Compared below by Dmitry Butrin, head of the economic policy department.
Parallels between economic processes in Russia and Nigeria as two major oil producers have become somewhat common in the media prompting one to make a search for them and to try to understand whether they really exist. Surely, there are differences between the two countries, but there are similarities as well.
Last Thursday, on August 13, Russian Prime Minister Vladimir Putin allowed Andrei Kostin, VTB president, to go on holiday. It will be recalled that at a meeting in late June at which a discussion was held on the need for the banking sector to boost lending, Vladimir Putin announced a ban on summer vacations for state banks. Andrei Kostin fulfilled the task set before him, and thus received the right to take a vacation. Earlier, German Gref, Sberbank President, went on holiday. Since the start of the crisis, the world's big financiers have been giving more attention to "personalised stimuli" for top bank managers, and therefore one of the key issues in the European Union and the United States was restrictions on bonuses paid to senior staff of financial institutions enjoying state support. A non-economic stimulus like a ban on holidays is the Russian government's invention.
The day before, on Wednesday, Lamido Sanusi, head of the Central Bank of Nigeria, chaired a meeting after which he announced the decision to replace the top managers of the country's five major banks, i.e., FinBank, Oceanic Bank, Afribank, Intercontinental and Union Bank. He also ordered a mandatory additional capitalisation of $2.55 billion for them and a detailed audit of another 11 Nigerian banks (of which there are 24) by September 1. Lamido Sanusi, who took the post of governor at Nigeria's Central Bank in June in a planned rotation, revealed that bad loans in the five banks exceeded $7.4 billion.
Theoretically, Nigeria's situation is closer to that of the West's. Thus, corporate management mechanisms are used in Nigeria for dismissals (some of which have been only announced). However, in practice, Russia is more like Nigeria in some ways. A bankers' dismissal due to problem loan portfolios is common in EU countries and in the United States, but not in Russia (in Nigeria, banks issued loans mostly to oil companies at the peak of oil prices). The governments in both Russia and Nigeria do not have many strictly market mechanisms at their disposal which forces them to take measures toward management personnel. When Mr Sanusi was appointed governor of the Nigerian Central Bank in June, the local media pointed out that he was a grandson of an influential emir in the north of the country. Prior to his new appointment, Mr Sanusi was CEO of First Bank, the largest lender in the Nigerian oil sector. First Bank could well be compared to Russia's VTB in loan growth rates this summer, apart from one thing: the bank's audit, which was completed by the Nigerian Central Bank in August, found no bad loans in it.
By Dmitry Butrin