n Praise of Mr Charles C. Soludo PhD 

Dr. Charles Soludo is the director of the Nigerian Central Bank. He is one man who exemplifies the great positive side of the frequently obscure news stories from Nigeria, as they are sadly generally presented to the world by a commanding section of the International Press. The Director of the Nigerian Central Bank is a living proof that, Nigeria is reaping the fruits of Democracy. He is perhaps, the one who has proven better than others before him that, things can work and change in Nigeria, if there is the good will. 

When he announced the reforms of the mammoth Nigerian banking sector in July 2004, which was made up at that time of 89 mushroom banks, many took him for a dangerous pretender. Those who sensed that, he meant business and never liked the idea; began throwing monkey wrenches in the works or on the planned reforms.  Sadly with the help of some politicians and even some section of the very independent Nigerian press. Soludo’s banking reforms was presented as a scheme that will pre-empt the sector into a social and banking Armageddon.  

Unruffled by his critics, Mr Soludo went on with his programmed reforms full throttle and even set a dateline for banks who wanted to live in the new banking environment that, he has envisioned for his country. The judgment day was December 31^st 2006 and all banks that had not put up their acts together or build a capital base of N25 billion or $ 190 million would have to merge with stronger banks or disappear everlastingly from the banking world of Nigeria.  

Mr Soludo’s rally crying before and during the difficult period of his reforms was that: he wanted to sanitise the banking sector and also create the enabling environment, for Nigerian banks to cease being perpetual local champions. He wanted Nigerian banks to compete locally, regionally and internationally, for he had and still have the conviction that, if properly built financially, Nigerian banks have the manpower and the resources to compete at any stage in the world. 

It is not as though Nigerian banks prior to the reforms were not active. The problems with Nigerian banks then and its local operations were that, they were too selective in their offers of services to the public. Convincingly now, it could be said clearly that, former Nigerian banks, took very little risk locally and their contribution in the growth of the local economy was almost none existent. But now with the reforms completed and the number of banks reduced from 89 to 25, the survivors are expected to take and play their rightful roles in the economic growth of the country as their alter egos in some Asian countries are doing. 

What is more appealing with the reforms launched under the tutelage of Mr Soludo is that, it has being recognised internationally. A proof is that, foreign banks that used to shrug or turn up their nose in scorn, whenever Nigerian banks were mentioned are now racing to become partners or want to have a slice of the Nigerian cake. Furthermore, the reforms have made Nigerian banks to seal the Nigerian economic leadership in the sub region in all aspects.  

For there is no other West African or Central African state whose banking sector can hold a candle to that of Nigeria. In this year’s special finance edition of Jeune Afrique, a French language pan African weekly magazine published in Paris, France, Nigerian banks have made their appearance felt in the chart drawn up annually by the most authoritative and perhaps the oldest French language magazine focusing on Africa.

From a paltry 4 banks represented in the magazine’s top 200 African banks, when the special finance edition began 7 years ago, this edition have 14 Nigerian Banks that have established themselves amongst the top 200 African banks. Precisely, they are amongst the top 10 African banks. The presence of Nigerian banks in the French language magazine with an international scope is an opportunity for the selected few to use, to extend their tentacles regionally, principally in the French, Portuguese and Spanish-speaking countries of West and Central Africa. Nigerian banks could also use the opportunity to establish themselves in France, where there is a large African population, even though largely made up of French-speaking North and West Africans.  

Already, Ecotransnational bank and Zenith bank have decided to go regional and the former is even listed simultaneously in the Abidjan, Accra and Lagos stock exchanges. While Nigerian banks must go regional, they must also focus on new markets such as those of Oil rich Chad, Equatorial Guinea and soon to be Oil rich, Sao Tome & Principe, which are now patronised by French banks. The latter mentioned countries are also being actively patronised by Cameroonian and Gabonese banks that interestingly have smaller capital bases compared to the new versions of Nigerian Banks. 

While Mr Soludo deserves to be praised, it has to be pointed out clearly that, without the political will of the government of President Obasanjo, the grand plans and ambitions of the head of the Central Bank of Nigeria won’t have been possible. Hence, the necessity to have a government that has policies that are business friendly, but Nigeria under President Obasanjo has tried. However, her policies are not business friendly enough to a point that the dividends of her economic policies could trickle down to ordinary Nigerians.  

That explains why, even though some may frown at the seemingly liberal economic policies of the present government in power in Abuja, Nigeria’s business friendly index in or economic freedom index of 2006 in the world has not improved. She is still ranked 146 only better than an economic failure such as Haiti, ranked 147 or the disgraceful Zimbabwe ranked154 or the sealed off and economic suicidal North Korea ranked 157 (1). 

This simply means that, the Nigerian government must do better, by opening up more her economy but transparently too. The privatisation of state owned companies must be unblemished, for it is only through an open excellent economic climate that, Nigeria can successfully fight poverty.  The benefits of democracy should not be an affair of a happy few. 

In spite the success registered with the banking reforms, Mr Soludo is not impressed and like Oliver Twist, he says Nigeria now needs a mega bank. His is right, for all the combined assets of Nigerian reformed banks can’t compete with any of the big four south African banks that top 200 African banks present on list of Jeune Afrique.  

Furthermore, South African banks have more than 60% assets of all African banks. While waiting for Mr Soludo’s second project for the Nigerian banking sector to materialise, he will go down in history as the man who oversaw the removal of the Nigerian banks from Egypt to the promise land of Israel in tern of increased capital base and financial recognition. 

Today, Nigerian banks occupy 50% of blue chip listings on the Nigerian stock exchange and hold 60% of the sub region’s banking assets. To Nigerian bankers, stop thinking locally, think regional and continental and tomorrow, you will go global. If we can’t congratulate and appreciate one of ours, who succeeds like Soludo has done, who else do we expect will?  
 

Hence this piece is written in praise of Dr Charles Chuwkuma Soludo. One unsung success about the reforms is that, it has orchestrated horizontal reforms in the insurance sector in Nigeria and has also made other countries in the region to start thinking about reforming their own financial sector. Isn’t that refreshingly good to read and hear that, Nigeria is a positive pacesetter in the region? It certainly is. 

Note:

- 1 Read: the Wall Street Journal Europe of Wednesday January 4^th 2006 for 2006 economic freedom index

Robot  # 1 | 07.11.2006 23:36

The Director of the Nigerian Central Bank is a living proof that, Nigeria is reaping the fruits ...Read the full article.