Bailout

According to this article in NEXT

Early this year, the Central Bank spent nearly N1 trillion to bail out ailing banks, without authorisation from either the National Assembly or the Presidency.

That would be $6.7 billion at rates current as of today (=N=149.25 to $1.00).

I post this for information purposes. I do not know enough about what was done or how the money was spent to form an opinion as of now. Inasmuch as I think NEXT is one of the better media establishments (and one of the few who do credible investigative reporting), I have not seen mention of this anywhere else. Maybe I am looking in the wrong places.

That is certainly a lot of money, presumably sufficient to deal with toxic assets estimated at $10 billion. I wonder if this

Does this mean our banks are now in the clear? Or did the purported bailout fail to solve the problems in the sector?

I hope the banks are in the clear, so we can move forward. The stock market was always going to go through a correction, and citizen investors will be more careful going forward. Still, I have to do some more research to find out when, what and how (and whether) this bailout money was spent. Life would be so much simpler if important issues like these were dealt with transparently. It is OUR money at the end of the day, isn't it?

I am not comfortable with the suggestion that the Central Bank did this without the authorization of the National Assembly or Presidency. I am not sure what the statutes say regarding the "independence" of the Central Bank (I am sure there are many things the CBN is allowed to do without approval from the government), but our external reserves have been falling for months now, and if a substantial portion of what is (was?) left is going to be used for anything, I would like us all as citizens to hear what it is, and to perhaps express an opinion. With all due respect to the top technocrats and their soaring self-belief, in Nigeria bad policy usually results from small, closed groups of people who are accountable to no one making decisions on how to spend billions.

Postscript: The NEXT article is less about the bailout, and more about Professor Soludo himself. I shall have to think about some of the information NEXT put out there, and perhaps comment on it. Some things raise eyebrows directly, and some by implication. I have never liked the idea of selling government cars and government houses to the politicians who were meant to use these facilities briefly and then hand them over to the next group. It bothered me when the government began to sell houses in the Apo legilsative village to ex-senators and ex-representative who should really have just packed up their bags and vacated the premises for the next occupants. As the article puts it, selling the official Central Bank Governor's house to Prof. Soludo simply because he is the sitting CBN governor is like selling Aso Rock villa to Alhaji Yar'Adua.