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Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 1FT interview transcript: Lamido Sanusi

!y om !ur"is

#ub$ished% December 1& 2009 0'%40Lamido Sanusi’s attempts to reform Nigeria’s nancial sector sincehe took over as central bank governor in June have been so dramatic that commentators havedubbed them the “Sanusi tsunami”.In the aftermath !idespread abuses have emerged. "r Sanusi hasbailed out nine banks to the tuneof #$bn and red the management at eight if them. In doing so hehas challenged some of the most po!erful interests in sub%Saharan &frica’s second biggest econom'.

In a !ide%ranging intervie! !ith (om )urgis the *(’s +est &fricacorrespondent at his &bu,a o-ceon ecember /$ "r Sanusi vo!ed to continue his battle defendedhimself against critics !ho claimhe is overstepping his mandate and outlined ho! he plans torestore the banking s'stem to health.)elo! is an edited transcript.

F% (e)ve had this *Sanusi tsunami+ throu"h the banin" system-./ter the drama, now you)re tryin"to iece this system bac to"ether- .re we now movin" on or areyou sti$$ /i"htin" the same batt$e you

were /i"htin" at the startLamido Sanusi: I thin the batt$e wi$$ continue to the etent that

batt$es are /ou"ht on two /ronts atthe end o/ the day- 3ou)ve "ot two arties- 3ou don)t ust tosssomethin" $ie this and wa$ away /romit- hey are not "oin" to $et you wa$ away- hey are not "oin" towa$ into ai$- So once you startthis, you are in a /i"ht unti$ the end- For me, and I)ve said this overand over a"ain, some o/ whatyou)ve seen in banin" is ust symtomatic o/ a$$ that is wron" with

the country-F% Just e$aborate on that a $itt$e bit-Lamido Sanusi: I/ you tae the abuse o/ o//ice, i/ you tae the

corrution, i/ you tae the imunitywith which the rich do brea the $aw, it)s somethin" that haensacross the board- he eo$e youare dea$in" with are not iso$ated individua$s- hey are art o/ a"rou- hey are art o/ a caste-hey)ve "ot a$$ies in o$itics- hey)ve "ot a$$ies in bureaucracy- .ndtheir a$$ies wor with them and

they stic to"ether-



So it)s never easy to ust say you are dea$in" with these 567s 8whowere /ired and /ace crimina$char"es and that)s the end o/ it- 3ou)ve "ot to rea$ise, it wou$d bevery na:ve to thin that a$$ theeo$e who have been bene/iciaries o/ their $ar"esse, the o$itica$

arties that have receiveddonations, the o$iticians that have been /unded, the sentryconsu$tants and contractors that arearound them, it wou$d be very na:ve to thin that they are ust"oin" to watch you basica$$y cut o// what they see as a maor source o/ /inancin"-F% Is active resistance then /rom a$$ those ;uarters to what you)redoin"Lamido Sanusi: 3es- I mean, you /ee$ it- 3ou /ee$ it in the

newsaers- 3ou /ee$ it in the inds o/

roadb$ocs that eo$e are tryin" to throw in your way-F% (hat sort o/ thin"sLamido Sanusi: 6a""eration o/, /or instance, the imact o/ the

credit crunch- I mean that credithas "rown by 20 er cent between <arch and =ovember buteverythin" you hear is that the bans arenot $endin"> the a$$e"ations a"ainst 6F55 8the 6conomic andFinancia$ 5rimes 5ommissioncrimina$isin" debtors and there/ore sti/$in" entrereneurshi-#erhas some o/ the newsaer

advertoria$s, they have been "oin" on, /u$$ a"e adverts in a$$nationa$ dai$ies which have robab$yInterviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 2

cost over 8=aira 100m so /ar, ust aimed at discreditin" a rocess-hese are a$$ art o/ /i"hts- .ndwe sti$$ don)t now how /ar they are "oin" in the udiciary and theetent to which they wi$$ try tocomromise due rocess-

F% Do those udicia$ batt$es imeri$ the who$e eerciseLamido Sanusi: I don)t thin so- I thin that i/ you are ta$in"

about /inancia$ sectors to beconvinced, they)ve "ot to dea$ with the re"u$atory issues, you)ve "otto dea$ with the macro?rudentia$issues, but you a$so dea$ with the "overnance issues- .nd they a$$"o to"ether- I don)t see how youcan dea$ with "overnance issues unti$ you actua$$y mae the ointthat there are conse;uences /orcertain tyes o/ behaviour- So /or me, they are ust one art o/ a

tota$ /inancia$ stabi$ity initiative-



F% I soe to a /ew baners in La"os be/ore comin" u here andsome say that you have oened toomany /ronts, that when you thin o/ those bi" names who are onthat debtors $ist or the bi" nameswho owned those bans, you seem to be /i"htin" a batt$e a"ainst

the most ower/u$ eo$e in =i"eria-5an you win that 7ther eo$e have tried to do these inds o/ batt$es and they)ve $ost-Lamido Sanusi: .t the end o/ the day, i/ you don)t batt$e them,

they wi$$ batt$e you- hey han"to"ether- .nd /rom the very be"innin", my attitude was, i/ I movea"ainst these 567s, who e$se is$ie$y to come a/ter mehere)s no oint retendin"- here is no oint behavin" that youdon)t now that these are the eo$e

who are /i"htin" a"ainst you- .nd I didn)t oen u the /ront- heon$y way you can avoid /i"htin"these eo$e is to do nothin"- here is no way they are "oin" to $etyou do it- .nd so wi$$ we win Idon)t now- I)m not even sure it)s about winnin"- For me, it)s aboutdoin" what we thin is the ri"htthin"-=obody every "uarantees that his actions wou$d chan"e a systembut one thin" that is "uaranteed isthat inaction never chan"es a system-

F% Do you thin one erson on their own cou$d chan"e =i"eriaLamido Sanusi: I)m not even sure that I)m one erson because

$oo at the inds o/ thin"s that arehaenin", /or eam$e- ae the etraordinary suort o/ theresident- It wou$dn)t rea$$y be correctto say that this is one erson- (hat we have done, /or instance, wecou$dn)t have done without aresident who says I wi$$ "ive you suort- 3ou show him the /acts,to$d him that this is the situationand we rea$$y need to do somethin" about it and he says "o ahead-

.nd he stics to it in site o/ whatever ressures he comes under-(e)ve had an 6conomic and Financia$ 5rimes 5ommission that hassteed u to the $ate- =ow, Idon)t now are the issues eo$e have with the 6F55 rior to this,but /rom the be"innin" o/ thisrocess, every time I have said, $oo, this is a rob$em, I need toarrai"n this erson, I need to checthis erson, I need to $oo at this, they)ve come out and they)ve"iven it-

(e)ve had, /rom time to time, to sea to the /inance ministerbecause /rom the very be"innin", the



decision not to $et bans /ai$, /or us, wou$d entai$ some /inancia$costs- .nd a"ain, he ust issued astatement yesterday, a statement o/ suort a/ter the banin"numbers came out 8showin" someheavy $osses- =o anic $oca$$y but you sti$$ want to have that

assurance comin" /rom the minister o/ /inance that desite what the numbers are, the "overnment wi$$continue to stand behind theseinstitutions-F% !ut the resident, o/ course, has been sic and out o/ thecountry /or three wees- hat suort, resumab$y, isn)t there atthe moment-Lamido Sanusi: It is- @e)s sti$$ the resident- I)m assumin" that I

have the suort o/ the residency-=o one has si"na$$ed otherwise- Fran$y, /or me, I wi$$ continue

doin" what I)m doin" and continue toat the best o/ my abi$ities- (hether the suort wi$$ continue, Inow that u to this oint I)ve had noreason to thin that that suort has waned-F% !ut the suort o/ the resident has been very imortant towhat you)re doin"-Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 3

Lamido Sanusi: =atura$$y it is- he suort has been imortant-

#o$itica$ suort is imortant to thesuccess o/ whatever we want to achieve, recise$y because thecentra$ ban needs other a"encies o/ the "overnment- (e need $e"is$ation at times- (e need the 6F55-(e need the o$ice- (e need thestate security services- (e need hysica$ rotection /or ourse$vesa"ainst anybody who may want totaeAF% @ave you increased your own securityLamido Sanusi: (e$$, the "overnment did-

F% he "overnment decided you needed more securityLamido Sanusi: 3es- From the very be"innin", the resident

decided that there was no oint tain"chances- It was /rom .u"ust 14th 8the date o/ the /irst bai$?out anddismissa$ o/ eecutives- @ebasica$$y ust ased that the security around me be increased-F% 5an I as you about the asset mana"ement comany 8.<5, theroosed vehic$e to tae toicassets o// the bans) ba$ance sheets-he nationa$ assemb$y "oes on recess very soon- hey)re not rea$$y

"oin" to ass it by the end o/ theyear, are they



Lamido Sanusi: I thin they wi$$- he .<5 bi$$, remember, is with

the @ouse o/ Beresentativescommittee now and they are "oin" to arran"e a ub$ic hearin" thiswee- .nd u$timate$y once theyass it in theory, the Senate can ust concur-

F% 3es, but do you thin that)s $ie$yLamido Sanusi: (e are ushin" and ushin" /or it-

F% (hat)s ho$din" it uLamido Sanusi: It)s a bi" bi$$ and a$so, un/ortunate$y, it "ot to

them at a time when it ust was"ettin" towards the end o/ the year- !ut we)ve tried as much asossib$e to, in advance, en"a"e them-(e "ave them advance coies o/ the bi$$, we had discussions withey o//icers and e$ained to themwhat the bi$$ was and what we were tryin" to achieve- (e had an

advance discussion with theresident be/ore the bi$$ came to him, to basica$$y see i/ there wereany reservations- So we)ve tried todo that and that he$s smooth the way-F% 5an you "ive us some o/ the detai$s I remember when youwere ta$in" in 5ae own, it was=aira C0bn to 400bn- Is that rou"h$y how bi" the thin" is "oin" tobeLamido Sanusi: (e$$, it cou$d otentia$$y be anythin" u to a

tri$$ion 8naira-

It deends on what asset you are tain"- I/ you too mar"in $oansand $oans secured by shares, "ivenwhere the maret is today, we)re robab$y about C00 bi$$ion- .nda$so rorietary ositions that arewaitin" in the bans-F% he ro ositions are inc$uded in the C00Lamido Sanusi: 3es, because the maret has $ost &0 er cent o//

its ea so now some o/ thosemi"ht even be worth much $ess today- I/ you $oo at what haeneda/ter the ub$ication o/ accounts

they are robab$y "oin" to $ose even more- So in terms o/ whatva$uations we $ace on those, wewou$d obvious$y be concerned to $ace on them a va$ue that wou$dreresent some si"ni/icantrecovery on the boos o/ the bans because that)s art o/ thereso$ution rocess- So in a sense, the.<5 is a vehic$e /or not ust a reso$ution o/ a toic acid rob$em butthe recaita$isation o/ theinstitutions-F% 3ou buy somewhere between what they aid and the rice now

and then you s$it the uside Isthat how it wors



Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 4

Lamido Sanusi: In a number o/ cases, to be honest, un$ess you

bou"ht the shares o/ the bans or

the shares o/ other comanies, the uside is not $ie$y to be much-here are a$so cases where theco$$atera$ is not stoc maret-F% his is the oi$ $oans business or rea$ estate-Lamido Sanusi: In one o/ the bans, /or instance, you)ve "ot hu"e

insider?re$ated transactions- he$oans "iven by the 567 to herse$/ or to her /ami$y members or tocomanies and S#Es /$oated insteado/ by her- !ut we a$so have assets that we)ve identi/ied in Ioyi, inEI 8both wea$th La"os is$ands, in

.bua, in #ort @arcourt, in Dubai- .nd there wi$$ be a who$e $e"a$rocess /or /or/eiture o/ those assets-So in theory, you cou$d tae that who$e c$ass o/ $oans and buy atsome discount /rom the ban andthen the .<5 "ets those assets when the $e"a$ rocess iscom$eted- .nd that is where you "et therecovery-F% Is this across a$$ the bans, are there simi$ar cases @ow muchdo you thin is that chun, in thatrea$ estate recovery

Lamido Sanusi: I thin it wi$$ be substantia$- I/ you tae a ban$ie 7ceanic, which is the one we areta$in" about, about &0 er cent o/ the $oan is non?accrua$- .t $east&0 er cent o/ that is somehow orother tied to the 567 and her /ami$y- So it $oos $ie a bi" rob$embut it)s rea$$y a rather sim$erob$em to reso$ve because you wou$d then say, $oo, I want &0 ercent o/ your =#Ls- I buy at 0 or90 er cent and you ust "o and tae it as recovery- .nd the 6F55then "oes a/ter a$$ those assets and

more- .nd then we can see what we can recover-F% !ut this is a new hase o/ recovery, isn)t it his is a new haseo/ the recovery rocess becausewe)ve a$$ been thinin" about the stocs and the oi$ secu$ation butyou)re ta$in" about "oin" a/terthe hard assets-Lamido Sanusi: (e$$, yes, we a$ways ta$ed about the stocs

because that was the ;uicest one todo and was what we thou"ht we cou$d do be/ore the end o/ December- It)s not $ooin" $ie$y now- It

mi"ht si$$ over into January but these stocs are easy in the sensethat you can say this is the va$ue



today- his is what was aid /or them- his is what we are ayin"-3ou cou$d ay mu$ti$es, you cou$day a remium but at $east you now eact$y what you are doin"-(ith the roerty assetseverywhere – and note Dubai roerty has "one down as we$$, so

you have the same, roerty inDubai, it was the same bubb$e that has a$so assed – you have asimi$ar situation but the va$uationsare a bit more di//icu$t, a bit more com$e- So u$timate$y I thinthat the maor consideration is "oin"to be that we are in a very /ortunate /isca$ osition today- (e run anotiona$ /isca$ sur$us- (e have acurrent account sur$us in ecess o/ G'bn –F% !ut in rea$ terms, you)re "oin" to be in an enormous bud"etde/icit, G10bn-

Lamido Sanusi: (e$$, we had a bud"et de/icit $ast year- . G10bi$$ion de/icit, i/ we sent a$$ themoney, yes- !ut i/ you too a one tri$$ion naira cost /or reso$ution,it)s G10 bi$$ion over 10 years, so it)sone bi$$ion additiona$ 8annua$$y, oay .nd today the "ross nationa$debt is about 11 er cent o/ HD#-So a tri$$ion naira, I ee sayin", with a HD# o/ tri$$ion, a tri$$ionnaira is $ess than 2 er cent o/ HD#-o be conservative, I wou$d say i/ we sent a tri$$ion over the ten

year eriod, we may recover 0 ercent o/ that- So I wou$d thin that there wou$d sti$$ be a net cost tothe taayer /or the other 00bn-F% @ow does that brea downLamido Sanusi: (e$$, at the moment, the number o/ a tri$$ion, I)m

$ooin" at the ho$e in the caita$ o/ the bans- (e)ve now then "ot to do a com$ete breadown o/ whatthat ho$e is- =ow, it)s not that theho$e wou$d be rorietary ositions that have been wied outbecause o/ caita$ marets) crash-

@oe/u$$y i/ the shares remain, as caita$ maret recovers some o/ that, it "ets recovered- Some o/ them wou$d be $oans "iven to sto broers and other oeratorssecured by shares> a"ain they)recaita$ maret re$ated- Some o/ that wou$d be $oans taen byinsiders /or which they are ersona$$y$iab$e, and that wou$d inc$ude /indin" a$$ assets and i/ we estab$ishthat they too the money, thenInterviews with Lamido Sanusi – June 21 and December 14, 2009by F

www.proshareng.com 5



under the $aw, irresective o/ whether or not those assets were ustco$$atera$, we can "o /or/or/eiture, so we wou$d then try to "o a/ter as much as ossib$e/rom their ersona$ wea$th- .ndc$ear$y there wou$d be monies that have been $ost- Loans that have

been "iven, there is no /orm o/ tan"ib$e co$$atera$, there is no recovery and so on and we do thinthat wou$d ossib$y be substantia$-F% o use that eam$e o/ 7ceanic, you said &0 er cent o/ theentire $oan boo was =#Ls- So whatnumber is thatLamido Sanusi: Let)s ut it this way- .s o/ Setember, when we

$ooed at the numbers o/ 7ceanic, atota$ o/ about =aira 20bn was tied to comanies that were owned,art$y owned or /$oated throu"h

/ronts by the <D and members o/ her /ami$y- .nd those are thecases that are bein" brou"ht to acourt o/ $aw- =ow, that reresents about 0 er cent o/ the tota$number o/ $oans /or the ban-F% So this race to ic u these assets is "oin" to be a bi" art o/ the recovery, isn)t itLamido Sanusi: 3es- !ut we don)t want the bans to wait unti$ the

assets have been iced u be/orethey can "et bac to business-F% his is the urose o/ the .<5

Lamido Sanusi: 3es, that is one o/ the uroses o/ the .<5, ustto "et the bans movin" whi$e wecontinue with this $on" rocess o/ recovery-F% (hat eact$y are you countin" as a troub$ed asset .ny =#LLamido Sanusi: 3es, any =#L that has had rovisions that have hit

the bans boos-F% Is it countin" an =#L as no reayment /or three monthsLamido Sanusi: 3es, assive /or three months, but tyica$$y you

wou$d eect that the bans, i/ it)s avo$untary rocess, the bans wi$$ be ust hand$in" the =#Ls where

they thin that there)s rea$$y some$ie$ihood o/ recovery-F% Just to come onto the ;uestion o/ so$vency o/ the bans, these$osses we saw in the C resu$tswere much bi""er than the amount o/ the bai$?out- Four banscame c$ose to G10 bi$$ion-Lamido Sanusi: 3es, but the bai$?out was never to cover $osses

and the bai$?out was to meetob$i"ations- It served that urose- hey)ve not de/au$ted on anyob$i"ations- he who$e urose o/

the bai$?out was to "ive them enou"h to mae sure that they cou$dmeet their ob$i"ations with their



creditors and not be under any ressure to reay- .nd that urosewas served-It was a$ways c$ear, to arrive at the /u$$ etent o/ the /inancia$re;uirements you)d need a morethorou"h ob- Look in the United States, in Europe, the banks

are still taking write-downs 24 monthsafter they started. The market moes, they dis!oer new things.F% For the who$e sector there are bi" hurd$es to come, aren)tthereDecember C1 8when a$$ the bans have to reort to a common year?end /or the /irst time wi$$ be what(arren !u//ett ta$s about when he says it)s on$y when the tide"oes that you see he)s beenswimmin" naed- hat is the /irst time a$$ the bans have had to be

so$vent on the same day ever- .reyou con/ident that is ossib$e !ecause, as we now, in the astbans have shi/ted assets betweenthemse$ves to mae sure that when it comes to their day they $oo"ood- here is a ris o/ renewedanic, isn)t thereLamido Sanusi: =o, I don)t thin so and I)$$ te$$ you why- !e/ore

Setember, as /ar bac as June weut a temorary sto on o//?ba$ance?sheet en"a"ements- .nd thatis art$y why we were ab$e to see

a$$ what you saw- (e then, in 7ctober, issued "uide$ines /or whatneeds to be ub$ished 8in resu$ts uto Setember C0- .nd those are numbers that wou$d re/$ect ourauditor)s rovisions and any otherrovisions, $osses that came to $i"ht, un$ess there were recoveries-So, in a sense what is bein"ub$ished now a$ready catures most o/ the bad news-Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 6

.nd that was the who$e idea- So, in many cases you wou$d see thatDecember is an imrovement o/ Setember because there wi$$ be recoveries, and Setember wasmore or $ess the worst case scenario-It is sad that we may not be ab$e to actua$$y im$ement somethin"o/ the .<5, but i/ we were ab$e totae, even i/ it was ust mar"in $oans, that wou$d $ead toimrovements in =#Ls and $i;uidity issuesand caita$ issues across the board- So, it is about how ;uic$y wecan do that- I/ we can do that

be/ore December C1 the numbers wi$$ be much better-



(e)re not c$aimin" that a$$ our bans are stron", we)re not c$aimin"that the /inancia$ system itse$/ isso$id and that there are no vu$nerabi$ities- (e)re sayin" there areweanesses, we)re sayin" there arerob$ems, but we are a$so sayin" that we have determined eact$y

what the rob$ems are, and we arenot concerned about our abi$ity to hand$e those rob$ems- (e nowwhere the so$ution $ies- hecountry has the ba$ance sheet to tae care o/ the rob$em in theworst case scenario-F% (hat haens when the "uarantee 8on inter?ban $endin" runsout at the end o/ <archLamido Sanusi: (e etended the "uarantee, and we wi$$ etend it

/or as $on" as we need to etend itunti$ we have /inancia$ stabi$ity-

F% (i$$ this "o on /or yearsLamido Sanusi: =o, it can)t- his rob$em with a$$ the bans wi$$ be

reso$ved durin" the course o/ 2010-

"T# So, the end of 2$%$, what will we hae arried at

Lamido Sanusi0 Well, a brand new financial system, a completely

new reorganisation. The banks, all these banks will not be there; inone form or the other they will either have been re-capitalised and

under new management or they will have merged with other institutions.

"T# &s %' banks or thereabouts still your target(

Lamido Sanusi: & neer had a target of %'. & was asked if &

thought there would be a !han!e, and & was asked what my guess would be, and & said we might hae about %'. &n prin!iple & don)t think it)sa wise idea to aim for a ery small number of institutions,

be!ause the e*perien!e is that if you !reate a small number of ery large institutions they hae these too big to fail problem- .nd a$so what we)ve seen, by $ooin" at the numberssince the conso$idation 8in 2004, is that the $endin" to S<6s shrunto $ess than 1 er cent o/ tota$ $oans /rom about 10 er cent-

F% hat)s an enormous rob$em-Lamido Sanusi: 3es, because the assets ust "row- (hat then

haens is they "o /rom these $ar"e eosures to caita$ marets,$ar"e in/rastructure dea$s or $ar"e eosures to mu$tinationa$



cororations, and they basica$$y don)t have the time to dea$ with

S<6s- So, it is neer really a good target to say youwant to hae a small number of ery big banks-

!ut if you hae banks that hae been de!imated by bad management and they !learly are not going to be iable inthe long term on a stand alone basis, either be!ause they might not be able to raise the !apital or be!ause they don)t hae the management depth to !ontinue, if you hae the!apital then it makes a lot of sense to let them go into a safeharbour.

F% .nother thin" you said in 5ae own in 7ctober was that thosediscussions with otentia$ /orei"n investors were imminent- .rethose discussions now underway

Lamido Sanusi: 3es- he /inancia$ advisors are ta$in" to $ie$y

investors, in the sense that they have obtained eressions o/ interest- . number o/ the bans) boards have "iven them the /orma$mandate to see and to so$icit /or investors-

F% hese are Standard, Deutsche A

Lamido Sanusi: A and 5hae$ @i$$ Denham- So, where we are

today is we thin there shou$d be a technica$ bid rocess, where the

rimary concern is to see i/ there are institutions that haveeressed an interest in comin" to =i"eria, and that theseinstitutions have a trac record and an abi$ity to run a ban- .ndthe net sta"e, obvious$y, is then what wou$d it tae to mae thisdea$ haen, and that is when we come to the /inancia$s-

F% So, where are we now .re eo$e rearin" these technica$bidsLamido Sanusi: I thin at the moment what we)ve had is we)ve

had a number o/ road shows> we)ve had a number o/ institutions

that have said they mi"ht be interested- Some have said, $oo, we)$$wait/or the numbers to come out in December- (e)re tryin" to en"a"ethe universe o/ interest and to see what is $ie$y to be a seriousinterest and what is ust /ishin", and then try to assess the$ie$ihood o/ a dea$ actua$$y materia$iin"- . ban mi"ht beinterested> their re"u$ator mi"ht not suort it- So, that rocess ison"oin"-

F% I/ I want to buy a =i"erian ban wou$d I have had to run a ban

in ./rica be/ore



Lamido Sanusi: =o, I don)t thin so- I thin once it can be

estab$ished that i/ it)s a ban, it)s a stron" ban, it shou$d be /inebecause then they now what it taes to run a ban-

F% .nd is there scoe /or interna$ conso$idation as we$$, /or stron"

=i"erian bansLamido Sanusi: 3es, a number o/ bans have eressed an

interest- Some o/ them robab$y don)t have the caita$ at themoment- 7ne o/ the mode$s that seem to be "ainin" currency is theossibi$ity o/ a /orei"n ban comin" into an una//ected =i"erianban, and then usin" that as a stein"?stone to ac;uire one o/ thetroub$ed bans-

F% .nd that is another thin" that is in discussionLamido Sanusi: here are one or two cases o/ ossibi$ities o/ that

haenin"-F% Do you have a rou"h sense o/ time when you mi"ht want to "etaround to this technica$ bid rocess

Lamido Sanusi: It)s on- I thin that we shou$d be ab$e by ear$y

net year to have a $ist- (e)ve basica$$y to$d eo$e that wou$d $ieto have eressions o/ interest in by January- he advisors wi$$ te$$us these are the eo$e that eress an interest in theseinstitutions, and in our view this shou$d be your re/erred artner orthis shou$d be your net re/erred artner- .nd then we can "o and

either say "o ahead and ta$ to them and see-

F% .nd how many /orei"n bans have eressed interestLamido Sanusi: I don)t have an eact number now- I)m aware that

8the advisors have ta$ed to about /our bans, I thin- .nd they)vea$so had a /ew investor "rous who have said that they wou$d$ie to come in-

"T# +ut how !an you sell what you don)t own( ou put inthese seen-year !onertible bonds, that was the bail out

fund but that doesn)t mean that you own those bans-

Lamido Sanusi: (e$$, two thin"s- (hatever we do wi$$ have to be

"overned by the $aw- So, i/ we need anybody)s arova$ to se$$ wewou$d "et that arova$ to se$$-

"T# &n!luding e*isting shareholders

Lamido Sanusi: I/ we needed those arova$s we wou$d-



F% +ut what if they)re not forth!oming(

Lamido Sanusi: e will !ross that bridge when we get to the

bridge. ou)e seen the numbers# te!hni!ally these banksare !reditor-owned banks.

F% his is an e//ect o/ $ast wee)s $osses, isn)t it 86istin"shareho$ders have been wied out basica$$y-

Lamido Sanusi: That)s it it)s ery !lear on the books now.

+ut are the institutions worthless( /o. Should we then!an!el all the shares and make them 0ero( /o, & don)t think we should. &f we !an get into a situation in whi!h they 1e*isting shareholders end up with some alue in whi!heer

new entity then that is what we would prefer. 3nd we would engage them at the appropriate time.

F% +ut you hae to effe!tiely nationalise thesebanks first in order to be able to sell them.Lamido Sanusi: =ot necessari$y- his is e//ective$y urchase?on?

assumtion, isn)t it, when you do the .<5- 3ou are e//ective$yse$$in" o//, de$iverin" a c$ean ba$ance sheet to an investor andreturnin" some residua$ va$ue to the eistin" shareho$ders- edon)t want to nationalise. &f we hae to we will if it be!omesery diffi!ult to find an appropriate inestor, an a!!eptableinestor - It)s not to "ain- I ee sayin" it)s not about the money-It)s very easy to say ministry o/ /inance, why don)t you ust ut in8=aira 200bn to this ban and ac;uire 0 er cent, and then assthe aroriate $aws to a$$ow you to nationa$ise, and usteroriate- !ut eerience is that the "overnment is not the bestmana"er o/ institutions, and it is not what we want to do- =ot thatthe rivate sector has roven itse$/ to be tota$$y immune /romrob$ems, but I thin over time it)s been shown over and over a"ainthat you have a much better chance o/ havin" we$$ run institutions i/

you a$$ow rivate institutions 8to ust own them- So, i/ there is"oin" to be any ind o/ "overnment ownershi at a$$ it robab$y wi$$be a minority stae ure$y /or a$so rovidin" caita$, to be disosedo/ as ;uic$y as ossib$e-

F% (hat about how these bans are bein" run at the moment .rethey reortin" ersona$$y to you, these <Ds

Lamido Sanusi: =o-



F% +ut hae you issued any instru!tions( id you, for instan!e, tell those banks to sell their priate planes( id you tell them to redu!e 5obs( Lamido Sanusi: =o, I didn)t- he re$ationshi between the

re"u$ator and oerator sometimes wors on the basis o/ mora$

suasion- he rivate et thin" became a bi" issue in the maret- Insome institutions they wi$$ te$$ you they)ve "ot o//ices acrossre"ions, sometimes they trave$, and it)s convenient to have these

ets and the costs are not very hi"h- !ut the ets had become asymbo$ o/ ostentation, o/ waste, esecia$$y in an environment whereyou)ve"ot so much overty- I never, in a /orma$ meetin", said to anybodyto se$$- !ut I thin the si"na$ was out there> it was very c$ear that Ithou"ht it to be a resonsib$e thin" to sto it- .nd I be$ieve a /ew o/ the bans, maybe a$$ the bans, decided that it wou$d be a roer

thin" to do it, and they did it- 7n reducin" worers, I never did-hese are rivate$y run or"anisations- I thin you are re/errin" to a$$this issue with $abour- (hat haened was one o/ the bans inwhich we aointed a mana"in" director wrote to the bansuervision deartment and said they had a rob$em, that theirwa"e bi$$ was a$most =aira bn a month- <eanwhi$e their $oanswere non?accrua$- hey were not earnin" anywhere near enou"h tocover that cost- .nd there/ore the ho$e was "ettin" deeer anddeeer- .nd the re$ationshi o//icer in banin" suervision thenwrote to them in resonse and advised them to $oo at cost

mana"ement, sta// cost mana"ement, with the ossibi$ity o/ reducin" sa$aries or reducin" headcount because they were notearnin" what they thou"ht they were earnin"- =ow, obvious$y, whathaens a"ain, when you ta$ about /i"htin", you have institutionswhere you)ve sti$$ "ot many sta// that are $oya$ to the reviousmana"ement, and that $etter was taen and "iven to the ress- .ndobvious$y then you)ve "ot ourna$ists who were a$so worin" /orthose eo$e and they made a $ot o/ it, and they said we$$, younow, the centra$ ban has instructed bans to reduce worers- 3outhen had $abour eo$e who had a$so been rovoed or incentivised

who then said there is "oin" to be a bi" industria$ crisis /or centra$ban- !ut that is basica$$y what haened> there wasnever a circu$ar- !ut @S!5 recent$y $aid o// worers- It)s an industry>it doesn)t need the centra$ ban to te$$ a ban to do that-

F% he most imortant thin" in a$$ o/ this, as ever, is the rea$economy- .nd your oint about $endin" to S<6s is interestin"-#rivate sector credit has "rown this year but it)s not been "rowin"very /ast in these $ast /ew months- ./ter si months o/ hi"h drama,sure$y the rea$ "oa$ must be to have a banin" system that better

serves the needs o/ the rea$ economy Some resected banin"eecutives aren)t sure whether we)re "ettin" c$oser to that-



Lamido Sanusi: (e$$, I don)t now when you soe to the bans-hey robab$y to$d you that were in 6nu"u this weeend, and thewho$e urose o/ that retreat was to $oo at how the /inancia$system can serve the rea$ economy- (e had a $ot o/ credit "rowth in200' to 200> credit "rew by &0 ercent-

F% +ut where was that !redit going(

Lamido Sanusi: hat)s it, and that is the oint- he credit was

"oin" to the caita$ marets> it was "oin" into commodity

secu$ation- I have no doubt in my mind that i/ oi$ rices imroveand oi$ oututcontinues imrovin" and you then have increased $i;uidity in thesystem, i/ we don)t /ind a way o/ directin" that credit to the rea$economy we are "oin" to end u, in one way or another, in thesame sot in three or /our years- .nd that was the who$e urose o/ the retreat in 6nu"u-

F% here did those dis!ussions take you(

Lamido Sanusi: (e$$, we eroed in on a number o/ sectors thatI)ve "ot to /ocus on- 5$ear$y a rob$em is ower> the "overnmenthasn)t de$ivered on ower- .nd the reason in our mind is that therehas been, in the $ast two years, so much emhasis on sendin"money on ower and $ess on ushin" /orward the re/orm rocess-. review o/ the tari//s across entire va$ue chain to mae sure thatwhoever sets u an I##8indeendent ower roducer can "et "as at commercia$ rice, anda$so that they can se$$ ro/itab$y-Beco"nition that there are "oin" to be two cate"ories o/ =i"eriansnow% those who ay 4 to '0 nairaer i$owatt on diese$ and those who don)t have ower- he be$ie/ that there is a tari// which bene/itsmany eo$e is untrue> many eo$e don)t have ower or they "et it/or a /ew hours a day- So, thisidea that there is a tari//, I $ooed at the numbers, we ay thee;uiva$ent o/ ' cents er i$owatt hour,but we have the most ine//icient ower su$y system in the who$eo/ ./rica- In Hhana they ay about2 cents er i$owatt hour- 3ou)ve "ot (est ./rican countries ayin"C0, C cents er i$owatt hour-So, when you $oo at our er caita income we)re not the oorestcountry in ./rica, I rea$$y don)t



understand why we need to /i tari//s at that $ow rate-I/ you moved you cou$d $itera$$y doub$e the tari//s, and that wou$dattract investment into ower-Knti$ you "et ower ri"ht you are not "oin" to have manu/acturin"-So, what came out o/ 6nu"u was $oo, since the "overnor o/ the

centra$ ban is o//icia$ economic advisor to the "overnment I haveto tae u that ro$e within "overnment o/ ushin" /or re/orms inower- So, a"ain, I now you wi$$ have heard this about not eein"

tur/, but this is my tur/> I have an invested interest- &f the

goernment is not leading on power you are not going to hae manufa!turing. 3nd if they 1thebanks don)t lend to manufa!turing, and they)e got all this money they)e got to return to shareholders,

they)re going to get into real estate spe!ulation,

!apital markets spe!ulations, !ommodities-related spe!ulation. So, the ower re/orms are at the heart o/ what we

do- =ow, the ;uestion is how much o/ it is a $ac o/ understandin",how much o/ it is vested interests-

F% !ut there are a $ot o/ eo$e who bene/it /rom the status ;uo-

Lamido Sanusi: So, unfortunately that is another

battleground that has been opened. & !an)t do anythingabout it, but it is there, and & !an !hoose not to, but &)e

!hosen to go into it.

F% !ut this brin"s bac to the sort o/ o$itica$ oint- 3ou say it isinevitab$e and you have no choice> nonethe$ess you are u a"ainstthe eo$e that some wou$d say run =i"eria- .nd this is "oin" to bean incredib$e di//icu$t thin" to do> you are tryin" to redraw some o/ the most /undamenta$ rob$ems in the country- It ust seems thatthe sca$e o/ that cha$$en"e is enormous-

Lamido Sanusi: 3es, the sca$e is enormous- #ersona$$y I thin I

can do it, and that is why I)m doin" it- I thin we overestimatedtheir ower- I thin we a$$owed them /or too $on" to sto us /rommovin"-.nd I thin they are not as stron" as they thin they are- Loo,when we were "oin" to remove the bad "uys eo$e said youcou$dn)t do that, we don)t now what is "oin" to haen> and we)veremoved them- .nd be/ore a court o/ $aw I wi$$ ut some o/ them inrison> they wi$$ "o- (e wi$$ ush it to the sureme court, we wi$$mae sure that in the cases where we do have evidence that canstand in a court o/ $aw we wi$$ mae sure that we ursue that to its

$o"ica$ conc$usion- .nd I suose it is the same thin" witheverythin" e$se- 3ou can on$y do your best and try and a$y your



own abi$ities and contacts- .nd /ran$y I do be$ieve that once eo$esee that A a$$ that I can do is serve as a cata$yst /or chan"e-7bvious$y one erson cannot chan"e- !ut what haens o/ten iswhen you be"in you then "et a /ew eo$e that be$ieve the sameway, who come u, andA

F% ho are those people(

Lamido Sanusi: hey wi$$ come- I)m sure that I wi$$ "et suort in

the cabinet- I)m sure I)$$ "et suort /rom the business community-I)m sure there wi$$ be one or two that wi$$ stand u and sea-

F% There hae been mistake along the way, ina!!ura!ies inthe debtors) list or what hae you. 6as it all gone a!!ording

to plan(

Lamido Sanusi: It)s "one who$$y accordin" to $an- I thin the

mistaes that have been made are not mistaes o/ rinci$e, andthey are not mistaes that are due, $et)s say, to a $ac o/ di$i"ence-here has been co$$atera$ dama"e- I)$$ "ive you a /ew eam$es-(e)ve had names that were ub$ished as directors o/ comanies andthey had $e/t the board, but the records o/ bans did not show thatthey had resi"ned- .nd when eo$e came to us and said $oo, wehave $etters, we resi"ned /rom this comany, we)ve actua$$y /i$ed>

when this came to the commission we have romt$y ao$o"isedand said we$$, we re"ret it, but this is the in/ormation that we had/rom the bans- (ithin the "rand scheme o/ thin"s we)re not er/ectand we do acnow$ed"e that maybe one or two thin"s cou$d havebeen done better- I haven)t seen anythin" that I wou$d have donedi//erent$y-

F% idn)t you hae to reerse !ourse oer 1remoing 7ike 3denuga 1from the board of E8uatorial Trust +ank(

Lamido Sanusi: 3es, but that wasn)t about main" a mistae ata$$> it was about a ne"otiation rocess that /o$$owed his remova$- Ihad to mae a number o/ ud"ements- I)$$ te$$ you what the

ud"ements were-

7ne, 6!% asa ban accounts /or $ess than 1 er cent o/ tota$maret- (hen you net out the art o/ the business that is re$ated to.denu"a)s own comanies it was about 0- er cent- @ow muchener"y are we to dissiate on that ban It was un$isted, itthere/ore had no caita$ maret re$ated issues, no caita$ maretmaniu$ations, it didn)t have any mar"in $oans, the number o/ $oanswere si"ni/icant$y associated with comanies owned by .denu"a, he



a"reed to mae immediate ayments> I thin so /ar he has aiddown =aira 2'bn- (e did turn those into er/ormin" $oans- @ecommitted to re?caita$ise the institution to di$ute his ownershi andmove very ;uic$y, under our own "uidance, into an<.arran"ement, on the condition he acceted our own aointed

mana"ement to remain in $ace-

F% This is an 793 arrangement with whom(

Lamido Sanusi: I)m not at $iberty now to ta$ about the institution

he is ta$in" to, but he did disc$ose he was in the rocess- @estarted a rocess, and he subse;uent$y came and said he hadstarted a rocess o/ discussion with one o/ the $oca$ bans thatwou$d basica$$y tae the ban into a $ar"er institution- =ow, "iven a$$

o/ that, and "iven the /act that I had Knion, Intercontinenta$,7ceanic, #@! to dea$ with, I made the ud"ement that "iven thatthere were a$so other thin"s which this same erson owns – H$o,which is a te$ecoms comany, 8etro$eum "rou 5onoi$ – and assomeone a$so $ooin" at the macro economic im$ications o/ actions, I had to thin o/ whether it was worth risin" troub$e in theoi$ maretin" and te$ecoms sectors- !ecause i/ eo$e thou"ht.denu"a was not credit worthy, and i/ the business o/ H$o or 5onoi$su//ered, I had to mae the ud"ements as to whether, /orthe indo/ in/ractions we saw in a ban that was ha$/ a ercent o/ the

maret, were worth tain" that ris- So, that was the ud"ement Imade- So, it wasn)t about a mistae> it was about i/ we can /i thisrob$em, and by main" sure he com$ies with these ru$es, thenALoo, they are "oin" to ay us bac the =aira C0bn we "ave them>this wee they are "oin" to ay it bac- So, that is how ;uic$y it)sbeen reso$ved-

F% (hat about the other eo$e who are beyond your contro$ heobvious case is 8/ormer Intercontinenta$ boss 6rastus .in"bo$a,who is in London or (est ./rica or wherever he is-

Lamido Sanusi: 3es, but he is not beyond our contro$- @e wi$$

come bac-

F% .re you sure

Lamido Sanusi: (e$$, at the moment we are considerin" reortin"

to the Serious Fraud 7//ice, and we are uttin" to"ether thein/ormation- (e to$d our $awyers to advise us on that- I havecontacted a so$icitor in the KM and we are "ettin" $e"a$ advice in theKM-



F% 7n etradition

Lamido Sanusi: I/ I cou$d try him in the KM it is better> I mi"ht "et

a stron"er conviction in the KM-

F% hat)s another conversation- !ut resumab$y you)re "oin" to usethe 6F55 in this and in the rea$ estate recovery as we$$, i/ you)re$ooin" abroad, Dubai and e$sewhere

Lamido Sanusi: 3es, we)ve "ot to use the 6F55, we)ve "ot to use

Intero$, we)ve "ot to trace assets,and that is why it)s actua$$y better to use the .<5 so the bans cancontinue- his is a rocess thatcan "o on /or a very $on" time- 3ou)ve "ot to trace- 3ou)ve "ot

evidence o/ movement o/ money, /orinstance, /rom bans to accounts abroad, and we need to "o tothose accounts and /ind out where themoney went /rom there and see i/ it went into assets, and see i/ wecan use the authorities in thosecountries to recover those assets-F% (here do you see "rowth net yearLamido Sanusi: Hrowth has a$ways come in the =i"erian economy

/rom a"ricu$ture and /rom "enera$commerce> those have been the maor drivers o/ "rowth- In oi$ it

dec$ined /or three ;uarters, but ithas turned around now, so that is "oin" to be another source o/ "rowth-Kn/ortunate$y manu/acturin" contribution has been minima$ andsometimes ne"ative, as the /actorieshave c$osed down- <y "reat /ocus now is to wor on what needs tobe done to "et manu/acturin" u-here are a number o/ initiatives- First, a$on" with the ministry o/ /inance, our e//orts at "ettin" a$$ theta eemtion and chan"es to the ru$es "overnin" caita$ maret

oerations to a$$ow comanies toraise cororate debt- hat wou$d "ive access to the $on"?term/undin" that is re;uired /or /inancin" theoi$ sector- Some o/ that wou$d come /rom the bans themse$ves,raisin" cororate debts, cororatebonds, and then bein" ab$e to "rant 10?, 1?year eosures tomanu/acturin" comanies, which iswhat manu/acturin" actua$$y re;uires-F% his is the who$e oint o/ the 8nascent bond maret, isn)t itLamido Sanusi: 3es-

F% 7therwise you have the maturity mismatch 8reventin" thebans doin" $on"?term $endin"-



Lamido Sanusi: 6act$y, because a$$ the time the manu/acturers

have had to borrow /romcommercia$ bans at very hi"h rates o/ interest- So, i/ we can "et10?year money at re$ative$y $owrates o/ interest because the ta re"ime says it)s ossib$e to do

that, and attract investments, thenthat addresses art o/ the rob$em- he ower re/orms address thesecond art o/ the rob$em-Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 12

7n ;uestions o/ caacity bui$din" /or S<6s, in some countries, $ie<a$aysia, you had the who$e S<6body that was chaired by the rime minister and severa$ ministers-=ow, we may not have that in

=i"eria, but you cou$d in a state, /or instance, have a "overnor whois su//icient$y committed to sit onan S<6 board- .nd then we can wor with them and see how wecan bui$d the mana"eria$ caacitythat wou$d a$$ow S<6s to borrow- So, that is the thou"ht rocessbroad$y-F% Do you have a "rowth number /or net year you)re $ooin" atLamido Sanusi: 3ou now /ran$y it a$$ deends on whether we do

thin"s ri"ht- he "rowth this year,with a$$ the rob$ems, was & er cent- I/ you too La"os /or

instance, La"os) contribution to non?oi$HD# is about 40 er cent- I/ we "ot to La"os a$one and /inanced a/ew in/rastructure roects with avery hi"h mu$ti$ier e//ect, and /inanced "rowth or the recovery o/ industries usin" the !an o/ Industry or usin" the banin" system or caita$ marets, i/ youadded ust 10 er cent to the HD# o/ La"os that is actua$$y a 4 er cent return to non?oi$ HD#-So, i/ you had an inte$$i"ent and disci$ined aroach to the rea$economy you cou$d easi$y "o into

doub$e di"its- hat is rea$$y, /or me, what the obective wou$d be-!ut then I)ve "ot to wor with theministry o/ ower, ministry o/ /inance, I)ve "ot to wor with theministry o/ industries, I)ve "ot to worwith the state "overnments-F% 3ou wi$$ have seen the websites toutin" you /or the residency-Lamido Sanusi: =o, I haven)t, honest$y-

F% Do you have any residentia$ ambitionsLamido Sanusi: =o, I don)t- I have ambitions to be the emir o/

Mano 8to !hich he is in line % *( -

??Tom Burgis



West Arica correspondentFinancia! Times"o#i!e: $234 %&'(&( 5&5 632)tom*#urgis+t*comwww*t*com

Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 13Transcript: ,nterview wit- .igeria/s new centra! #an0 governor

#ub$ished% June 21 2009 1%4 N Last udated% June 21 2009 1%4Lamido Sanusi the ne! governor of the 1entral )ank of Nigeriala's out his agenda to restorecondence in Nigeria’s banking sector in an intervie! !ith "atthe!2reen the *(’s +est &frica

correspondent on June /3.4e spoke about his plans to open Nigeria’s banks to foreigntakeovers tackle an overhang of bad debt from banks’ losses on the local stock market and tighten disclosurere5uirements. 4e also gaveinsights into his approach to monetar' polic' and delivering lo!er interest rates. 4ere are e6cerpts

from "r Sanusi’s intervie! !ith the *inancial (imes%FT: T-ere/s a -uge crisis o credi#i!it in t-e .igerian#an0ing sector in t-e opinion o manana!sts* ,t seems to man o t-e peop!e , spea0 to t-at our

undamenta! tas0 is to restoret-at credi#i!it* ow are ou going to t-at

Lamido Sanusi% In addition to the standard centra$ ban duties o/ monetary o$icy and /inancia$stabi$ity, I)ve set myse$/ two rimary tass- he /irst one is restorin"con/idence in the /inancia$system- he second one is s$i"ht$y $ess conventiona$ but it isactua$$y $ayin" an imortant ro$e as ana"ent /or deve$oment-I thin the "overnor o/ the O=i"erianP centra$ ban cannot be the

"overnor o/ the !an o/ 6n"$and, and ust ta$ about money su$y and interest rates and in/$ation- he/inancia$ system $ays such a ivota$ro$e in the economy, that the "overnor o/ the centra$ ban has tosee himse$/, even thou"h not ao$itician, as an imortant art o/ the "overnment with aresonsibi$ity /or de$iverin" economic "rowth-he /inancia$ system su//ers /rom a number o/ sources- First there isa c$ear /act, which we)ve a$waysnown, that bans do have mar"in $oan eosures O6d% eosure to

$osses on the $oca$ stoc maretP-



=ow, some o/ those bans have mar"in $oan eosures that are notin any way /ata$- heir ro/its thisyear may be $ess than their ro/its $ast year- <aybe some wi$$ maeminor $osses-here are others that I thin eo$e be$ieve wi$$ need he$ in terms

o/ recaita$isation, or maybe someencoura"ement to mer"e and conso$idate into stron"er bans- hecredibi$ity de/icit comes not somuch /rom the /act that the riss have been taen, but /rom the/act that there has been a seemin"/ai$ure to acnow$ed"e that there are rob$ems-I thin the maret wou$d understand i/ you acnow$ed"ed that therewere some rob$ems, i/ youdisc$ose the etent o/ the rob$em, and i/ you are seen to beworin" ro/essiona$$y and di$i"ent$y

towards reso$vin" those rob$ems-In my view the number o/ bans that need serious he$ is re$ative$ysma$$- Kn/ortunate$y a /ew o/ them mi"ht be systemica$$y imortant, and there/ore how it ishand$ed in terms o/ communication,how it is hand$ed in terms o/ rioritisation at this sta"e is etreme$yimortant so that in addressin"the rob$em you don)t create a bi""er one-FT: From w-at ou are saing t-en it seems !i0e t-ere aresevera! #an0s t-at ou are

concerned ma #e at ris0 o going underLamido Sanusi% =ot "oin" under- I don)t have a$$ the detai$s, butbe/ore I came in here, /or instance,there was a "enera$ sense that you had about =aira 00bn to =aira1trn in mar"in $oan eosure- I/ those numbers are true and the maret has crashed by &0 er cent,you wou$d eect that, to beotimistic, maybe 0 er cent o/ that is non?er/ormin"% another00bn- (hat you wou$d then eectto see is somethin" c$ose to that to show u as additiona$ non?

er/ormin" $oans in the boos o/ bans-.nd i/ it is not showin" u then we have "ot to /ind out where it is-=ow whether or not a ban is atInterviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 14

ris o/ "oin" under deends on the distribution o/ that 00bn- Ita$so deends on the amount o/ caita$ that the ban has- So i/ the ban has a $ot o/ caita$ and hasa $ar"e mar"in $oan eosure, itmay mae a $oss, but it wi$$ "o on- I/, on the other hand, its caita$base is sma$$ and its "ot hu"e



$evera"e and hu"e concentrations then, $ie other bans, it is atris-(e have to "o throu"h a roer dia"nostic hase and we havea$ready started that- .nd then we haveto "o throu"h a hase in which we oen u the ossibi$ities and the

otions avai$ab$e to them- Foream$e, we)ve "ot to $oo very c$ose$y at this ru$e $imitin" /orei"ncaita$ investment in bans to 10er cent because it sim$y restricts caita$-(e)ve "ot to oen u sources o/ caita$ to the bans- (e)ve "ot towor with internationa$ investmentbans, with the I<F, with whoever has eerience in those thin"s-It)s haened in <a$aysia, it)shaened in Indonesia- (e)ve "ot to revisit the issue o/ the assetmana"ement comany- So there are

a $ot o/ issues to dea$ with- @ow do you dea$ with caita$ @ow doyou mae sure that deositors donot $ose their money @ow do you dea$ with the ;uestions o/ /orei"nechan"e riss, and how do youmae sure that what has haened does not reeat itse$/FT: T-ere/s a -uge c!amour in t-e mar0et or more c!arit ont-e sie and s-ape o t-is%margin !oan' pro#!em* ou mentioned t-at a diagnosisneeds to #e done* 7ou!d ou e8pandon w-at 0ind o procedure ou wou!d envisage carring out

to do t-atLamido Sanusi% It)s etreme$y imortant that whatever we do doesnot cause a anic in the system-(e)re dea$in" with two di//erent articiants with com$ete$ydi//erent ro/i$es and mindsetsA-3ou)ve"ot on the one hand the investors, and whi$e many shareho$dersmi"ht ust be retai$ shareho$ders asubstantia$ art o/ the investments in bans is in the hands o/ institutiona$ investorsAhese are"enera$$y educated, they understand /inance and they wou$d beetreme$y hay to have the /u$$icture b$own u in the newsaers so that everybody nows- !uton the other hand you)ve "ot themi$$ions o/ retai$ deositors who wou$d easi$y ust anic i/ you sendout si"na$s that this articu$ar banhas a rob$em without uttin" in $ace the mechanism and thestructures /or reso$vin" them- Isuose the communication strate"y is etreme$y imortant as we"o throu"h-(e)ve "ot our own eamination teams, we)ve "ot our ownsuervision teams in the centra$ ban and=DI5- (hat I wou$d $ie to do is have them "o into every ban,inc$udin" those we don)t thin have



rob$ems- I wou$d start with First !an amon" the /irst batch o/ bans to "o and actua$$y do an asset;ua$ity audit and a caita$ audit and brin" a reort- O6d% <r Sanusiwas /ormer$y head o/ First !anbe/ore he too u his ost as centra$ ban "overnorP- (e wou$d

then sit down and dimension- Idea$$ywou$d $ie to brea them into three- (e wou$d $ie to brea theminto the bans which are rea$$ymar"ina$$y a//ected by the mar"in $oan thin"- he second cate"ory?? and that wou$d be the $ar"estnumber – wou$d be bans who have some mar"in $oan eosure butwho have enou"h caita$ to dea$with it-, who rea$$y have not ehibited any ind o/ $i;uidity ressuresin their ba$ance sheets-he third cate"ory wou$d those bans which seem to have a stron"

$i;uidity rob$em and maybe evena so$vency rob$em- .nd then with those bans we)ve "ot to worout a strate"y and /ran$y its notyet /u$$y wored outAhere are a number o/ otions, there are anumber o/ mode$s which havewored- he strate"y /or dea$in" with it and the strate"y /orcommunicatin" it and the remedia$ stesthat need to be taen – a$$ o/ that wi$$ have to be wored out-FT: Are ou saing t-at ou are p!anning to !aunc- an audite8ercise under t-e aegis o t-e

centra! #an0 to diagnose t-e sca!e o t-e margin !oanpro#!em

Lamido Sanusi% .nd the =DI5, yes I am-FT: ow !ong wou!d t-at ta0e do ou t-in0

Lamido Sanusi% I/ we start immediate$y you cou$d cover the 24bans in si to ei"ht wees ma-FT: W-en are ou p!anning to !aunc- t-e e8ercise

Lamido Sanusi% I have $aunched it-FT: So in si8 to eig-t wee0s ou ee! ou/!! #e in a muc-more con9dent position to rea!!understand t-e sca!e o t-e margin !oan pro#!em

Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 15

Lamido Sanusi% 3es I thin so- I wi$$- In the interim we)$$ be $ooin"at the various otions o/ how tohand$e them-FT: But it sounds !i0e ou are not p!anning to ma0e t-ose9gures pu#!ic immediate! uponcomp!eting t-e e8ercise

Lamido Sanusi% I may actua$$y- It deends on what communication

strate"y is adoted- I certain$y



wou$d eect that $on" be/ore December we be"in to a$yrudentia$ accountin" standards and wewi$$ continue to increase the disc$osure re;uirements /or bans-6ven be/ore IFBS we wi$$ decide whatwe thin bans shou$d disc$ose /rom June and /rom Setember

when they ub$ish their accounts andwhat in/ormation they shou$d mae ub$ic-FT: ,t sounds !i0e ou are p!anning to impose more stringentdisc!osure regu!ations uitesoon

Lamido Sanusi% 3es, we shou$d be ab$e to have /u$$?b$owndisc$osures by the time the /inancia$s end inDecember-FT: W-en ou sa ;u!!<#!own= w-at do ou mean

Lamido Sanusi% (e mi"ht, even be/ore the December accounts,

re;uire certain thin"s to be disc$osed-@ow much is disc$osed between now and December deends on howmuch ris we erceive to be tothe system with too much in/ormation in ub$ic hands-FT: 7ou!d ou give me a sense now o w-at tpes o 9guresou/!! #e reuiring t-e #an0s torevea! at minimum

Lamido Sanusi% I thin at the very $east, since mar"in $oans are arob$em, eo$e shou$d noweact$y what ercenta"e o/ the $oan boo is eosed to mar"in

$oans, they shou$d now eact$y whatind o/ rorietary ositions the bans are ho$din" and they shou$dnow what the va$ue is and theyshou$d now which $oans are er/ormin" and which $oans are non?er/ormin", those shou$d /orm arto/ disc$osure re;uirements-FT: W-at wou!d #e t-e 0e wa in w-ic- t-e newreuirements wi!! di>er rom t-e e8istingset up

Lamido Sanusi% Bemember the disc$osure re;uirements arere;uirements rincia$$y o/ $istin" on thestoc echan"e---he stoc echan"e sim$y re;uires some ey/i"ures, so what)s ub$ished ;uarter$ytends to be "ross income, ro/it?be/ore?ta, ro/it?a/ter?ta,sometimes one or two more $ines- heasset ;ua$ity detai$s are not there, and /ran$y this is true o/ a$$accountin" numbersAhe riscom$eion di//ers deendin" on concentrations, on industries, onco$$atera$A-Idea$$y we shou$d "etthe stoc echan"e to a"ree on the disc$osure re;uirements /or$istin", not ust /or bans but /or a$$

ub$ic comanies so we imrove in/ormation and transarency-



FT: Are ou ta!0ing a#out imposing mandator ,F?S on#an0s

Lamido Sanusi% IFBS he$s, as you now in First !an we didconvince the board to adot IFBS- !utit)s etreme$y imortant to understand that i/ the rob$em is the

inte"rity o/ data bein" resented,then IFBS does not address that rob$em- I/ it is true ?? and I)m notsayin" it)s true ?? but i/ it is truethat an institution resents si"ni/icant$y distorted /i"uresA-there isnothin" that stos them resentin"/a$se numbers under IFBS-FT: And t-at/s going to #e a pro#!em ou ma conrontt-roug-out t-is w-o!e e8ercise* owwi!! ou ensure t-at ou can actua!! #e!ieve t-e num#erst-at #an0s are presenting ou

wit-Lamido Sanusi% hat is what this who$e eercise is about% send ourown eo$e to chec- I thin we dohave ways o/ testin" those numbers- I)ve a$ready to$d you that i/ you have an idea o/ the "$oba$icture then you wou$d eect certain resu$ts that you wou$d see-Statistica$$y thin"s can oint you toareas that $oo susicious- So /or eam$e, i/ the bu$ o/ bans havemar"in $oans and on avera"e you/ind that 40?0 er cent are non?er/ormin" and a articu$ar ban

has on$y er cent that is noner/ormin",that is enou"h reasons to say Q"o and $oo at those numbersc$ose$y-) here is a$ways away o/ "ettin" an idea o/ where the wron" numbers are-I thin it)s a$so imortant to send very c$ear si"na$s to baneecutives that it)s not a crime to mae a$oss, but it)s crimina$ to $ie about it, and eo$e need to understandthat- It)s actua$$y better to disc$oseInterviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 16

truth/u$$y that we had a bad year, or we made a mistae, than todeny that there)s a rob$em- It "oesinto "overnance issues, into sanction issues, into /it and roerissues-FT: W-en ou conduct t-is audit t-en ou wi!! #e !oo0ingout or evidence o #an0s t-atma -ave not #een dec!aring trut-u! num#ers* Wi!! ou #esee0ing to sanction an #an0st-at ou 9nd -ave #een manipu!ating t-eir #oo0s

Lamido Sanusi% 3ou wou$dn)t sanction a ban- 3ou wou$d as much

as ossib$e see what you can do



about decidin" whether certain individua$s be$on" in this ro/ession-he bans are so much bi""erthan individua$s- It)s imortant, I thin, /or the investor to nowthat there are many staeho$ders in/inancia$ institutions- he ban mana"in" director is one erson-

hese bans have mi$$ions o/ deositors, they)ve "ot mi$$ions o/ shareho$ders, they)ve "otthousands o/ em$oyees and they $ay amaor ro$e in the economy- In the event o/ /indin" out that amana"ement team has been errant, it)setreme$y imortant that in dea$in" with that rob$em we do not$ace the investors, the deositors,the em$oyees and the economy at ris- It)s about that ba$ance, butcertain$y we)re not "oin" toi"nore it-

FT: , t-is audit revea!s t-at some #an0 e8ecutives -ave#een coo0ing t-e #oo0s i ou !i0eou wi!! ta0e action to remove t-em rom t-eir posts

Lamido Sanusi% =ot ust this audit ?? i/ at any oint in time I havereason to be$ieve that a ban chie/ eecutive is not /it to be chie/ eecutive I wi$$ remove him-FT: W-at/s our gut ee!ing @o ou t-in0 t-at in t-e ne8tew mont-s we/!! see a ew #an0 c-ie e8ecutives !eaving t-eir o#s

Lamido Sanusi% I wou$d rather not say anythin" about that- I wou$d

rather wait /or the resu$ts-FT: our predecessor was sometimes accused # -is criticso -aving a rat-er cosre!ations-ip wit- some senior #an0ers and some peop!e int-e mar0et #e!ieve -e wascompromised as a resu!t* %d: "r So!udo denies t-is'* ,tsounds !i0e rom t-e !anguageou/re using ou are 0een to ta0e a muc- toug-er !ine*

Lamido Sanusi% I have avoided main" any comments about myredecessor that are adverse- Iwou$d rather continue $ie that- !ut I do be$ieve that the dividin"

$ine between the re"u$ator and theoerator needs to be very c$ear and I need to be very c$ear aboutmy ro$e as a re"u$ator, and thatinc$udes creatin" a $eve$ $ayin" /ie$d- It a$so inc$udes very c$ear$yavoidin" ;uestions o/ con/$ict o/ interest- I wi$$ "ive you an eam$e- I have ust $e/t First !an, andas an em$oyee o/ First !an I had$oans that were sta// $oans at concessionary rates- Ksua$$y, whathaens in institutions $ie that iswhen you have $e/t they $eave your $oans at that concessionary rate-

7ne o/ the /irst thin"s I did was



to ca$$ the <D and say I wanted my $oans converted to acommercia$ rate, recise$y because I am the"overnor o/ centra$ ban- I did not tae advanta"e o/ theoortunity to ust $eave the $oans at thatrate because I)ve "ot to set /or myse$/ standards i/ I intend to ho$d

other re"u$ators to thosestandards- I thin we need to mae that distinction c$ear and wea$so need to understand that thereare certain circumstances that cou$d $ead to con/$ict o/ interest, andwe need to be very e$icit in ourde/inition o/ those circumstances- 3ou may not avoid everythin",you may not sto eo$e /romborrowin" /rom bans, you may not sto eo$e buyin" shares inbans, but then i/ they do, to whatetent (hat are the terms (hat are the disc$osure re;uirements

(e)ve "ot to $oo at a$$ o/ thoseand "enera$$y imrove "overnance-I wou$d ersona$$y say senior re"u$ators shou$dn)t be shareho$dersin the institutions that theyre"u$ate- I ersona$$y wou$d se$$ any shares I own in any bans-(e a$so need to sit with other re"u$atory bodies and a"ree on acode o/ conduct /or re"u$ators- herob$em is not ust the centra$ ban- . $ot o/ this rob$em has a$socome because o/ "overnance issuesin the stoc echan"e, the Securities and 6chan"e 5ommission,

ru$es around insider?tradin", ru$esaround mar"in $endin", the conduct o/ stoc broers- here hasbeen a "enera$ rob$em in thiscountry where we de?re"u$ate and $ibera$ise and rivatise and thenwe don)t ut in $ace thearoriate re"u$atory mechanism- he institutions are there, but interms o/ what it means to be are"u$ator, there has been a constant rob$em- .nd marets whenthey are $e/t unre"u$ated can comewith rob$ems-

Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 1CFT: Some o t-e issues t-at we/ve #een ta!0ing around interms o transparenc in terms o separation #etween regu!ator and operator << c!ear! ou#e!ieve t-ese t-ings need to #eimproved* W- s-ou!d we -ave con9dence in our a#i!it tomanage it

Lamido Sanusi% First o/ a$$, it)s imortant to note that whi$e itdoesn)t ecuse what)s haened in this

system, the issues o/ bans, and their numbers and theirrec$essness and re"u$ation have been



issues a$$ over the wor$d- he FS. has itse$/ ut u its hands andsaid Qwe didn)t re"u$ate hed"e /unds,we didn)t re"u$ate these roducts, we a$$owed bans to "o into sub?rime mort"a"es) and the !ritisheo$e have aid a rice- .mericans have /aced the same situation-

=i"eria is not uni;ue in thatresect in terms o/ the /ai$ure o/ re"u$ation- (hat we)ve "ot to do isto do what everybody e$se hasdone, to ut u our hands and say Q"uys we made a mistae) and/i it-FT: Diven t-e act t-ese mista0es -ave #een made given t-euestions t-at -ave #eenraised in t-e past a#out t-e !eve! o supervision at t-ecentra! #an0 -ow wi!! ou ensuret-at t-e centra! #an0 as an institution can regain its

credi#i!itLamido Sanusi% . $ot deends on what we do- hese rob$ems arenot "oin" to be /ied in a wee ortwo- 3ou)ve "ot to dea$ with the immediate rob$ems o/ $i;uidity andthe surviva$ o/ institutions-3ou)ve "ot to dea$ with the issues o/ so$vency and caita$ ade;uacy-3ou)ve "ot to dea$ with the toic assets – and those are a$$ com$eissues, how do you tae themout .nd i/ there is a costs to be borne by the =i"erian eo$ewhere that money is "oin" to come

/rom at this time o/ economic me$tdown- 3ou)ve "ot to dea$ $on"?term with ris mana"ement systems,ris?based suervision, how to dea$ with subsidiaries, cross?bordertransactions- It)s an on"oin"rocess- he maret be"ins to have con/idence when it)s convincedthat the re"u$ator understandswhat these issues are-FT: Wou!d ou consider #ringing in an e8terna! actor suc- ast-e ,"F w-ic- wou!d -e!p t-ecentra! #an0 to perorm t-ese sorts o tas0s in a wa t-atwou!d restore t-at credi#i!it

Lamido Sanusi% (e wor very c$ose$y with the I<F, and we wou$dwor c$ose$y even with rivatesector oerators- I wou$d wor with the I<F, I wou$d wor with the(or$d !an, I wou$d wor withinternationa$ investment bans who have eerience in those areas,I wou$d wor with $oca$investment bans and re"u$atory a"encies, so there are a numbero/ arties invo$ved- here is the$eve$ o/ "ivin" ideas and brin"in" eeriences /rom other countries-here is the $eve$ o/ brin"in" in

resources and caacity bui$din" within banin" suervision withinthe centra$ ban, to stren"then the



caacity o/ em$oyees to understand banin" riss- here is the;uestion o/ caacity bui$din" withinthe bans themse$ves-<y rimary resonsibi$ity at this oint in time is to restore hea$thand con/idence in the system and

not hasten its death ?? it)s ust that ba$ance- he /undamenta$reasons /or caita$ comin" to =i"eriaremain there% you)ve "ot a country o/ 10m eo$e, you)ve "ot aneconomy oeratin" /ar be$ow itscaacity- I/ you do the ri"ht thin"s on ower and in/rastructure andstimu$ate "rowth, otentia$$y theuside is amain", but there are riss-FT: Doing #ac0 to t-e uestion o margin !oans ou/ve saidt-at ou want to diagnose t-epro#!em* W-at are t-e options t-at ou are !oo0ing at or

dea!ing wit- t-ese assets onceou/ve 9gured out -ow #ig t-e pro#!em is

Lamido Sanusi% he /irst thin" obvious$y is that bans have toreco"nise $osses i/ they are $osses-(e)ve "ot to now how much is true caita$ that every ban has-(e)ve "ot to $oo at the ossibi$ity o/ tain" those assets o// their boos- I/ a ban has wea caita$ and itwants to raise caita$, theinvestor mi"ht want to have c$ean ba$ance sheetAhat mi"ht meansteri$isin" those assets, ho$din"

them unti$ the maret recovers and so on-FT: Are ou considering t-e idea o creating an assetmanagement compan t-at wou!d #uup t-ese to8ic assets

Lamido Sanusi% I thin it)s a very stron" ossibi$ity, and it)s one o/ the otions on the tab$e- he on$ythin" is that the asset mana"ement comany, even i/ set u, wou$don$y tae o// assets a/ter theowners have taen the hit- (e)re not "oin" to tae on assets atcost- hey)ve "ot to be roer$ywritten?down on the boos o/ bans-(hat bans need to understand is that banin" is a business- (henthe stoc maret was "oin" usome bans too riss and made a $ot o/ money /rom the stocmaret- I/ it "oes down they tae theInterviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 1(

$osses- .s somebody once said, you cannot rivatise your ro/itsand socia$ise your $osses- hat is /orme a minimum- hey)ve "ot to tae their $osses, and then we wi$$

do everythin" we can to mae surethey don)t "o under-



FT: , t-oug- t-ere are some #an0s t-at -ave sustained somuc- o a !oss t-at t-e can/tsurvive w-at wi!! -appen to t-em

Lamido Sanusi% <y intuitive /ee$in" is that there isn)t any ban thatcannot survive in one /orm or the

other, either in the /orm o/ "ettin" some o/ the stron"er bans tout in e;uity and mer"e with themor invitin" /orei"n bans and $ettin" them a"ree the conditions /orthem to invest caita$ andmana"ement and revive the ban- Fundamenta$$y, these bans have$ar"e branch networs, they)ve"ot hu"e investments in in/rastructure, they)ve "ot a wide anddiversi/ied customer base, they)ve "otthere/ore access and otentia$ /or "rowth- !anin" remains/undamenta$$y an attractive business, and

/or that reason there is a$ways the ossibi$ity o/ /indin" someso$ution-FT: ,t sounds rom w-at ou are saing !i0e t-ere is a strongc-ance t-at t-ere ma #emore conso!idation in t-e sector as t-e e8tent o t-e !ossesat some #an0s #ecome 0nown

Lamido Sanusi% hat)s my /ee$in", that there wi$$ be conso$idation,that)s what I thin-FT: ow man #an0s wou!d ou !i0e to see in .igeria

Lamido Sanusi% I don)t have a tar"et- <y sense is that we mi"ht

end u with /i/teen bans-FT: T-is conso!idation ma #e triggered essentia!! # t-eaudit process t-at ou/re doing*As t-e regu!ator wi!! ou step in to encourage conso!idationamong certain #an0s i ou ee!t-at it is necessar

Lamido Sanusi% I wou$dn)t /orce any conso$idation but I thin it)simortant to send out si"na$s to thebans that may have di//icu$ties that mer"in" with stron"er bans iscertain$y a very "ood ossibi$ity/or savin" themse$ves and savin" their shareho$ders and their

businesses- .nd we wou$d try to createan environment that encoura"es that- (e wou$d try to encoura"e/orei"n bans that are comin", not

ust with money, but with mana"ement and systems, to come inand ac;uire- !ut we wi$$ not /orceany ban, or ush any ban to mer"e- (e are not "oin" to have a!an o/ .merica?<erri$$ Lynchsituation-FT: As , understand it under t-e current regu!ations t-ereis a !imit on oreign owners-ip

Lamido Sanusi% In theory yes- he $aws o/ =i"eria do not restrictthat- he centra$ ban obvious$y has



the authority to arove- (hat we have today is that the centra$ban is not $ie$y to suort a /orei"nban ownin" more than 10 er cent o/ a to tier =i"erian ban-hat is somethin" that in my viewneeds to be $ooed at a"ain-

FT: W-ere wou!d ou !i0e to see t-e upper !imitLamido Sanusi% I wou$d not $ace an uer $imit-FT: So ou wou!d open t-e possi#i!it t-at a oreign #an0 wou!d acuire a .igerian #an0 outrig-t

Lamido Sanusi% hat)s the $aw, those are the $aws that we have in=i"eria-FT: ave ou #een approac-ed # an oreign #an0s w-o aresee0ing to ta0e a position in.igeria

Lamido Sanusi% I have not met any /orei"n ban-FT: But it sounds !i0e our vision or t-e sector t-en isper-aps again a di>erent one romour predecessor w-o came out a ew times and did ma0estatements a#out !imits onoreign owners-ip* ou are sounding !i0e ou wou!d preer toopen t-e 9e!d ver muc- tooreign p!aers

Lamido Sanusi% I thin my vision has a$ways been di//erent /rom myredecessor)s- (e)re twodi//erent eo$e- 7n this articu$ar matter, my view has a$ways beendi//erent-Loo at this way, i/ you $oo at the re"ister o/ many bans, you)ve"ot shares that are owned bynominees- =ow I don)t now who these nominees are- .nd I be$ieveunder the $aws in which they areset u, the nominees are not ob$i"ed to disc$ose the ersons behindthem- So i/ as Hovernor o/ 5entra$Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 1)

!an I am oay to have a ban owned by nominees and I don)tnow who owns them, why wou$dn)t Ibe com/ortab$e with a ban owned by a !arc$ays, or @S!5 or 5hina5onstruction !an, who I nowFor me it)s a no?brainer-.t the end o/ the day, the ban taes on the character o/ its owners-he "reater transarency I havein the ownershi o/ a ban, the better run that ban wi$$ be-FT: ,s our ee!ing t-en t-at we/!! see oreign #an0s 0een toget into .igeria and doing so

in t-e coming mont-s



Lamido Sanusi% I do hoe they wi$$ be interested, and I do hoethey wi$$ understand that theeconomic /undamenta$s remain very stron"- .art /rom thisrob$em with the /inancia$ system, oi$rices have turned, the "overnment is c$ear$y re?ener"isin" itse$/-

here is ro"ress in ey areas-In/$ation is comin" down- (e are "oin" to see what we can do abouthavin" $ow interest rates asmuch as ossib$e and encoura"e the rea$ sector to "row-I wou$d hoe that the ana$ysts in those bans wou$d see that as$on" as the centra$ ban is addressin"the issue o/ con/idence and transarency in the /inancia$ system,=i"eria sti$$ remains the bestinvestment destination on the continent-FT: ow !ong do ou t-in0 t-is sstem o auditing and t-en

imposing toug-er regu!ationsand addressing t-e pro#!ems o t-e wea0er #an0s wi!! ta0e#eore ou -ave t-e sector ont-e sort o ooting ou wou!d !i0e to see it

Lamido Sanusi% . $ot deends on what ind o/ in/ormation we comeu with- I have set myse$/ a tar"eto/ December, and the very $atest <arch, to have conc$udedeverythin" I need to do- (e cou$d ust /indthat a$$ that the bans need is to dec$are $osses and they have "otenou"h caita$ do that and we

move on, or we cou$d /ind there is caita$ that cou$d be brou"ht ineither by the owners or by othereo$e- 7r we cou$d /ind – and this is the rea$ity – that some havestarted ta$in" to other artnersand they)ve ust not disc$osed it, and a time wi$$ come when theywi$$ announce that they are ready-FT: Diven t-at t-e centra! #an0 -as a!!owed #an0s toresc-edu!e t-eir margin !oans unti! t-eend o @ecem#er t-is ear do ou t-in0 t-at wi!! serve toconcentrate minds and ma0e suret-at t-ese issues are tac0!ed

Lamido Sanusi% I don)t have any issues with restructurin", evenbeyond the end o/ this year- (hat isimortant is that i/ they are non?er/ormin" O$oansP then theyshou$d be reco"nised as that- I/ theyare restructured and a$$ the income is taen in on the assumtionthat it)s "oin" to come bac then weare $ivin" in the dream that the marets wi$$ "o bac to the hi"hsthat they were at and that)s not$ie$y to haen- (e wou$d wor on the most conservative andrudentia$ basis and see how thin"s

"o-



!ut as a ris mana"er I can te$$ you that mar"in $oans are not arob$em they are a symtom-he rea$ rob$em is weanesses in ris mana"ement systems- 3oumay /ind that a ban has seriousmar"in $oans rob$ems but it a$so has other rob$ems in other

ort/o$ios, whether it)s oi$ and "as orrea$ estate and so on, so we don)t now-FT: ou/ve out!ined measures t-at ou want to ta0e t-at wi!!ta0e a considera#!e amount o wor0 presuma#!* @o ou t-in0 t-e centra! #an0 itse! actua!! -as t-e institutiona! capacitto carr t-ese out

Lamido Sanusi% I did say that we are "oin" to wor with institutions$ie the I<F on caacity bui$din"-I a"ree tota$$y that there are si$$s issues- I was a ris mana"er out

there, and I used to te$$ there"u$ators that they never rea$$y ased me the ri"ht ;uestions- #arto/ the advanta"e o/ me bein" hereis that it is rea$$y an area where I /ee$ retty com/ortab$e- I havemade my own mistaes as a rismana"er and I have $earned /rom them- !ut I have a$so come /rommana"in" ris in a bi" /inancia$institution there/ore understandin" how do you $oo out /or theinds o/ thin"s that cou$d $ace aninstitution at ris I wi$$ try to ass on a $ot o/ that to those in

banin" suervision and "ive "uide$ineson eact$y what I want them to $oo out /or-FT: We/ve seen t-e centra! #an0 tr to adopt measures int-e past t-at -ave essentia!!#een reversed under pressure rom t-e #an0s t-emse!ves*We 0now t-at man senior

Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 2&#an0ers are poweru! individua!s in .igeria wit- poweru!riends wit-in government* We/ve

a!so seen in man ot-er parts o t-e econom attempts o t-e 0inds o reorms ou areta!0ing a#out running aground #ecause o entrenc-edvested interests t-at -ave an interestin t-e status uo* W-at gives ou con9dence t-at ou wi!!#e a#!e to muster t-e po!itica!wi!! to c-a!!enge t-e vested interests

Lamido Sanusi% he /irst thin" is that I am not a o$itica$$y?connected erson and I)m not art o/ anyvested interests, but the /act that I was aointed by the resident

to this ob wou$d su""est that he



is wi$$in" to have chan"e- he ersona$ assurances I have received/rom the resident are that hewou$d "ive me his tota$ suort in everythin" that I /ee$ I need todo to sanitise the /inancia$ system-<y sense is that he was concerned about the same ;uestions you

are raisin", about concerns bein"raised about the credibi$ity o/ the /inancia$ institutions, and he wou$d$ie those to be addressed- .t themoment I can on$y move on con/ident$y with the suort o/ theresident-FT: ou mentioned t-at an asset management ve-ic!e ma#e one o t-e possi#i!ities ouwou!d !oo0 at in terms o dea!ing wit- t-e margin !oans* @oou t-in0 t-e government is ina position to #e a#!e to a>ord t-ose assets

Lamido Sanusi% I to$d you it was one o/ the otions we are $ooin"at that- .t the moment we do havemoney "iven to bans in the eanded discount window and it)sbeen there /or some time- (e wou$ddo everythin" we need to do- @ow we do it, how we disc$ose it, wi$$have to be based on a rea$isticestimation-FT: 7ou!d ou envisage a situation w-ere t-ere wou!d #egovernment<appointed #oards-aving to run some o t-ese #an0s

Lamido Sanusi% I wou$d not $ie to have that- It wou$d be a $astresort- hey)ve "ot boards- I/ youneed to have a transition in the institution, the boards can aoint anew 567- I don)t thin there iscome$$in" evidence that in the ast havin" "overnment o//icia$smana"in" /inancia$ institutions haswored- <y re/erence is to "et rivate caita$-FT: Are t-ere steps t-at ou mig-t ta0e t-at wou!dencourage it

Lamido Sanusi% I wou$d send the si"na$s that I wou$d try to createas much as ossib$e anenvironment that wou$d mae it ossib$e ?? i/ it means showin"some /$eibi$ity, i/ it means "ivin"some /orbearance, i/ it means rovidin" some incentives- 7n a netcost? bene/it basis, i/ it is seen thatthose incentives, or those /orbearances, wou$d cost the =i"erianeo$e much, much $ess than havin"to ut in caita$ in those bans and then mana"e them, then Iwou$d mae the recommendations-K$timate$y, the decision as to how /ar the "overnment wi$$ "o is thato/ the resident, and I wi$$ have

to discuss with him-



FT: Ene cou!d easi! sa t-at ou/ve come -ere to c!ean upt-e sstem* ,s t-at -ow ouenvisage our ro!e

Lamido Sanusi% In the short?term, that)s a ro$e, but this is a /ive?year ob, and the economy is a $on"term

issue- <y ro$e sti$$ remains the /undamenta$ ro$e o/ the centra$baner- I need to ensure we haverice stabi$ity, I need to rotect the va$ue o/ the nationa$ tender, Iwou$d $ie to see that we ush /or$ower interest rates and stimu$ate "rowth in the economy-FT: We/ve got t-is current cap on deposits on !ending at 15and 22 per cent* @o ou -avep!ans to !it t-at

Lamido Sanusi% I don)t thin there)s a ca in the sense o/ thecentra$ ban sayin" Qyou can)t $end more

than this)- he !aners 5ommittee met and it)s art o/ a discussion-I wou$d robab$y use a $ot o/ mora$ suasionA/or bans to understand that the $on"?term "rowthand $on"?term surviva$ o/ our banswi$$ have to deend on stabi$ity and "rowth in the rea$ economy, andthat sometimes some decisionsthat may seem to tae a hair?cut o// today)s ro/its are not unwise i/ they are "oin" to $ead to $on"termincome streams- .t the same time we)ve "ot to address some o/ the/undamenta$ reasons /or

hi"h interest rates- oday you)ve "ot a very wide diver"encebetween the monetary o$icy rate and=I!7B and a"ain it "oes down to your ;uestion o/ credibi$ity,because we)ve "ot bans who have "ot atremendous amount o/ $i;uidity but they are not $endin" to otherbans, so the money comes in ?bi$$sand to the centra$ ban- .s we be"in to address issues o/ transarency and ris in those bans and"et money movin" /rom ban to ban you brin" down interestrates- I am one that is more /ormaret?based so$utions and mora$ suasion-Interviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 21FT: T-ere is a perception in t-e mar0et t-at t-ese #an0s-ave -ad to agree to t-ese caps ondeposits and !oans* Are ou -app to see t-ose !imitscontinue in t-eir current orm orwou!d ou !ean on t-e side o t-em #eing removed

Lamido Sanusi% (e wi$$ have to discuss at !aner)s 5ommittee-(hat I wou$d $ie to do is to see i/ we

can have o$icies and ideas on how usin" ure$y maret?basedso$utions, interest rates come down- I



thin 24 er cent is too hi"h, as a $endin" rate-FT: But ou are not going to impose or !it restrictions

Lamido Sanusi% <y economics te$$s me that any inds o/ imositions$ead to b$ac marets-FT: ,s t-at 22<15 per cent #and going to #e c-anges in t-e

near utureLamido Sanusi% here isn)t a circu$ar on this, this was a "enera$a"reement by the bans- I/ the bansdecide they want to chan"e then we wi$$ $oo at that- .t themoment it)s a decision taen by the bansthemse$ves-FT: W-en do ou t-in0 we wi!! see t-e u!! !i#era!isede8c-ange rate regime restored

Lamido Sanusi% I don)t want to say at the moment- he centra$ban has said three months, but I

be$ieve we shou$d do it ear$ier, but I can)t say when-FT: W-at is our vision going orward or t-e 0ind o monetar po!ic strateg ou want

Lamido Sanusi% I thin i/ there is anythin" that centra$ ban hasdone very we$$ over the ast /ewyears it)s been monetary o$icy- (e did have hiccus, natura$$y,durin" the me$tdown, but monetaryo$icy has been etreme$y "ood- he centra$ ban has et a ho$don money su$y- It)s "rownbecause o/ the need to rovide $i;uidity to the banin" system,

in/$ation is comin" down- his is thesecond consecutive month it)s comin" down- (e wi$$ aim to see i/ we can brin" it down to sin"$e di"itsby the end o/ the year- 7bvious$y it)s a rob$em eein" in/$ationdown, eein" interest rates downand havin" a stron" echan"e rate – the *Knho$y rinity+ thateconomists a$ways dea$ with- I wou$d$ie to ee in/$ation down, and I wou$d $ie to brin" down interestrates, and then deendin" on whathaens to the oi$ rice, and revenues and caita$ /$ows, I wou$dhoe the =aira wi$$ ho$d- !ut $on"termI thin $ower interest rates are /ar more /undamenta$ than a verystron" echan"e rate-FT: ow does one move awa rom t-e current situationw-ere t-e !eve! o !iuidit is vermuc- -ostage to t-e oi! price ow can ou #ui!d t-einstitutiona! capacit now and po!icresponses t-at wou!d mean in 9ve ears or ten ears t-at.igeria wou!d #e a#!e to avoidt-e #ig s-oc0s we/ve seen t-at -ave #een driven # t-eseuctuations in t-e oi! price

Lamido Sanusi% 5an you te$$ me one economy in the $ast ei"ht, ninemonths that has not had



echan"e rate shocs he Knited States, the do$$ar, the ound, theeuro, the Bussian roub$e – none-(e $ived in abnorma$ times- (hat haened to the =aira haenedto every maor currency- It)s notan iso$ated incident and I wou$d not $ie us to ud"e monetary o$icy

by what haened to the =aira-(hi$e ersona$$y I thin that some o/ the contro$s that wereintroduced were not tota$$y necessary,they were nothin" in terms o/ what Bussia introduced or Kraine-(e never had caita$ contro$s in thestrict sense- 3ou now we are $ivin" in abnorma$ times and what weneed to do is to move as ;uic$yas ossib$e bac to norma$ity and not to anic-FT: ,sn/t t-e pro#!em t-at t-e po!ic -as #een up to now topeg t-e .aira to t-e GS do!!ar

and -aving t-is pegged currenc to some e8tent restrictsour room or manoeuvre in termso monetar po!ic

Lamido Sanusi% I don)t thin we)ve ever had a e"- here)s beenstabi$ity- It)s been a mana"ed rate inorder to mana"e eectations because o/ the $ar"e amounts o/ imorts- here has been an attemt tohave some semb$ance o/ stabi$ity- I thin we had a situation inwhich it was very c$ear that thestabi$ity around the band that we had was not sustainab$e "iven

where oi$ rices were- (e are very/ortunate that there seems to be a reversa$, I don)t now howsustainab$e that is-!ut we need to understand that the echan"e rate in =i"eria hasbeen a sensitive issue rimari$ybecause the e$ites tae an interest in it- he e$ite who have to buydo$$ars to ay their chi$dren)s schoo$/ees abroad, who "o on summer ho$idays, who want to "o and "etmedica$ care in the KM, who wantto attend con/erences abroad- !ut ima"ine what a three?, /our? /ive

hundred basis oint reduction ininterest rates does in terms o/ the consumer and their abi$ity to buycars, to bui$d houses, to /inanceconsumer demand, /or /actories to recruit and "row- he interestrate is /ar more imortant than theInterviews with Lamido Sanusi – June 21 and December 14, 2009by Fwww.proshareng.com 22

echan"e rate, but because the echan"e rate is tied to e$ite ando$itica$ interests it taes on a "reatsace- #art o/ our ob is a$so to try and communicate with data andwith $o"ica$ ar"uments that it is



imossib$e to eat your cae and have it and sometimes you may ust have to be wi$$in" to a$$ow the=aira to move in order to reserve your /orei"n echan"e i/ there)sa rob$em with your in/$ows- 7nthe other hand, it)s a$so imortant to remember that i/ we are ab$e

to attract /orei"n investment thenthe =aira is stren"thened anyway-FT: ,sn/t t-e pro#!em in .igeria t-at t-e monetar po!ic isto a !arge e8tent -ostage touctuations in wor!d oi! prices* W-at , am as0ing is w-at/sour vision or sa 9ve earsdown t-e !ine to s-ape monetar po!ic in suc- a wa as to#rea0 t-at !in0

Lamido Sanusi% I don)t thin it)s hosta"e to wor$d oi$ rices, but it)shosta"e to /isca$ dominance- So

/or eam$e, i/ the "overnment had actua$$y im$emented orcontinues to im$ement the ideas on/isca$ resonsibi$ity, where you wou$d have a bud"et that)s based onan assumtion o/ an oi$ rice, andanythin" over and above that rice actua$$y "oes into an ecesscrude account, and then that is usedto su$ement any short/a$$s, you wou$d have "reater stabi$ity interms o/ money su$y- !ut i/ the"overnment chooses to send a$$ the money that it "ets when therice "oes u and then ends u with

nothin" when the rice "oes down then you "et those /$uctuations-It)s not so much the rice o/ oi$,but "reater harmony between monetary and /isca$ o$icy and"reater /isca$ disci$ine-FT: Some peop!e sa t-at t-e !eve! o coordination #etweent-e 9nance ministr and centra!#an0 -as rea!! wit-ered recent!* Wou!d ou agree wit-t-at

Lamido Sanusi% 3es, I a"ree with that tota$$y- I thin the *autonomy+ o/ centra$ ban has been taento an etreme where it)s a$most an is$and on its own- <y own idea isthat the centra$ ban "overnor isa art o/ "overnment and I wou$d wor very c$ose$y with the /inanceminister- I wou$d $ie to worvery c$ose$y with other ministers, the Federa$ 6ecutive 5ounci$- Iwou$d $ie to see myse$/ very muchas a art o/ overa$$ "overnment economic o$icy- I/ we are ab$e towor as a team I thin we wi$$ beab$e to address some o/ these issues- he so$ution is more or $esso$itica$-FT: Ene o t-e t-ings we ta!0ed a#out was transparenc*

Wou!d ou start saing w-ic-#an0s are accessing t-e e8panding discount window



Lamido Sanusi% =o, I don)t even thin it)s necessary- he maretwi$$ have to trust me when I amsayin" I am doin" somethin" about it and the resu$ts wi$$ be shown-FT: T-ere/s #een a perception t-at t-ere/s ver muc-ragmented regu!ation* ow wi!! ou

en-ance t-at oversig-tLamido Sanusi% here is a /inancia$ system survei$$ance re"u$atoryconsu$tative commission that hasnot been e//ectiveAI $an to wor very c$ose$y with =DI5, with#encom, S65 and the stoc echan"eand try to harmonise an aroach, and try to send oint teams tosuervise and try to $oo at the/inancia$ system as a who$e and see how we can each $ay our artin addressin" these issues-FT: ow #ig a sstemic ris0 do ou see to t-e #an0ing

sstem at t-e momentLamido Sanusi% I don)t see a ris that we cannot mana"e- I thinthere are stress oints, and we)retryin" to dimension those stress oints- (e wi$$ re$ease in/ormationto the maret- Some o/ thatin/ormation wi$$ be re$eased by the bans themse$ves- (e wi$$ asthe bans to re$ease thatin/ormation- (e aea$ /or a $itt$e time- (e aea$ /or con/idenceand trust- !ut we don)t thin there)sany reason to anic-

FT: W-ere wou!d ou !i0e to see t-e .airaLamido Sanusi% 6ven a/ter tota$ $ibera$isation and de?re"u$ation, i/ oi$ rices ho$d /irm there)s noreason why the resent o//icia$ rate cannot be a "ood tar"et /or a$ibera$ised rate-5oyri"ht he Financia$ imes Limited 2009

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