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Keen watchers of Professor Charles Soludo’s reforms agenda are impressed with his accomplish...Read the full article.

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Keen watchers of Professor Charles Soludo’s reforms agenda are impressed with his accomplishments thus far, since assuming the helms, as governor of Central Bank of Nigeria.
I am personally impressed with his efforts at changing the way banks and other financial institutions in Nigeria do business; However, I am reserving my thunderous applause for Professor Soludo for a time when our national currency, the Naira recovers considerably and the exchange rate become or does better than what it was in 1980 or earlier.


Exchange rate is not synonymous with economic boom, try the Japanese Yen for better understanding


I have been planning an article, titled, “Kudos to Soludo” off and on, for quite sometime now, but I have been reluctant say hurrah or celebrate, dancing with my two legs over Professor Soludo admirable and arduous drive to change the culture of the banking sector or industry of the economy of Nigeria.
Critics of the current governor of Central Bank of Nigeria predicted that the sky would fall as a result of the bank recapitalizations and consolidations embarked upon and successfully undertaken by Professor Soludo.


Not even the day Judas hanged himself did the sky fall. It has never fallen even at the birth or death of anyone, however, the skies have fallen for the retrenched horde like UBA staff that were kicked out late last year, don’t dance on another’s grief


Thankfully, the skies have not fallen! These recapitalizations and consolidations have actually created a more viable banking industry in Nigeria. A sub-sector now worthy of respect, not only in Nigeria, but on the world stage as well.
I am in complete support of community banks or banking, that is directed at the individual of average means and persons in the small and medium entrepreneurial pursuits. That however cannot, and should not have been the basis for the loud anti recapitalization and consolidations drive by Professor Soludo.
So what should?

Prior to Professor Suludo’s reforms in the banking sector, it was the case that the banking industry in Nigeria was populated by individuals who used their personal fortunes and connections to establish or float banks, banks which were banks in names only! Banks which some individual founders used as if, it were their personal safe deposit box, banks which were never treated any regard or respect by the founders. These banks were banks that were unknown outside the town or city of its founders.
So how has this changed? The bar now eliminates me but makes it possible for Obasanjo, Atiku, IBB, Chase Manhattan, Standard Chartered, etc and you applaud, so much for economic liberalization.

These banks were for the most part, banks intended to facilitate the personal ego, and self aggrandizement of founders and their “business” these “banks” practiced no banking in the true essence of the word. These banks observed little or no banking practices and procedures or ethics that are usually the customs and traditions of bankers in Nigeria and elsewhere in the world.


Like what? What practices did ACB, National Bank, and other groups’ bank engage in that made them ‘survive’ that ‘smaller banks’ overlooked? Mind you that the one-man banks that survived – count them – STB cum UBA, Zenith, Access, GTB, Diamond, etc.


Expectedly, most of these banks wounded up in bankruptcies and monumental failures.


Do you mean BCCI?


These were banks, which acted, as if pointedly, to eschew best business practices!


The round-trippers survived! Count - FCMB, STB, GEB, DIAMOND, Zenith, etc


When these banks failed, Nigerian depositors bore the brunt the egregious practices which were pervasive within the banking industry at the time.
Anyone familiar with my commentaries on Nigerian issues would probably remember my views on our national currency the Naira, which I have argued in the past, as undervalued and devalued or have been allowed to be in free-falls for more than twenty years! This is in part, due to foreign exchange dealer-banks’ collusions and conniving profiteering. Hence there continued to be huge banking profits in the midst of zero production capacity in Nigeria as witnessed in the preceding twenty-years plus!
No one, not even me, would of course blame Professor Soludo for Naira’s free-falls! After all, he is new, relatively, at the helms of Nigeria’s apex bank and, banker to bankers. We are quite aware of the enormous challenges with which he contends
The point I want to make, the point that I feel strongly about, is the fact that it has become very urgent for something, anything and everything, to be done to enhance the appreciation of the Naira. And yes! I have heard all the Harvard Business School arguments about productive capacity, inflationary pressures risks and the almost trite concept of allowing supply and demand or market forces determine exchange rates between our Naira and other currencies. And I make bold to say, that I reject them, one, and all!


Those serving life terms do reject prison also, try a prison fellowship session


These theories by seasoned eggheads have not helped Nigeria in course of the preceding thirty years! Isn’t lunacy by any other name, same as doing the same thing over and over, in the same way, but, expecting different results or outcomes?
Have we not seen active government involvements in the supply and demand or market forces outside of shore of Nigeria? Have we not seen how often the governments of America and Europe are quick to subsidize their agricultural, steel, and national defense sectors of their economies? Why must eggheads who are policy wonks in Nigeria advocate and practice Harvard Business School THEORIES to the detriment of the average Nigerian? Why must we practice these theories in isolation to the realities of how the world works?

Certainly, Nigerian policy wonks must be familiar with the frequency with which other governments gets involved or actually interferes in the supply and demand processes or the inner workings of the so-called market forces. Nigerians policy formulators and implementers have to be aware of the regularity with which the World Trade Organization or WTO resort to officiating disputes between the advanced countries of America and Europe as they struggle for supremacy and their resort to trade wars.


Now we know, thanks!


Trade wars by war of agricultural and food production subsidies, subsidies of steel and steel production, subsidies for lumber, more social welfare subsidies in housing, transportation and various social safety nets which provide cushions for their citizens; And yet, we are to ape and copy the theories of free-market and subsidies removals that are not believed or let alone, practiced by its most strident proponents?
If it was up to me at this point, I will operate the Central Bank of Nigeria and the entire economy of Nigeria solely for the best interests of Nigerians and Nigeria. I will operate all public policies relating to our economy, as if nearly oblivious of the World Bank and the International Monetary Fund! Look at what has happened to Argentina and Brazil?


But Soludo is part of the team that paid out $billions to these organizations, what a couple you two will make!


Why must the developing world adopt and practice models and theories that are not even considered by the proponents of such theories in the home countries of these theorists?
Developing countries, and in particular, Nigeria in its current state of affairs, with abject poverty, extreme hardships and economic hopelessness, cannot afford these academic experiments while our people die waiting for the very basics and barest minimum of life.
The ultimate Soludo solution to me therefore, must be actions and pronouncements from him, which stems stops and ends the free-fall of our currency the Naira. Thirty years of free-free fall and near crash must now! A new and better day for the Naira begins now!

Was 20 years at the beginning, it's now 30 years, did it take you 10 years to pen this? You finally lost me in spite of my effort. How old is the Naira after all? After you na Greenspan!

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Obasanjo Launches Re-designed Currencies

From Josephine Lohor and Kunle Aderinokun in Abuja, 03.01.2007

President Olusegun Obasanjo yesterday launched the redesigned naira notes and new coins, with a charge to Nigerians to handle them with as much care and respect as that given to the national flag.

The notes are the N5, N10, N20 and N50 denominations while the coins come in 50 kobo, N1, and N2 denominations.

The President who condemned the acts of spraying and stepping on currency notes at social functions, expressed admiration for the plastic (polymer substrate) material used for the new notes, hoping it would encourage government’s clean note policy.

He commended the Central Bank of Nigeria (CBN) for using the three major languages on the notes as that has made the currency truly Nigerian but hoped the law would in future allow the use of more languages.

Obasanjo also hailed the use of the portrait of a renown female traditional potter, the late Ladi Kwali, on one of the notes, saying “I salute the CBN for celebrating a woman on our currency” and appealed to Nigerians to accept and use the new coins and notes.

Speaking at the formal launch, Governor of CBN, Prof. Charles Soludo, who presented the new coins and notes to the President and members of the Federal Executive Council (FEC), disclosed that they were produced at half the previous production costs and conform with international best practices like other world currencies.

He disclosed that the cost of printing the notes has gone down by 50 per cent while that of minting the coins has reduced by 60 per cent.

Aside the cost, Soludo noted that a solution had to be found for persistently dirty notes, low use/patronage of coins due to weight, which is why the new notes and coins are more user-friendly, smaller in size, tear and stain-free, and lighter in weight.

He also explained that Wednesday’s launch was the first phase of the currency reforms, as the second phase will involve the higher denominations.

He advised members of the public to exchange their old notes and coins for the new ones at any commercial bank between now and May 31st but that the old ones would remain legal tender for the next three months.

At anpother launch held in the banking hall of the Abuja branch of the CBN, the apex bank governor also advised commercial banks across the country to ensure that coins constitute 20 per cent of their currency transactions.

The new currencies, he said, were printed 50 per cent locally by the Nigeria Security Printing and Minting Company Limited (NSPMC) and 50 per cent abroad by De La Rue, France.

An elated Soludo posited that the introduction of the new currency marked a new era in the Nigerian Payment System.

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Nigeria is indeed building champions and the likes of Soludo has the skies as his limits if there is any limits at all to his great and gigantic strides.

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Check out the new currency:

http://news.bbc.co.uk/2/hi/in_pictures/6407117.stm

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More on Nigerian currency notes (a history)

http://www.cenbank.org/Currency/Oldnotes/1973.asp

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Soludo on IMF, World Bank
SIR: I write in response to the story: "Scrap IMF, World Bank, says Soludo." Hear, hear that is the way to go, Professor Soludo. You know your onions! The people of the world are fed up with institutions like IMF and the World Bank for their antics in making prescriptions which only benefit the developed countries, especially the United States and the European Union countries.

The rest of the world is made to think that the IMF and World Bank are actually uninterested parties in the consequences of their prescriptions when on the contrary, they are pushing for the benefit of the developed countries. Unsuspecting countries have continued to follow the dictates of these bodies, suffering all kinds of unsavoury consequences in their implementation of SAP, SFEM, and what have you, with no relief whatsoever.

Somebody should have said what Soludo just said much earlier but it is nice to know that Soludo is working on things like this. I am solidly behind him. I know that soon, the so-called advisers of the Nigerian president will see to it that he reshuffles his cabinet to remove Soludo for daring to speak in such terms.

Perhaps Soludo was referring to the structure of the United Nations as it now exists in calling for a different structure. I join with him in calling for a complete overhaul of this global body. The UN should forthwith be made democratic. No nation should be allowed to have a veto power over the rest of the members. There is no justification for such an arrangement in the world today.

All countries are equal. It just happens that some have developed themselves more than some others and in many cases, the development of those countries has been at the expense of the people and resources of some other countries. Thus there is no reason any of the countries of the UN should now lord it over the rest. Any country could develop rapidly or otherwise but the mere fact of development should not give any country any entitlement to lord it over others.

All countries should start fighting for a more democratic world. The Security Council should continue to have 15 members who will all be rotated periodically so that all member nations of the UN have an opportunity to serve in it. Again, no nation should have the right to veto a decision of the UN Security Council.

Philip Ikomi,
Houston, Texas, United States