lesson is the same for other areas of our national life if we are to deepen the private sector in Nigeria. Aside the CBN, other apex regulators include Nigeria Insurance (NAICOM), Securities and Exchange Commission (SEC), National Pension Commission (PENCOM), Nigeria Communications Commission (NCC), Corporate Affairs Commission (CAC), Department of Petroleum Resources (DPR) etc. Their basic role is always to promote and protect public interest. But when they are ‘captured’, they become tools in the hands of private interests they are meant to oversee. We witness a lot of that in Nigeria.

Interestingly, the capture of a regulator, according to Scott Hempling, adjunct professor at Georgetown University Law Center who teaches courses on public utility law and regulatory litigation, is characterized by the regulator’s attitude, not the regulated entity’s actions. “A regulator is ‘captured’ when he is in a constant state of ‘being persuaded’: persuaded based on a persuader’s identity rather than an argument’s merits. Regulatory capture is reflected in a surplus of passivity and reactivity, and a deficit of curiosity and creativity. It is evidenced by a body of commission decisions or non-decisions—about resources, procedures, priorities, and policies, where what the regulated entity wants has more influence than what the public interest requires.”

These actions and inactions—which militate against the enthronement of a level-playing field for all operators—Hempling says, “feed a forest where private interest trees grow tall, while the public’s needs stay small.”

That, and the burgeoning absence of competence—where a regulator simply does not understand the basic tenets of the field being regulated and reduces the office to a mere administrative award of favours and contracts—is a challenge. Across board in Nigeria today, people are found in positions that are way above their intellectual capacity. That is why many of our regulators fail to see how the import of a decision or non-decision can affect the state of industry five years down the line. It also explains AMCON’s N5.7 trillion debt, and the continuous decline of the nation’s collective wealth. (ThisDay)

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