• Saturday, July 20, 2024
businessday logo

BusinessDay

Increase in Minimum Capital Requirements for Nigerian banks – PART II

Increase in minimum capital requirements for Nigerian banks (Part II)

It is self-evident that whatever the Governor of the Central Bank is doing (or not doing), the backing (and banking!!) of the President is critical. On that score, President Bola Ahmed Tinubu did not pull any punches when he spoke in the Hague, Netherlands, during the business session of the bilateral meeting with the Dutch team, led by Prime Minister Mark Dutte.

“I am always ready to take tough decisions in the best interest of the people, even if with initial pains. I am a determined leader; I will continue to take the difficult decisions that will benefit our people, even if there is short-term pain. I am unafraid of the consequences once I know that my actions are in the best long-term interests of all Nigerians.”

Read also: Nigeria gets approval to host $5bn African Energy Bank

Hence, we must recognise the overarching influence of Mr. President in economic, financial, and political matters. When he was sworn in on May 29, 2023, he released an unscripted bombshell while delivering his inaugural address at Eagle Square, Abuja. Shortly afterwards, he spilled the beans in Paris while addressing Nigerians. According to AFP [Agence Francais-Presse],

“When I got to the podium, I was possessed with courage, and I said the fuel subsidy was gone. Also, no more parallel (black market) for dollars.”

On November 22, 2023, when President Tinubu addressed the German-Nigerian Business Forum again, he did not pull any punches:

“Nigeria voted for me for reforms, and from day one of my inauguration, I started the reforms. To me, if you didn’t mention me in the Guinness Book of Records, I’d strive to find a way to insert myself because I did it without expectation.”

The endorsement of the IMF [International Monetary Fund] followed on February 14, 2024.

“The new Tinubu administration has made a strong start, tackling deep-rooted structural issues in challenging circumstances. Immediately, it adopted two policy reforms that its predecessors had shielded away from: fuel subsidy removal and the unification of the official (dollar/naira) exchange rates.”

Front page editorial of the “Nigerian Tribune” newspaper.

Headline: “BRIBES: TINUBU’S CHARGE TO INVESTORS”

“President Bola Tinubu recently set tongues wagging when, during his just concluded trip to Doha, the Qatari capital, he told the country’s captains of industry to report directly to him if any Nigerian official demanded a bribe from them in order to facilitate a business transaction. Revealed in a signed statement by Special Adviser to the President on Media and Publicity, Ajuri Ngelale, the president’s message to Qatari investors at the Nigeria-Qatar Business and Investment Forum could not have been clearer: “Do not offer a bribe to any of our people, and if it is requested or taken from you, report to us. You will have access to me.”

Read also: FG secures $5bn Afreximbank funds to boost economy, de-risk business environment

Eager to drive home the point that the country is open to business and will adopt a business-friendly approach on his watch, he added: “Whatever the obstacle or problem that some of you might have experienced, it is in the past because there is no obstacle in the future. We are removing obstacles today, and we are going to continue to remove all obstacles. We have done so much within nine months. And I assure you, it is free entry and free exit. Your funds will flow smoothly into and out of our country. Bring your investments.” Finally, he urged Qatari investors not to allow “perceptions” about the country to “become a hindrance to [their] will to invest,” since “Nigeria is serious about revolutionising investment promotion.”

We could not be more delighted to read this promise of radical transparency from the president since, at the very least, it shows that he is not unaware of the tremendous odds typically faced by any entity—individual or corporate—seeking to do business in Nigeria. While, as the president mentioned, corruption is the most significant among these challenges, it goes without saying that it is just one of many tangible and intangible obstacles to investment.

Accordingly, not only do we welcome the president’s statement, for nothing could be more timely, we urge him to do everything within his capacity to ensure that the book is thrown at whoever flouts it, no matter how highly placed such a person is in the current administration. In other words, nothing is more important than the president backing his rhetoric with action, for understandably, many Nigerians are bound to sneer, saying that they have heard such soaring rhetoric before and that when the time came for egregious misdemeanours to be punished, the government lost its nerve. Since such sceptics have a point, the task before the president is to show that their scepticism has no basis and that he will let the hammer fall on whichever official demands inducement to do their job.