MONDAY, 12 JULY 2010 01:11 HORATIUS EGUA  

 

Five troubled Federal Government financial institutions are to be comprehensively audited with a view to restructuring them to play effective roles in strengthening the economy. And any of the present or past chief executives officers as well as other employees of the banks who in one way or the other may have contributed to the failure of the institutions would be prosecuted under the audit plan.

 

The financial institutions slated for audit are NEXIM Bank, NERFUND, Bank of Industries (BoI), Nigeria Agricultural Cooperative and Rural Development Bank (NACRDB) and Federal Mortgage Bank of Nigeria (FMBN) to enable them.In an exclusive interview with BusinessDay, Olusegun Aganga, minister of finance, said the government was keen on repackaging the respective financial institutions to play key roles in strengthening the economy of the country.

 

“We are looking at carrying out a comprehensive audit of these banks so that they can play their roles effectively in the economy. If financial audits were conducted in commercial banks and those found wanting were asked to go why not the ones the government has direct control over? In fact, people who have caused these government-owned financial institutions to fail need to be in jail”, Aganga said. “They have lost their roles in the past and we want to ensure that they are properly restructured to help the economic growth of the nation,” the minister said.

 

He said he had already met with the respective banks, stressing that the planned review of their mondus operandi would go a long way in helping the government redefine their roles to enable them do what they were set up to do.“We want to find out why they have not been effective as they should be and help them do what they should do. It is not enough to have policy in place but we have to make sure that the institutions are well equipped and have the ability to perform,” he emphasised. Aganga stated that the government wants “to fine-tune the existing strategies. I am not looking at capitalisation yet until I am sure they (the banks) have the ability. It is first a case of assessment before moving to the next step”.

 

The minister said despite the request for recapitalisation by some chief executives of the banks he was unwilling to consider it at the moment. “It is not about how much they have that is the issue. I am a bit nervous to give them capital because I am not sure they have the capacity to handle the funds. So we have to look critically at why they have not been able to perform in the past and this will aid us in knowing what exactly we need to do to make them strong and ready to perform their roles”.

 

“It is only when have restructured them that we can be talking about recapitalisation. If we give them money now, it will definitely go the way of the past, so we are very cautious and careful about what we do today,” he said.

 

He lamented that the financial institutions ordinarily “should be at the vanguard of pushing the economy, supporting all sectors of the economy with soft loans,” noting that “there is a lot of work to be done. I need to lay the right foundations first before we move ahead. We are keen and hungry to do the right thing now”.

 

(Source:BusinessDay)