We want our money back!

We want our money back, and we’re going to get it.”- Obama week, President Obama announced a proposed Financial Crisis Responsibility Fee on the US largest banks:

“My commitment is to recover every single dime the American people are owed. And my determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people…We want our money back, and we’re going to get it.”

In Nigeria, the issue of the absence of sick President Umaru Musa Yar’adua and his remaining offshore to direct the affairs of the over 150 million Nigerians on his sick bed in Saudi Arabia when the constitution specifically stated what to be done when a sitting president is unable to perform the functions of his office has diverted the attention of Nigerians from the catastrophe befalling the workers in Nigerian banks.

Politics has made us to ignore a very important economic and social issue. Thousands of banks staff has been laid off following the ongoing reforms in the banking sector. Eight banks had their managing directors sacked last year because of bad loans they could not recover and weakness in corporate governance in some of the banks.

Banks go gaga

Some of the banks that have retrenched their workers include: Intercontinental bank 1,364; Oceanic Bank 1,500; United Bank for Africa 46; Union Bank 50; Spring Bank 200; Wema Bank 500, First Bank 500; and FinBank 500.

It was earlier reported that the CBN gave a directive to the eight troubled banks instructing them to reduce staff strength by 30 per cent. Consequently, Intercontinental Bank sacked about 50 top management staff from the rank of Assistant general manager upward.

The following week the bank sacked another 1,500 staff. The other troubled banks have also been systematically sacking staff under one guise of the other.

The orgy of staff retrenchment is however not limited to the troubled banks.

In October last year, three banks sacked 1000 staff within a week, with one of the biggest old generation banks leading the pack by sacking 485 in one day.

A total of over 6,700 bank workers had been sacked within the last 2 months alone, and an estimated 5,000 more are awaiting their letter of terminations. Almost all the banks are now affected with this reckless mass sack, which also involved large salary slashes for those yet to be affected.

The Central Bank of Nigeria (CBN) has justified the mass retrenchment going on in some Nigerian banks but said it did not authorize it.

Sanusi said the allegations that CBN directed banks to sack workers were false because banks are private companies which can take decisions on the engagement and disengagement of workers based on business imperatives.

Who erred, who is being punished?

As the financial crisis continues to bite harder, Nigerian ruling class through their executioner; Central Bank of Nigeria keeps transferring the burden on the mass of bank workers.

The bank executives who in the first instance, immensely benefited from the cause of this crisis with the connivance of the ruling class has consistently directed the consequences of their greed and failure against the workers who have always been at the receiving ends, both before and during the crisis.

As was stated in the article “Nigerian Financial Crisis: Any way out?” the present crisis is an inevitable crisis of capitalism and the capitalist class should be held responsible for this crisis.

Unfortunately, we are living in a capitalist state whereby capitalists possess all the state power which they use at will against the generality of the people and working class in particular. With this power in their hands, they have cleanly and wholeheartedly transferred the burden of the current crisis on the shoulders of bank workers.


The blame for this ugly turnout of events which has literally thrown Nigerians into anguish, pain and misery, can be traced to years of irresponsibility on the part of the banking supervisory agencies and a government which could not create an enabling environment for honesty, diligence and hard work to thrive in the industry, thereby creating an industry which lost focus and began to serve selfish interests, all aimed at self aggrandisement. Professionalism was thrown to the wind as some bank workers freely engaged themselves in the worst practices. 

Where are the Unions

Most unfortunate in this instance is the complete absence of organized resistance of the workers against this draconian and scandalous attack on the bank workers.

The Labour Minister Adetokunbo Kayode has pleaded with banks to stop forthwith the mass sacking of staff in the sector.

The Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) and the National Union of Banks, Insurance and Other Financial Institutions’ Employees (NUBIFE) have both threatened to shut banks over the mass sack.

Over the past years, unprecedented growth in the financial of the economy sector (The sector grew 277% between 2003 and 2007), has made it possible for the trade union leadership in this sector to completely abandon their responsibility to the rank and files.

More than half of the Bank workers are outside the trade unions especially those working in new generation banks and this make them much more vulnerable than their colleagues in the union.

Instead of the leadership to use this opportunity to campaign for unionization of presently un-unionized bank workers, they are rather deceptively going about begging the management to pay the entitlements for the sacked ones. Rather than mobilizing a more militant and aggressive campaign against this senile and barbaric system, they are calling on workers to adapt to it.

The leadership of Nigeria Labour Congress and Trade Union Congress nationally, are not at all faring better than their colleagues in this sector. They look the other way while their members are been gradually decimated. They felt they can survive on the crumbs from the capitalist class who day-in-day-out hands out bribes and gifts to this leadership for the purpose of corrupting them.

Call Sanusi to order

Justifying the sack, CBN Governor Sanusi Lamido Sanusi said the apex bank “will not support a situation in which we direct an institution to continue to live on a cost profile that is not consistent with its revenue profile.”

He said, “A bank like Oceanic bank was spending about N4 billion a month on salaries. Intercontinental was spending over N4 billion a month on salaries. There are no performing loans earning money. The banks had paid huge interest on it, paid interest on depositors fund and they have cost on running their branches. They have to survive.”

He said the N620 billion injected into the banks that had problem was not given to them to retain workers.

According to Sanusi, “If a bank is making loses and it continues running the overhead, it is taking depositors funds to fund it operations and further eroding your money and placing it at greater risk.”

He said the banks have looked at their numbers and decided that there was problem.

Unfortunately, everywhere in the world where banks are reducing costs, they have to let workers go. They do it everywhere, in America, in Europe and Asia. It is not unique to Nigeria, Sanusi said.

Why is Nigeria different?

However, one thing baffles me.

Nearly all the banks in developed economies that received government support in the past 18 months are declaring profit and rewarding their staff with huge bonuses this year.

Like President Obama declared above, western governments have declared their intention to impose stringent tax to recover the huge amount of money with which Banks reward their staff.  

Alistair Darling of the UK has also attempted to stop banks making lavish bonus payments through a one-off 50 per cent “supertax”. This will generate £5bn for the Treasury.

Obama said the US fee would recover every penny loaned to Wall Street during the financial crisis and stop the reckless abuses and excesses that nearly caused the collapse of our financial system in the first place.

“We want our money back — and we stand with President Obama to make sure we get it” he said.

The proposal is expected to recoup billions from the big banks, most of it from the ten largest.

As the President said, “If these companies are in good enough shape to afford massive bonuses, they are surely in good enough shape to afford paying back every penny to taxpayers.”

But the banks are making so much profit that they plan to absorb the charge rather than reduce pay-outs.

London City bankers will suffer little or no impact from the bonus supertax imposed by the government last month; according to a Financial Times poll of leading investment banks, and so they plan to reward their staff still despite paying the supertax.

Most banks, here, said they would absorb all or part of the cost of the one-off 50 per cent tax by inflating their bonus pools.

JPMorgan is the first of a clutch of US banks expected to unveil bumper profits – and bonuses.

Bonus pay-outs at the part-nationalised Royal Bank of Scotland, which announces results at the end of February, will be particularly sensitive.

Yet, the Nigeria’s case appeared to be different.

The Central Bank of Nigeria (CBN) yesterday said that all the 10 banks bailed out in 2009 will undergo recapitalization.

“The banks comprising Union Bank, Intercontinental, Oceanic, Bank PHB, Finbank, Afribank, Equitorial Trust, Spring Unity Bank and WEMA were represented at the meeting by board members, management and independent shareholders.

“The CBN informed the stakeholders that the Asset Management Company as proposed could provide the banks with the much needed liquidity and facilitate their recovery.”

In other words, the Nigerian taxpayer continues to fund these institutions, while the banks continue to heap more pressure on, and destabilise the social system by sacking more workers!

In the west, the anxiety is how to rein in their banks to prevent irresponsible behaviour; to stop them from cashing in on the tax-payers money and reward themselves with big bonuses.

In Nigeria, the banks irresponsible behaviour constitutes of the mass sacking of the hardworking workers that created the wealth the directors squandered during the time of plenty.

But while the Western government take action to curb banks “irresponsible behaviour”, the Nigerian authorities like Pilate, hypocritically washes their hands from blood.

Like their western counter counterparts, the Nigerian financial regulatory authorities should step in to counter such irresponsible behaviour.

Such government determined action can bear much fruit.

A day after President Barack Obama slammed the “obscene” bonuses , JPMorgan said it had set aside 33 per cent of its investment banking revenues for compensation, almost half the 2008 figure and below its 44 per cent historical average.

Executives said the lower compensation figures were a direct result of the barrage of criticism over bankers’ pay; “In this environment, if you don’t show discipline on pay, someone is going to do it for you.”

Unfortunately, there is no government in Nigeria to enforce such discipline as president Yar’Adua is away in Saudi Arabia on French leave since almost 2 months.

But even if he is around, it is doubtful he could have the will to call Sanusi and the errant banks to order. Nigerian authorities have never demonstrated any concern for the welfare of the people they are supposed to serve.

The banks being almost wholly owned by the Nigerian government at the present should be aware of their social responsibility to their current true owners- the Nigerian taxpayer.

It is very sad that people are losing their jobs, it is very sad that people are on the street.

This mass retrenchment of workers should stop.

The present leadership of the workers union must as a matter of urgency mobilize the rank and file to stop this wanton decimation of the Nigerian workers.

They should demand that the banks fulfil their social responsibility, or they ask for the N620 billion injected into the banks back.