In the wake of the immediate past administration of President Muhammadu Buhari, ominous forces seemed to reign unchecked. Evidence of their nefarious deeds, later dubbed the ‘cabal,’ surfaced with chilling clarity. Regrettably, even the Central Bank of Nigeria (CBN) leadership was implicated as a member of this clandestine group. This became glaringly apparent during the lead-up to the 2023 general elections, marked by the introduction of a currency redesign initiative.

However, with the advent of new leadership at the CBN, revelations began to emerge, shedding light on the extent of abuse of power by the apex bank’s former leadership. Among these revelations was the manipulation of the new Nigeria Deposit Insurance Corporation (NDIC) Act 2023, evidently driven by undisclosed motives. Dr Abdulhakeem Abdullateef, the former Lagos State Commissioner for Home Affairs, emerged as a prominent voice sounding the alarm on the fraudulent alterations within the NDIC Act, 2023, directly implicating the leadership of the Central Bank of Nigeria (CBN). In a viral video circulating on X, Abdullateef, then newly appointed as board chairman of NDIC, passionately appealed to President Bola Tinubu, urging a thorough investigation into the new legislation that was hastily passed by the previous administration.

Evidently, the NDIC stood as the prime target for the former CBN leadership under Godwin Emefiele, seeking to gain control over the funds. This motive drove their attempts to manipulate the Act’s provisions. It was clear that the revised Act fell short of the standards set by the International Association of Deposit Insurers (IADI) concerning NDIC independence and the establishment of corporate governance principles. The altered Act not only diminishes the President’s authority in appointing board members of the corporation but also grants significant nomination power to the CBN. Under the revised provisions, the CBN now holds the right to nominate four out of the seven directors, leaving just one director as independent—a stark contrast to the previous composition where seven out of twelve directors held independent status.

Established as an independent agency of the Nigerian government, the NDIC holds a critical role in safeguarding depositors’ interests, promoting monetary stability and fostering competition and innovation within the banking sector through robust supervision. Its mandate extends to insuring depositors’ interests in the event of impending or actual financial crises within banks, ensuring the settlement of insured funds when financial institutions face challenges in repaying deposits, and shielding the banking system from instability arising from runs and loss of depositor confidence. Additionally, the NDIC provides counsel to the CBN in the liquidation of distressed banks and effectively manages the assets of such banks until their complete liquidation.

However, stakeholders unanimously express concern that the insertion of 35 sections into the law by what they term “corruption engineers in Nigeria,” sanctioned by the Buhari administration, poses a significant impediment to the NDIC’s ability to impartially execute its responsibilities. The process of amending the NDIC Act 2006 was initiated following a peer review assessment conducted by the International Association of Deposit Insurers (IADI) in 2011. During their visit to Nigeria, the IADI assessed the country’s deposit insurance system and evaluated its adherence to international best practices. The review highlighted the necessity for enhanced operational independence for the NDIC as a safety-net agency. However, rather than focusing on fulfilling the recommendations outlined in the 2011 IADI assessment, the version of the NDIC Act presented to the National Assembly was allegedly drafted by the leadership of the CBN, headed then by Emefiele, in collaboration with Bello Hassan, who served as the Managing Director/CEO of NDIC until December 2020.

Interestingly, Hassan had previously held the position of CBN Director of Banking Supervision. Moreover, to achieve their aim, a senior legal staff member from the CBN was drafted into the NDIC legal department and subsequently elevated to a substantive position, disrupting the existing departmental structure. This restructuring had adverse implications for dedicated NDIC workers who had faithfully served the organisation.

With the fraudulent law assented to by Buhari in his last hours in office, the apex bank arrogated powers to itself, including the authority to license, supervise, grant forbearances to banks, withdraw their licenses, impose sanctions and order their liquidation. Suspicion arose that the entire process was completed while the NDIC board was absent, facilitating the enactment of the anti-people law. The tenure of the 2019 board ended on December 8, 2022, yet the first closed-door ‘public hearing’ was held on December 7, 2022, preceding the board’s expiration. Subsequently, the process was veiled in secrecy, with oversight committees of the National Assembly and the MD clandestinely refining the document to align with their motives.

In his well-publicised address to Nigerians and President Tinubu in 2023, Abdullateef asserted, “NDIC stinks. There is a lot of rot going on. They say, ‘when you fight corruption, corruption fights you.’ Now the document you see (referring to the NDIC Act, 2023) is one of the ways the corruption engineers in Nigeria are fighting back. Each time you say you want to have a true change like the one brought about by President Bola Ahmed Tinubu, you will have the change champions, who will support him, but you will also have the change skeptics and the game changers, who will frustrate all his efforts to rid Nigeria of this mess. 

“Now, this is the purported new act of the NDIC, and I tell you for nothing, this is Emefiele’s Act. I tell you because here, they have taken away the powers of the President in respect of the NDIC. The cabal has taken over the NDIC. This Act was taken to former President Buhari 48 hours to his leaving office. They knew at that time that the man was so busy and would not be able to read everything they have put here, therefore, they got him to sign it,” he said.

Abdullateef highlighted yet another instance of fraud in the passage of the Act, noting that the signed document significantly deviated from the vote and proceedings of the National Assembly that approved it. Expressing his frustration, he emphasised that those responsible for these actions deliberately orchestrated them to hinder the NDIC from fulfilling its functions as effectively as it should. According to him, “No sooner that we were appointed by the president, waiting for confirmation, than they quickly introduced a new bill – a law that will truncate everything that we wanted to do. I participated in the National Assembly because as a lawmaker. I’m a lawyer of over 30 years’ experience at the bar, so I know that whatever is passed by the National Assembly and assented to by the President will be what my board will implement. So, I was interested in every detail of what they were passing. My God! What has happened now is completely different from what was passed.  

“While the National Assembly passed an act that would have the representatives of the six geopolitical zones in Nigeria to superintend over the affairs of the NDIC so that it is able to discharge its duties, it also gave the President the free hand to appoint competent Nigerians who are capable of becoming Managing Directors and Executive Directors. Those that doctored the document decided to tie the hands of the President by saying that only someone recommended by Emefiele alone can be the Managing Director or the Executive Director. This is in contrast with the previous Act where the President has the freedom to appoint any competent Nigerian to superintend over the affairs of NDIC.

“They have removed the representatives of the six geopolitical zones. They have now fraudulently made the Permanent Secretary, who does not have time, to be the chairman of the board. How can a Permanent Secretary be a judge in his own cause? That is the Ministry supervising the affairs of NDIC! How can the head of that Ministry still be the head of NDIC? Do you know why? I visited the Permanent Secretary, and he told me, ‘I told them several times, do not make the mistake of making me the chairman of the board! I have a thousand and one things to do as a Permanent Secretary Ministry of Finance!’ They know I will not have time so that they can do all the mess they want to do,” Abdullateef stated. 

Abdullateef also lamented further that the doctored law killed the career progression of the 1,600 workers in the NDIC, asking, “How can you say that somebody who is working as a teacher should not have the hope that one day, he or she will become the principal? So, what they have done here is that no worker – no director in NDIC, can ever progress to become executive director, or become the managing director, because they said even if you work all your years in NDIC, only the CBN can appoint and recommend who should be the executive director or managing director.

“The one that is affecting the depositors is that NDIC will no longer be able to make depositors smile. I have thousands of petitions on my table by Nigerians, who are owed by the NDIC, who find it difficult to claim their rights from the NDIC. They are frustrated because the NDIC Act has so many useless sections, some that say, ‘if you don’t come and claim your money within a time, the NDIC will become the owner of the money.’ How can you say that a microfinance that has closed should get the depositors to come and get their money?

“You say you are using town criers. Town criers in today’s modern Nigeria, when they have phone numbers? So, you’re denying Nigerians trillions of money.  This law has removed the independence of the NDIC. The former law said that NDIC shall be free to go and investigate the banks. Now this law says NDIC can only go and investigate banks if CBN approves. Before, once NDIC realises you are supposed to collect your money, NDIC should be able to pay you free! Now, there is a section which says when the bank suspends payment to you and NDIC is supposed to pay you, NDIC should go and get the approval of CBN before they can pay you. This is corruption! You do not need the approval of the CBN if you say NDIC is an independent agency!

“I want the President not to act on this law until it is probed. Probe the passage of this law, probe the inclusion of Section 7, which takes away the right of Ministry of Finance, which takes away the representative of the Ministry of Finance and replaces it with two directors from CBN, probe why what is passed is fundamentally different from what is assented to, probe what happened between the time the National Assembly passed it and there was no divergence. Under the law, do you know the status of this Act? It is null and void! Any time Mr. President assents to a bill that is materially different from what was passed by the Senate and the House of Representatives, it means there was a material omission, and that law was not matured for assent.” 

He, therefore, advocated for the law to be returned to the National Assembly for further debate and scrutiny. As President Tinubu continues to wage war against corruption, this objectionable law must be repealed. Not only does it undermine the independence and effectiveness of the corporation, but its provisions also violate international best practices and contradict the core principles of the International Association of Deposit Insurers (IADI), of which the NDIC is a signatory and a key member.