How times change. It all seems like a different era when Soludo was being praised to the high heavens for his concerted programme aimed at stabilising the financial sector. He was garnering awards and being feted by Institutions all over the word as the world’s master banker. Everyone now indulges in the favourite pastime of vilifying him for the hiccups in the economy. That policy for which he was praised to high heavens - the consolidation of the banks, now supposedly is the source of our current economic woes.

Are you surprised at this Soludo-bashing; as charlatans, ethnic jingoists and pseudo-intellectuals are angling, positioning and showcasing themselves as more-than-worthy successors?

Soludo’s present travails reminds me very much of the present Prime Minister of the United Kingdom, Mr Gordon Brown. In 1997, one of the first actions undertaken by the new Labour and Brown was to set Bank of England free, giving the Bank of England independence from political control and creating the Financial Services Authority (FSA) as part of the moves that saw the Bank of England stripped of responsibility for overseeing the banks.

This was hailed as a masterstroke. The decision to give the Bank of England its independence was seen as a decisive move, the swiftness of which took many by surprise coming only four days after Labour's landslide election win. It was described as the most radical shake-up in the bank's 300-year history.

A "tripartite" system was introduced, involving the Bank of England, the Treasury and the FSA, each of which had some role in regulating and overseeing the industry. Mr Brown quickly developed a reputation as an iron chancellor and "prudence" became his watchword. He went on to become UK longest-serving modern day chancellor.

But today, Gordon Brown is facing an unprecedented barrage of criticism over his role in the UK's financial crisis amid claims he was responsible for massive gaps in the regulatory system and that he failed to maintain stability in the country's finances.

His poll ratings have slumped. At the heart of the criticism is that same decision taken by Mr Brown, as chancellor, for which he was hailed just a decade ago. Political opponents now claim Mr Brown's creation of the tripartite system has been fundamental to the present economic crisis.

Now, he is being derided as "Culpability Brown" and berated by the Tories for "destroying" the previous regulatory system in 1997. The Prime Minister also had to endure detailed and damning critiques from financial experts and regulators.

The Shadow business secretary Kenneth Clarke says the system had been a "complete failure". Some have even called for Mr Brown's resignation.

Professor Soludo came to national prominence in Nigeria in 2003 when, as former President Olusegun Obasanjo’s economic adviser, he helped formulate the country’s macroeconomic stabilisation programme and pushed for a total comprehensive reform and consolidation of the country’s then inefficient banking system.

Soludo resuscitated, re-branded, re-capitalised and re-positioned the banks to attract billions of foreign equity capital at a time when the country’s financial system was being derided in almost all international banking circles for fraud, money laundering and other internet scams.

Nigerian banks are today among the strongest and largest in sub-Saharan Africa and a half dozen of them are now exploring opportunities across West, East and Central because of Soludo.

The Obasanjo reforms which Soludo and his fellow reformers supervised triggered new inflows of FDI and new equity capital for listed companies. A restructuring of $34 billion in national debt and high inflows from oil exports which coincided with the banking sector reforms, helped underpin a four-year bull market for the Nigerian economy.

But today, the metamorphosis of the banks into mega banks is being derided as the "creation of monsters"; “they grew bigger appetites and began to eye bigger markets abroad and looked on the Nigerian market with something akin to scorn”, claims critics. How ironic!

When I wrote ‘The Case against Ndi Onyiuke Okereke’, I intended to follow that up with, ‘The Case against Professor Soludo’. One of the responses I got then which were quite legitimate was that I took Onyiuke Okereke to task as if she alone is culpable for the massive economic crime committed against Nigerian investors. One fellow wrote that Soludo was far guiltier as a “spineless regulator”.

But I got very reluctant to publish that article when I saw the fierce campaign by an array of critics determined to stop Soludo from being reappointed the Central Bank governor past his sell-by date of May this year; vested interests that includes several chief executives of the banks he supervises, former lieutenants, and prominent lawmakers. Many of those criticisms obviously were NOT being made in good faith.

I therefore decided to stay in the sidelines; to observe and learn. The pre-eminent Lord Denning’s laconic observation in this respect is most instructive. He said ‘a fair judge ... assumes a detached stance and rarely descends into the arena of combat, lest the dust of combat cloud his or her vision’.

One of the earliest blasts came from Saharareporters “Soludo is living large”; a story they reproduced from Next. In the said article it was claimed: “Mr. Soludo is facing growing criticism around his personal conduct while in office, the tactical and strategic decisions he has made since the beginning of the economic crisis as well as a damning official finding that investigated his highly questionable establishment and chairmanship of the African Finance Corporation”.

Before writing this article, I went back to that article to search carefully for the purported “atrocities” committed by Soludo and for which it was claimed: “Mr. Soludo’s flaws were quick in coming”.

In the said article Soludo was accused among other things of: ‘Fighting for a second term’, ‘Plucked from obscurity’, ‘Blind eye to dodgy loans’, ‘playing games with forex transactions’, and ‘Living it large’ with annual salary of about N12 million naira a year!

What quickly emerged was that the only charge of substance was; “The ambitious African Finance Corporation, which he founded in 2007, and over which he installed himself as chairman”. The report claimed this project “was the subject of a criminal investigation that found him guilty of gross negligence and poor executive judgment”.

I juxtaposed this claim with a Guardian article of March 29, 2009 which wrote; “A committee set up to investigate the finance invested in the African Finance project by CBN later exonerated Soludo, when it found out that no money was actually missing after all…That was after their attempt to have him kicked out over the Naira redenomination failed to have the backing of President Umaru Musa Yar'Adua”. 

Where then are Soludo’s evil deeds? Who is sponsoring these claims about AFC? Lies can certainly be influential. Unfortunately, this lie was given prominence in several influential Nigeria media.

Of all the Soludo criticism I have read, none sounds as ridiculous as, "Soludo: Decision time for Yar’adua", by one Garba Deen Muhammad on NVS which again was broadcasted in a lot of online news media.

Throughout the article the author struggled to find the appropriate adjectives with which to condemn Soludo. At the end he landed on one story he said was published by one Pius Obasi, who “correctly summed up the story of Northern Nigeria... as the poorest and most backward part of Nigeria and it is getting poorer and more backward”.

He cited one statistics by The NAPEP figures that showed that Northern Nigeria has the biggest incidence of poverty among the six geo-political zones in the country (about 75)  while the South-East, “from where Soludo (lucky him) comes from, turned out to be the wealthiest part Nigeria with a poverty rate of 23 percent”.

Garba then blamed Soludo for this sad state of poverty and the fact that the “North also has the highest concentration of beggars, it has the lowest literacy rate in and the lowest per capita, or income per head in the country”!

Perhaps, Garba would also blame Soludo for the polio, blindness and leprosy that afflict the Northerners instead of blaming the Northern leaders, the backward northerners themselves and a religion that have conspired with the socio-political system in the North to consign the northerners to poverty.

Another charge against Soludo in that Saharareporters Article was that he is rumoured to have a political ambition; that “Mr. Soludo recently transformed a sleepy settlement into a festive occasion when he brought the elite of the Nigerian financial and bureaucratic tribe to come help him launch the Mgbafor-Soludo Diagnostic Centre”.

On this issue, in as much I agree that as a free citizen Soludo has the right to aspire to any political office of his choice but I consider his dabbling into politics an ill-advised move.

I had cause to criticise his immersing himself in the politics of Anambra state in the last election. He sponsored a PDP candidate for the Aguata Constituency in the House of Representatives. Andy Ubah was so pissed off he sponsored a rival candidate from the Labour party, Hon Umeoji Chukwuma who won the election.

At a time that the capital market is in virtual collapse; the external reserves are being depleted; the naira has crashed; the spectre of inflation and spiralling unemployment are palpable; the fear of bank failures rises and Soludo’s legacy is being rubbished, getting involved in politics is distracting to say the least.

Must every Nigerian be a governor, a senator or a president? Getting involved in politics when you are the high priest of government finance has the tendency to be corruptive.

In giving reasons why they believe Soludo would not be re-appointed for a second term, Euroasia in the advisory written by Sebastian Spio-Garbrah, analyst for Middle East and Africa catalogued a number of the apex bank’s policy somersaults and flip-flops which together with other issues have helped to dent the governor’s re-election chances.

But the fact which several commentators overlook is that the solid support which Soludo enjoyed under the former president, Obasanjo is  now lacking under Yar’Adua. This has crippled his handling of the present economic crisis. Soludo, no longer sure-footed, now constantly looks over his shoulders.

As correctly noted by the advisory, since Yar’Adua took office in 2007; Soludo’s influence has been on the wane. In late 2007, a series of ambitious announcements to launch new monetary policy measures such as specific inflation targeting and full convertibility of the current account were quickly shot down by the president and his advisers who weren’t consulted before the plan was released. 

Another Soludo scheme to distribute oil revenues to the states in US dollars to prevent a growth in monetary aggregates was also mothballed. 

Unfortunately, Soludo seems to have succumbed to political arm-twisting from 'above', else he wouldn’t be combining populist economics with practical finance.

To illustrate Soludo’s new rumba dance. In December, the Central Bank of Nigeria suspended forex trading on a number of days, and then sought to reduce the net open forex positions of local banks by limiting how much leverage they could take.

In January it abandoned a Wholesale Dutch Auction System (WDAS) for a more cumbersome Retail Dutch Auction System (RDAS).

Later, it said that it was going to defend the value of the Naira within (+/-3) band, but soon contradicted itself by warning that Nigeria would not waste its reserves defending the local currency within that band.

Soludo then suspended inter-bank forex trading and even seemed to specify what colour of advertisements banks could place in national newspapers. 

Yar’Adua should make it unequivocally clear that Professor Soludo have his full backing. It is opportunistic with hindsight, to go all out against the economic plans that earned Soludo kudos under former president Obasanjo.

We just have to note that there weren't many people, even in the developed economies that got it right at the beginning of the present economic crisis. In Nigeria it is made worse because the systemic failure goes to the heart of the system – to the internal supervisory system and right to the top of the spineless Yar’Adua government.

I would have said that Soludo lack guts. After his well-articulated redenomination plan for the Naira was shot down by government officials and ‘politicians too dense in their thinking to see beyond their noses’, he should have resigned. But unfortunately, appointees don’t resign in Nigeria until they are kicked out.

Today, a dangerous twist has been added to the equation - Tribalism and ethnic tensions between southern bank executives and their shareholders and the relatively poorer northern Muslim elites. Northern elites brood openly that Soludo’s banking consolidation concentrated too much power in the hands of southern elites and left the Muslim north with no bank of its own.

It is sad that the Contention for the head of the country's monetary system is being debased, with some people and a section of the country bent on hijacking the position, irrespective of the achievements of Soludo, the strategic interest of Nigeria and the fact that the Yar'Adua government is yet to find its feet in terms of monetary policies.

It is amusing watching the high-wire intrigues swirling around Prof. Soludo and would only caution Nigerians that, just as in the case of political leadership, we deserve whichever charlatan that steps into Soludo's shoes if we are not careful; if the decision is made under some extraneous considerations.

In this contest, the onlookers are pitiful Nigerians who seem clueless about the game being played. In this contest, the outcome looks quite gloomy.

afamefuna@elombah.com

www.elombah.com

Robot  # 1 | 14.04.2009 07:50

How times change. It all seems like a different era when Soludo was being praised to the high heavens for his concerted programme aimed at stabilising the financial sector. He was garnering awards and being feted by Institutions all over the word as the world’s master banker.Everyone now indulges in the favourite pastime of vilifying him for the hiccups in the economy. That policy for which he was praised to high heavens - the consolidation of the banks, now supposedly is the source of our current economic woes. Are you surprised at this Soludo-bashing; as charlatans, ethnic jingoists and pseudo-intellectuals are angling, positioning and showcasing themselves as more-than-worthy successors? Soludo’s present travails reminds me very much of the present Prime Minister of theUnited Kingdom, Mr Gordon Brown. In1997, one of the first actions undertaken by the new Labour and Brown was to set Bank of England free, givingth...Read the full article.

Jangirofa  # 2 | 15.04.2009 21:48

Professor Soludo is incompetent! Reasons why? 1. The chief executive officers of Nigerian megabanks are not equally distributed to the six geopolitical zones (in terms of their origin) - Not even North/south! 2. The merging of the banks has taken honest daily living from a number of people - the okada riding bureau de change. Those forex dealing defendant banks created numerous jobs. Soludo increased the unemployment rate! 3. Soludo too speak grammar! 4. By getting awards from all these international rating agencies, he has compromised our country's sovereignty. To replace him, the following should be done; a. Appoint any other person from preferred geopolitical zone. The person must be willing to demerge the banks, reduce the required capital base requirement and allow open street bureau de changi! b. Appoint at least one foreign technical adviser. The Ghanaian man who supervised the re-denomination of Cedis will be most appropriate. Pay him twenty times what Soludo is being paid. See what wonders will soon be performed! Who make Soludo Professor self? Which em?% approved it?

valteena  # 3 | 16.04.2009 00:39

How would they know unless they get into the position and give it a go. One thing is sure though everything can always be improved upon. There is always a better way. And Nigeria abounds with capable people to do better if allowed. Just literally answering the question posed in the title that's all

Iroabuchi Onwuka  # 4 | 16.04.2009 02:01

but if he 'plates' his tent on too academic a platform without watching what the stockmarket is telling him, then he stands to get himself trapped. This will make life harder not better for Nigerian investors and banks.

Iroabuchi Onwuka  # 5 | 16.04.2009 02:03

=valteena;346854>How wold they know unless they get into the position and give it a go. One thing is sure though everything can always be improved upon. There is always a better way. but when 'improved upon' it becomes adulterated, abridged. Unless you mean updated, then you are pitching for Soludo

valteena  # 6 | 16.04.2009 02:17

=Iroabuchi Onwuka;346871>but when 'improved upon' it becomes adulterated, abridged. Unless you mean updated, then you are pitching for Soludo No sir I disagree.To improve mean to make better than it was before, to build on whereas to adulterate means to waterdown or spoil something good. They mean two different things. In that sense, Soludo may have done a good job which is debateable as it obviously is even in NVS here but his good job can still be made better or improved on by someone else.

ozoodoo  # 7 | 16.04.2009 12:12

You Shall Know The Truth And The Truth Shall Set You Free. The content of the following report was never denied. Of course, the allegations in the report was never investigated by the authorities. Why Charles Soludo lost the VP Slot Written by Jonathan Elendu Monday, 15 January 2007 http://elendureports.com/index.php?option=com_content&task=view&id=336&Itemid=33 Charles Soludo, the Governor of Central Bank of Nigeria is not a happy man. Unknown to many Nigerians, Soludo is one of the biggest losers in the December primaries of the Peoples Democratic Party (PDP). According to multiple sources at the Presidency, the Central Bank Governor had been promised the Vice Presidential slot for the 2007 elections by Pres. Olusegun Obasanjo. The lame-duck President, according to our sources, had told his trusted aide, AndyUba, that he wanted an Igbo man to be the next Vice President of Nigeria. Uba is said to have suggested Soludo, whom he believed would continue the President’s reform policies. The President, thereafter, invited Charles Soludo and told him to prepare as he was going to be the running mate to whoever emerged as the PDP presidential candidate. Everything seemed to be working in Soludo’s favor. In appreciation to Andy Uba, who is running for governor of Anambra State on the platform of PDP, Charles Soludo gave eighty million naira (N80,000,000) to delegates who voted in the Anambra PDP primaries. This ensured that Andy, who had already been promised the governorship of Anambra State, cleared the final hurdles in his way. Reports, including some prepared by security agencies, started filtering to Pres. Olusegun Obasanjo that Charles Soludo had started acting like an emperor. He is said to have spent millions of naira to make clothes of the different tribes in Nigeria. He also engaged the services of a make-up artist to take care of him before leaving the house. According to the reports, Soludo also started throwing his weight around. According to one source, “Soludo started acting like the Vice President of Nigeria from Central Bank quarters.” As a matter of fact, the Governor of the Central Bank of Nigeria goes to work in a larger convoy than the Vice President of Nigeria, according to out investigations. In the CBN Governor’s convoy are at least three Sport Utility Vehicles (SUV’s) commonly referred to as Jeeps in Nigeria. There are also motorcycle outriders, a bullion van and other vehicles. During the last Christmas and New Year celebrations, some Anambra people complained that Soludo’s convoy was driving them off the roads of Anambra. A top government official told Elendureports.com recently, “Our people feared that Soludo had become another Chris Uba. The only difference is that the man spoke better English. It saddens a lot of us who claim to have gone to school that a man like Soludo would suddenly go crazy with power.” Pres. Olusegun Obasanjo, according to presidency sources, invited Charles Soludo and told him he would not be getting the Vice Presidential ticket of the PDP. The President is said to have promised to ensure that Soludo is retained as Central Bank Governor by the next President. Shortly after this meeting, the President summoned Andy Uba and asked him to run as a Vice Presidential candidate of the PDP. Andy, according to our source, is said to have protested and told the President that he was more interested in the governorship of Anambra State. The President dismissed him thus: “You go be boy-boy all your life? Anyway, Vice President na boy-boy position.” Meanwhile, Charles Soludo is said to have been complaining to everybody that Andy Uba denied him the opportunity to run for the office of Vice President. According to an eyewitness account, Soludo complained to a top northern politician that Andy got in his way of becoming the next Vice President. The northern politician told Soludo, “But it is Andy who told the President to offer you that position in the first place.” The pertinent question here is: How did Charles Soludo, a member of the President’s transformation team and a man not known to have a history of wealth, earn eighty million naira (N80,000,000) which he invested in Andy Uba’s gubernatorial race? When the law permit the Central Bank Governor to use sirens and outriders? Why has nobody, including the President, called Soludo to order

edoji  # 8 | 16.04.2009 14:28

=ozoodoo;347010>You Shall Know The Truth And The Truth Shall Set You Free. The content of the following report was never denied. Of course, the allegations in the report was never investigated by the authorities. Well, I don't know how credible ElenduReports could be: On Thursday, 01 May 2008, Elendureports had it that "Pres. Umar Musa Yar’Adua who recently came back to Nigeria from Germany has traveled out of the country again". He added, "We can authoritatively report that the President developed some “health issues” after the Federal Executive Council meeting at the Aso Rock Villa on Wednesday in Abuja. He was secretly flown out of Abuja to the United Kingdom. According to presidency sources, “the President developed some serious health issues and had to be flown to the UK on Wednesday because of it…nobody wants this in the press though.” Then on Sunday, 04 May 2008 they recanted that: "Pres. Umar Musa Yar’Adua whom we reported was flown out of the country on Wednesday is now in Abuja. The President is said to have developed some serious health issues and had to be flown to the United Kingdom. However, the presidency, according to some security and presidency sources, did everything possible to create the impression that the president was in the country". For full effect on the same day, they wrote: "For purposes of full disclosure, this reporter, wrongfully and regrettably, announced the passing of then candidate Yar’Adua. It turned out, happily for all Nigerians, to be false. We are yet to publicly comment on the events that led us to make that unfortunate declaration. Someday we will". We are still waiting for his explanation till date!

Anioma777  # 9 | 26.04.2009 13:06

Soludo gets a second nod By Nicholas Ibekwe - www.234next.com April 26, 2009 12:18AMT Disregarding the many critics of the Central Bank governor, President Umaru Yar’Adua may have given the nod to Chukwuma Soludo to continue as the governor, informed sources close to the government said last week. Just as NEXT reported in its March 15 edition, the boast of Mr. Soludo that his reappointment was in the bag came to pass not on the basis of any giant strides in our flattened economy, but on the basis of his closeness to the wife of the President, Turai Yar’Adua and her daughter, Zainab. Mr.Soludo’s re-appointment, two weeks to the end of his first five years, is on the heels of an indictment by a Federal Government Panel hanging on his head like a sword of Damocles over his roles in the Africa Finance Corporation (AFC) scandal. The panel, in its report said that the CBN Governor used the AFC for “Round-Tripping”, a scheme whereby bank executives and Bureau-de-Change operators speculate on their demand for foreign exchange to get a higher allocation, with a view to selling at a higher exchange rate. This is a criminal offence under the Money Laundering Act. It further recommended that “Government should take appropriate action against Prof. Chukwuma Soludo and Mr. Austine Omeruwa, (AFC managing director) who are instrumental to this action. The report of this panel, submitted to the Attorney General of the Federation, Michael Aondoakaa, nine months ago, has been swept under the carpet. Remarkably, Mr. Aondoakaa had in a letter to the panel, declared the AFC illegal. When asked the reason for the delay in the implementation of the panel’s recommendations last week, Olusegun Adeniyi, the president’s spokesman retorted, “What’s your problem with Soludo?” A pat on the back His boss is patting him on the back,” says Emmanuel Onwuka, a professor of Economics at Ambrose Alli University, Ekpoma, Edo State. “The Federal Government is not interested in the report. Someone that was alleged to have committed a crime, should he get a second term?” queries Mr. Onwuka. “It is very possible that the powers that be were aware of what he was doing because there was no way he could have done that without the authority of those who put him there.” Beyond this issue is also one that bothers on regulation, especially of the banks, the core duty of the Central Bank. A banker who does not want his name mentioned says the Central Bank, under Mr. Soludo performed below par. He recalled Mr. Soludo’s comments at the onset of his tenure that he was going to improve the monetary policy management function of the bank, which the banker claims he failed to do. Monetary policy management involves regulation of the liquidity in the system, interest rate regime, lending rate and management of a nation’s external reserves. “What were the inflation rate and the exchange rate to the dollar when Soludo took over and what are the rates now,” an economist asks in an interview. He believes this is necessary for a better assessment of Mr. Soludo’s time as CBN governor. While he concedes that the global economic crisis has impacted on Nigeria’s economy, he condemns the “way and manner our foreign reserve has been managed by Soludo.” The banker adds that the “ineffectiveness of the Central Bank under the watch of Soludo has given rise to clamour from some bankers that it will be best to relieve the Central Bank of the monetary policy management so that it can fully concentrate on its banking supervision function.” There are also plans by the National Assembly to review the CBN Act based on the belief that the bank is saddled with too many functions. Mr. Soludo was also hampered from doing a thorough regulatory job perhaps due to what has been described as his “incestuous relationship” with some banks chiefs, many who have worked assiduously for his new term for him. Signature achievement There is, however, a near-universal agreement on Mr. Soludo’s signature achievement in the past five years: the consolidation of Nigerian banks. Shortly after he became governor in July 2004, he announced that all banks should shore up their capital base to N25 billion which gave rise to the emergence of 25 banks. They later became 24 after the merger of two: Stanbic and IBTC Chartered. “The use of IT has increased in our banks,” says Muda Yusuf, the Director General, Lagos Chamber of Commerce. “We now have online banking unlike what we used to have in those days.” “It was an unqualified success,” says a banker in Lagos. But Mr. Onwuka, while acknowledging Soludo’s success in this regard, was sceptical of the banks’ real strength. “They can compete internally but I don’t know to what extent they can compete externally. If they are as strong as they are claiming, why are they still getting protection from the Central Bank?” Twilight of the first term. After the initial sparkles, the twilight of Mr. Soludo’s tenure is characterised by a dull and unappealing hue. His recent policy drive has been likened to the “futile struggle of a chicken with its head chopped off”. He announced that a cap had been placed on lending and deposit rate at 22 per cent and 15 per cent maximum, moving the interest determination from the market-based approach. Mr. Yusuf advised Mr. Soludo to “see how we can get a more stable financial system and also strengthen the regulatory capacity of CBN because there are still some problems of effectiveness in regulation,” as he gets another five year term. He said Mr. Soludo should also see how the interest rate could be reduced further to aid investment in the real sector while Mr. Onwuka implored him to initiate policies that will encourage banks to invest in human capital development and agriculture to reduce poverty.