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Who’s Your Daddy? The Economic Recovery’s Paternity Suit

This week on Street Talking in NEXT I discuss the diversionary dispute between two groups, the Renaissance Professionals and Vision for Greater Nigeria, over the ascription of credit for the first buds of the economic recovery. Since September 2009, when the Renaissance Professionals launched its fusillades against the changes implemented by Lamido Sanusi, the governor of the Central Bank of Nigeria, both groups have been locked in a media gunfight over the real intent and results of the banking sector reforms.

In primary school, the playground scene of children contesting ownership of a lost-and-found item was a familiar one. ‘It’s mine.’ ‘No, it’s mine.’ ‘I found it first. Hand it over.’ So it went. Normally, it was easy to ascertain ownership. A secret marking here, an etched name there and that was that. If you really think about it, we lost the economy in 2008. Now it is found, a few grownups with fat cheque books and thin identities have decided that rather than savour the cooling relief of an easing economy, they should quarrel over its antecedents.

When the economy began its downward tilt in 2008, no one owned up to the role they played in the excesses that spiraled out of control. The bankers, regulators, stock brokers, portfolio managers, central bankers and government officials joined in one accord to say, ‘Mea culpa? Not me.’ The crisis, they unanimously concurred, was caused by the global-this-and-global-that. ‘It had no local causes and we had no hand in it,’ they chorused.

Then the recovery started and the stock market picked up. Suddenly, the worst is over and the optics far too tempting. Two groups of claimants have now stepped forward to contest its ownership.

On one side, critics of the government’s policy interventions claim that the rescue efforts especially those that imposed changes in corporate control were done in bad faith as the situation was never as dire as initially presented; while on the other side, supporters of the government’s direct involvement in corporate management argue that the bounceback is evidence of the investor confidence that the government has successfully restored. While the government’s supports are staking ownership of the recovery, its critics are crying foul.

I find it amusing that had the economy never flickered back to life both groups could justifiably excuse themselves? While the government’s partisans would hold it up as proof that the situation was so far gone nothing could save it, its antagonists would counter-argue that the very act of intervention panicked investors and transformed amber beeps to scarlet alarms.

In the past eight months, these two groups, the Renaissance Professionals and the Vision For Greater Nigeria (V4GN) have spent several millions running full page advertorials on the economic results of the government intervention. While the former have attacked the government’s intervention in the banking sector as ill-thought out and counterproductive, the latter have celebrated the Central Bank of Nigeria’s actions as timely and lifesaving.

Responding to a statement by the CBN governor that the frothy valuations enjoyed by many stocks will not return in the near term, the Renaissance Professionals branded him an ignoramus. According to the group ‘the performance of stocks since the beginning of the year only shows that Mallam Sanusi is a doomsday Prophet, prophesying over what he has limited knowledge of. It is on record that the banking index has returned 14.3 percent in just three months. . . Even the banks that the CBN took over . . . have gained an average of 16 percent to 43 percent in the last three months. . . This trend only shows that Mallam Sanusi was absolutely wrong when he said that these stocks have no chance of recovery. It only shows that he knows nothing about how the capital market works.’ (‘Central Bank of Nigeria (CBN) Governor’s Statements: Showcase of Pedestrian Knowledge’). Rich stuff.

Repelling their statement, the Vision for Greater Nigeria, another nebulous fraternity, has asserted that ‘the stability we are enjoying now in the financial sector did not just happen. It is the result of well-thought out monetary policies put in place by the CBN to achieve its clearly spelt out objectives . . . the emerging conducive atmosphere engendered by the financial stability achieved over recent times, especially in the first quarter of 2010, has fueled steady growth in both the banking sector and capital market.’  (‘Central Bank of Nigeria Banking Reforms: Stabilizing the Financial Sector’). I may be getting ahead of myself, but maybe V4GN should be renamed the Lamido Sanusi Fan Club.

There is an old proverb that success has many family members, but failure is an orphan. At this rate, a DNA test may be in order. To do that we need blood samples, not from the disputed child this time, but from the contending fathers. Wouldn’t it be nice if the Renaissance Professionals and Vision for Greater Nigeria appeared on TV for a public debate to set the record straight? These two paragons of opacity whose only contacts are mobile phone numbers and email addresses should forget who the recovery’s daddy is. What I want to know is who their own sugar daddies are. I suspect they will be hiding their birth certificates for a long time to come. Legitimate children do not conceal the circumstance of their birth.

The original article can be read here on the NEXT website.

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