MOOTBOXEcon. In Plain English

The CEO of one of Nigeria’s bigger banks says there no need for a bank bail , this is contrary to the word on the streets. The Federal government of Nigeria is preparing  a package for some banks who are in a bind. Then again our man is a CEO, frequent readers of this blog  know little weight is accorded to CEO’s press releases. In tune with the whispers on the streets however the Tribune writes; Investigations conducted by the Nigerian Tribune showed that the nation’s banking industry is currently facing operational challenges, liquidity crisis and, in fact, all the challenges associated with the meltdown. Currently, some of the banks are finding it difficult to meet the expectations of their customers. Customers in the banks’ branches, especially in the rural areas, in most cases, are finding it difficult to make withdrawals as they have to wait for other customers to make deposits, owing to the banks’ poor liquidity positions. Even the National Council For Financial and Economic Development warns of a serious threat to the Nigerian economy, reminding us that Nigerian equity market has lost N8trillion to this crisis. 
Though WEMA’s CEO claims everything is under control just like every other CEO out there calming frayed nerves. Some banks are forced to pay out remittances to Nigeria in the local currencies as opposed to the senders currency. A check on the operations of some of the banks, during the week, revealed that some customers, who received money from abroad, were practically compelled to claim same in Naira.

Stage 1 Denial: This is eerily similar to the state of denial undergone by many US banks even as the house of cards were crumbling. If the American experience is anything to learn from, openness and swallowing the bitter pillromptly could save Nigeria from a drawn out state of uncertainty. I long to be proven wrong.

Africa did not make any of these bad loans how come she has to pay for the mistake of the west?  I get this questions often.Here is a quick list. Next time I get one of these questions I’d send them this entry. 
1. A slump in external demand affects exports and remittances.
2. A slump in external demand lowers commodity prices. Oil producing nations such as Nigeria are particularly vulnerable.
3. Lack of credit is stifling capital inflows and trade finance in the more advanced markets – such as Nigeria, Botswana, Ghana, Kenya, Mozambique, Tanzania, Uganda, and Zambia.
4 The region is not immune to financial problems of its own. Credit has ballooned in many countries. Banks’ loan books are often concentrated in commodity-related industries.
5. Some retail investors borrowed heavily to punt on local stock markets.
6. Some US and European banks withdrew funds from local subsidiaries. A big bank that rhymes with ‘pity’ is particularly guilty of this.

Feel free to add yours to the list. FT was sampled on this one.

I have been reading. 
On a more cheerful note, Sisters’ African good news trip – BBC hattip NaijaBlog.
Leveraging Internet with Radio -Build Africa and Rural Community Radio in Africa – White African 
Role of Micro finance in Empowering Women in Africa – African Executive
On Obama’s H1-B policy, Idiocracy - Lexington’s notebook (The Economist Blog)
Winners of the 2008 CGAP Micro-Fiance Photography Contest - Slideshow
Finally from the Cato Institute, China in Africa, I enjoyed the edgy discourse emanating from the Cato Institute in the past but this article is borderline delusional.