he autonomy of the Central Bank of Nigeria (CBN) is not total. The Federal Government through its Minister or Ministry of Finance can overrule the CBN on issues that are not totally banking matters, even on overbearing full banking issues. Sanusi, the previous Governor of the CBN, got away with most of his banking and finance damaging measures only during the Yar’Adua Government and the first two years of Jonathan Government when the Minister of Finance was weak. But during the elected four years of Jonathan Government when there was a strong Minister of Finance Sanusi’s wings were clipped. As he was unable to throw his emirate weight around and dictate to all the Ministers and Ministries, he became frustrated and started to throw stones from a distance to the Government.
Whatever noises we today make about corruption in our country, Nigeria, and the resulting blackmail by the western world, it should be let known that though corruption is a major factor, it is not the factor that actually evaporates significant amount of our fund. There is the huge fund that is wasted by the elected, Governments and public establishments’ officials. This fund is spent generally legitimately without results (derived benefits). This drains our fund far more than what is lost through actual corruption.
Most of the huge amount of money we lost or spent without results ends up generally in the hands of foreigners and their countries dubiously, legitimately and predominantly through not well formulated projects, wrong purchases, fake products, outright duping, transactions that never saw the light of the day, projects that never got of the ground, equipment that were never used nor met the requirement they were first bought. It suits the western world to latch upon corruption to cover the funds they on their part siphon from us in these ways. This is out of mistrust or ignorance of those that make decision on our behalf. Officials who waste our funds in these manners can neither talk let alone account as to how they were duped or lost the funds through mistrust or ignorance. In effect, we work in our country to nourish only the economies of foreign countries.
Today look at the huge amount of money we have sunk in electricity project since 1999 that never got off the ground. A significant amount of this money in effect may not have been stolen but wrongly spent or wasted in many ways especially to foreigners and their countries. Those that investigate corrupt practices in the country are aware of all these in many cases and from the comparable amount they eventually traced down to actual corruption or embezzlement. Today most of the corrupt practices and outright embezzlements of huge public fund are not as they were between 1999 and 2007 and since the establishment of the Economic Financial Crime Commission. It is for all of these that President Buhari should be pre-occupied by the necessary reformation and restructuring Nigeria needs and only tackle corruption issues in abreast. The right reformation, structure and good systems of control would minimise corruption, reckless, careless and wasteful spending of fund of the country.
The Bank Verification Number (BVN) of the CBN, as it turned out and being interpreted, transcends just pure banking control mechanism. The measure was not thought through. It was not necessary. It is another wasted project. Were the then People Democratic Party (PDP) Government competent and responsible one, it should not have allowed the BVN measure. The purpose of the BVN measure the CBN says was for every person that banks to have one and an identification number. The identification number would then be present in all the bank accounts which such person operates either in one bank or at several banks. This would enable the authorities to identify those with multiple bank accounts. It would prevent a person from operating bank account with several fictitious names, etc. To the ordinary this may look plausible. It may be illegal to open dubious bank accounts but not legitimate multiple ones.
The CBN should again be let known that those that abuse banking facilities in our country, Nigeria, are not the large ordinary group of people which this measure is being targeted and so far inconvenienced. Those that abuse banking facilities in our country are found among the upper class, the elite, bank staff and people in positions of power. In the bank abuses, this group is further complemented by and through especially dubious and fictitious ordinary registered businesses and incorporated limited liability companies, especially private companies. At the Corporate Affairs Commission where companies are incorporated and some ordinary businesses are registered you will find that many of the private companies and registered businesses are either not functioning, do not have known or traceable addresses or are dormant for many years yet they maintain regular bank accounts.
But the CBN has already mandated the banks with enough directives to ensure they know their customers from the point of bank account opening to depositing and withdrawal of fund. Detail identification of individual bank customers is not the responsibility of the CBN. It is the responsibility of individual banks in their commercial judgement. The responsibility of the CBN is to give out general directives and guidelines and not to be funding and issuing individual bank customers’ identification numbers through contractors, etc.
As at this article on 7th November 2015, it was reported that out of the 52m bank accounts in the country, after all the time spent and huge fund the CBN sunk since 2014 in pursuance of BVN compliance, only 21m (20.8m) bank accounts customers bothered to obtain the BVN. The CBN is saving face on the grounds that within the 52m existing bank accounts some of the individuals hold multiple bank accounts. But within the 31m bank accounts that are without BVN even a quarter of it cannot just belong to multiple accounts holders let alone the 31m. In our country of adult population of about 100m we can only boast of about 50m (50%) bank account holders.
In the first place, why is it that about 50% of adult population of the country does not want anything to do with our banks? This is party because of the ways we discourage them by unnecessary measures and restrictive practices. From 1st of November 2015, the CBN by its orders and measures has locked out not just about 30m bank accounts but further potential bank account holders. The bank accounts holders whose money are ‘detained’ in the bank by CBN; what are they going to live on; how are they going to live without their money; how will there be economy of the country if people cannot have access to their money in the bank and spend? This is not withstanding the restriction on some other financial transactions.
Although the CBN has not come out categorically to say it is confiscating the money of those who refused to obtain BVN but the measures it has so far taken by locking out the bank customers and their accounts in inoperable accounts amount to confiscation. Here how do you encourage people to bank and use the banks? All of these mean we are out for another round of damage to our banking industry, where Sanusi left it in his guise of cleansing the industry of rogue bankers.
In the advanced countries anybody can open bank accounts and not just only teenagers under the age of eighteen but infants under the age of eleven years old. A teenager or an infant only needed to be accompanied by an adult who may be one of his/her parents or guardians. Here in Nigeria by our unnecessary measures we are asking people not to bank and ‘confiscating’ the accounts of those that are already with bank accounts.
Today it is not just other African countries but those from the rest of the world should have found our country, Nigeria, preferential and conducive domain to bank their money. By our measures, are we ready? For example; the United Kingdom economy ranks sixth in the world. Her economy thrives generally on foreign investors and depositors’ funds. This is generally because the country by her policies makes her domain bank and finance friendly for foreign investors and depositors.
The measures of the Central Bank of a country are stock market prices sensitive as the policies of the Government. Any wrong steps in the banking industry can hinder the economy. During Sanusi’s tenure as the Governor of the CBN, the value of shares at the Nigeria Stock Exchange nose dived from the height Charles Soludo left it. Up till today the stock market is yet to recover from the market shock to that height. By the use of the unnecessary BVN, etc. are we encouraging more domestic depositors and investors in the banks let alone foreign ones?
There is nobody that shall question the need to control the CBN itself, banks and their customers but the means to do so must be cost effective, optimal and lawful. The BVN is not at all within these criteria. There are clear alternatives that are legal and better than BVN, which are with biometric data. The national identity card and international passport are the only meaningful and legitimate means for general identification in our banking industry. When the CBN introduced its BVN to the country it ought to have looked beyond Nigeria and took the international community that would want to bank in our country into consideration. The huge fund sunk in the project and on foreign contractors to carrying out the exercise should have been given to the National Identity Management Commission.
It is only the Federal Government that can legally collect and store biometric data of the citizens of the country. The CBN in its BVN, its contractors and banks who collect and store the biometric data of the individuals do so illegally. The time the Federal Government can legally collect the biometric data of the citizens of the country are at birth, during the issuance of national identity card, international passport and by the law enforcement agents of the country only during their course of maintaining law and order only in criminal cases. Anybody can not just collect and store the biometric data of the individuals.
Biometric data need not be collected during national population enumeration and issuance of voters’ card. Neither should the biometric data of the individuals be scattered everywhere, among individual establishments in private and public sectors, foreign contractors, internet search engines, etc. in the guise of issuing identity particulars. This is because it is generally illegal to collect and store biometric data of the individuals outside the Federal Government. Those who stayed away from the BVN on this ground could have a good case against the CBN, its contractors and their banks on the ‘confiscation’ of their bank accounts, prevention from transacting bank business and dealing on foreign exchange market for lack of BVN.
The directive by the Buhari Government that all establishments and agencies in the country should harmonise and integrate their biometric data and identity documents with the National Identity Management Commission database is unnecessary. In the first place, they have not the legal right to collect or have collected the biometric data in the first place from their employees, customers, etc. They could issue or have issued their identity cards but without biometric data. What the harmonisation and integration directive of the Government entails or ought to mean is for all the establishments and agencies who need to clear their employees, customers, etc. to have the equipment that would be able to read the biometric data contain in the national identity card or the international passport and link them to the National Identity Management Commission database for the identification they sought. This should be necessarily only where their internal identity cards that should be without biometric data are not sufficient for the detail identification they need.
It should be imperative for the Federal Government to strengthen the National Identity Management Commission to be able to carry out its duty of issuing national identity cards to all the citizens of the country who attain the minimum age of eighteen years old and above. The Commission should be given the fund it needs for the project. It should be allowed to employ more of the staff it needs to do the job. National identity card can be issued at two places. As the right equipment are available at the international passport issuing office; individual could obtain his/her national identity card at the same time of passport issue. One could go direct to the National Identity Management Commission for the issue of his/her national identity card. The national identity card should have a life of ten years before it is due for renewal.
In the interim, for all the citizens who attain the minimum age of eighteen years old and above to obtain national identity card within a short time, the Local Government Councils of the country should be authorised to issue provisional national identity cards. All a Local Government Council need to do is on processing the particulars of an applicant on computer it would then connect to the database of the National Identity Management Commission who would at the same time copy the information, however, without biometric data. During the processing, the National Identity Management Commission computer would automatically issue a permanent number for the provisional national identity card.
The holder of a provisional national identity card would within a certain time limit present the card to the international passport issuing office or the National Identity Management Commission to issue the official national identity card. We have got the fund and should have the fund, and already have enough educated people in the country do the job. It will not take more than one year to complete the exercise for all the citizens of the country, both at home and abroad, to obtain the national identity card. You do not need to contract the project to foreign firms for it to be done.
The CBN is, therefore, again reminded that its BVN measure is unnecessary. It is sub-optimum to the control and financial policing purposes it is designed. The BVN would dissuade many people that have been reluctant to have bank accounts from doing so. It would dissuade foreigners from having personal or corporate bank accounts in our banks. The banks should be left alone to carry on with their already detailed directives of Know Your Customers.
The CBN should not be allowed to duplicating, complicating and nullifying what the banks or National Identity Management Commission should do or ought to be doing. The All Progressive Congress (APC) Federal Government should call off the unnecessary exercise of the BVN. In effect BVN cannot replace the national identity card. The Federal Government should ask those who collected and store the biometric data of the citizens outside the National Identity Management Commission, international passport issuing office and law enforcement agents to destroy the data.
To know more about this author; read his forty pages Presidential manifestos for the 2015 general election from his website; apiainternational.co.uk, and his previous articles that were published here on this column. He did not release the manifesto before the election nor participate in the election for certain reasons.