Wow, I am not frankly sure whether you really and seriously mean the question or whether you are just joking. I am also not sure whether you are from Nigeria and whether you have ever visited the country or live there and if so, what part of the country lived at.
Samuel
How have the powerful ignored the yearning of the masses, Samuel?--On Mon, Feb 2, 2015 at 5:36 PM, Samuel Zalanga <szalanga@bethel.edu> wrote:Wow, it is interesting to write something that can touch a nerve-center of the consciousness of Nigerians. Given the reactions written, it is obvious that Soludo touched something somewhere that not even the powerful can ignore as they have ignored the yearnings of the masses.It reminds me of Amy's Chua's book on the "Battle Cry for the Tiger Mom." One reviewer said admire her or hate her, if someone writes a book that makes many Americans talking, there must be something sensitive that they touched about American consciousness.It is nice to read all this well-written reactions, but ultimately it is the concrete reality on the ground that is the judge to any claim. There are some empirical evidence that even the most skeptical person cannot deny. It is good to travel around Nigeria by road instead of flying. I suppose many are afraid of doing that. But there is a lot that one can see that way.So as we process all this debate let us remember the lives of millions of Nigerians who have no other place to go and frankly their lives is the best evidence for determining whether Nigeria is making progress or not. The whole debate reminds me of how structural adjustment was debated with regard to whether it is working or it is not and the evidence needed to back it. It is similar to some of the debate between Republicans and Democrats.Often to engage my students, I start by telling them we are at the of history kind of situation, and often they bring concrete evidence to convince me that this may not be the case.I remember by the time I was leaving graduate school, I prayed that I wish one day Nigeria would wake up and all the oil is finish. I thought so because I realized our oil money has distorted the thinking of many in the country. Institutional building have been ignored. Meanwhile Singapore, Japan and South Korea are not exporting oil. We will see what is going to happen in the future. ANyone who has studied comparative development strategies knows that many Nigerian elites have been lazy in just depending on oil. If all these embezzlement was of money generated through taxing market women or peasant farmers, the country could not have sustain itself to this point. With good leadership, Nigeria does not need oil at all. And the mere existence of oil does not mean development, or justice for all as history has shown.As for religion, I have consistently said that given how religion has expanded in the past 50 years in Nigeria and yet we are experiencing the current moral and ethical decay, what empirical evidence is there to support the fact that this kind of religion will bring about positive transformation now or in the future?Islam and Christianity claim to worship the true living God, and they perceive Buddhism and Hinduism as paganism. But in Nigeria we have a situation where people who worship the true living God, governments that sponsor people to go to pilgrimage in order to encounter the presumably true living God; yet, the people have no shame that their living God cannot give them inspiration, discipline, foresight and wisdom to run the country in such a way that they can manufacture their own cell phones, bicycles or motorcycles. The people worshiping the living God shamelessly go to the "pagans" and order technology, especially SUVs and drive them on the road to flaunt their success.For an empirical social scientists when one looks at such evidence, the question is: giving the way people live in the modern world, does your Christianity or Islam matte seriously. Are you more in need of leaders who go on pilgrimage or sponsor pilgrimage but do the wrong thing, or people who do the right thing but never go on pilgrimage or sponsor someone to go on pilgrimage? What is the empirical evidence. Do not ignore empirical evidence people all the founders of the two religions were followed because people saw empirical evidence that they offered something better than what existed before them. .At best the Christian and Islamic believers can claim salvation and they will go to paradise, but here on earth, there is evidence that their religion does not seem to make any difference. And if it is making the kind of difference claimed, it is amazing how the Omnipotent God can defend Himself with language like things could have been worse, when there are countries that do not have that kind of religion but their situation is far better.AMong the many problems of Nigeria, one of them is misuse of religion especially to persuade gullible people when the religion is actually working against what it claims to bring about. And I say this based on empirical evidence on the ground. Since I was a boy they have been talking about all these religions but see what my generation have seen in spite of the expansion of the faith traditions. Just lament the dishonesty, where people who are creatures are trying to claim to be creators. Your Islam and Christianity matter little if the evidence of the ground does not support the ideal claims of the faith which anyone who cares can find out from the library. If they are working in Nigeria well, even a skeptical cannot deny that, but this is not the case.My lamentation.
Samuel--On Mon, Feb 2, 2015 at 10:36 AM, Oluwatoyin Adepoju <oluifayantra@gmail.com> wrote:The CBN And Soludo's Ponzi Scheme By Odilim Enwegbara
It's so ironic to read Soludo's recent criticisms of how this government mismanaged our economy. It's ironic because Soludo's era as the chief banker of Nigeria (CBN governor) was a period of unprecedented monetary policy flip-flops, which turned the country's financial sector into a Ponzi scheme.Charles SoludoThere was no one such shocking and bizarre policy like his so-called "redenomination of the naira" in 2008 with the goal of removing two decimal points from behind. In other words, he single-handedly decided to drastically revalue the naira from N125 to a dollar to N1.25 to a dollar. Saving the country from the potential monetary tsunami, came when late President Yar'Adua publicly called him to order by suspending the naira redenomination policy.What made Soludo's so-called naira redenomination such a bizarre policy was the $12 billion contract expected to be awarded by the same Soludo in an effort to print about six billion naira notes. As bizarre as such policy was it also bothered on corruption given that the same Soludo had earlier wasted billions of dollars awarding contracts to print N5, N10, N20, and N50 in addition to billions of coins also earlier put into circulation, which nobody used.If this same Soludo spent over $40 billion in his false efforts to artificially keep the value of naira to a dollar at N125, of course was Soludo not stopped by Yar'Adua he would have needed close to $3 trillion dollars to keep his "redenominated naira" at N1.25 to a dollar.During Soludo's five years as governor of CBN, the apex bank was run as if it were an academic institution with textbook theories gussied up within the fanciful precincts of mathematical equations. And as a result banks agreeing with this idealized neo-classical monetary specification were assured of getting away with their Las Vegas casino banking, so long as they massaged his ego.With this also, banking turned into a celebrity profession, and bank chiefs competed with Hollywood celebs in opulence. With this mind-set, every banker that went to work simply went in search of the newest financial innovations that should guarantee them leeway to defrauding millions of bank customers their hard-earned incomes.And to ensure that the unsuspecting customers never knew how banking had turned into Ponzi scheme, banks cooked their books year-in-year-out by declaring unheard-of 1000 per cent profits, legitimized by the sheer accounting fraud that went under his supervision.As if not enough of this Ponzi scheme, banks in their money-doubling scheming, using their bloated books charmingly lured millions of unsuspecting citizens to invest in bank stocks through illegal margin lending, in connivance with stockbrokers in illegal IPOs that severally went on even when the banks had had enough and had no need to raising more money, while oversubscriptions were only returned after having been used to further hype bank stocks. All these went on while Mrs. Ndi Onyuike Okereke, as the DG of NSE, looked the other way.Little wonder, by the time this 419 banking supervised by Soludo was over, more than N2.5trillion belonging to millions of coned local investors was stolen. Besides dispossessing them of these hard-earned savings, their pensions and landed properties were equally lost under Soludo's watch.However, in their efforts to swindle unsuspecting millions of bank customers, the overly risk-exposed banks, too met their waterloo when they were forced to contend with trillions of naira nonperforming loans along with the sudden exit from the country foreign portfolio investors who, in their speculative search of high arbitrage overseas, sold off their bank stocks.In Soludo's Ponzi scheme banking supervision, the country witnessed the worst oversight and supervision system to the extent that the bank chiefs were using SPVs (Special Purpose Vehicles) to launder hundreds of billions of naira belonging to customers and shareholders.If not the timelier arrival of Sanusi Lamido Sanusi as the new apex bank chief, the ticking time-bomb would have exploded, causing irreparable damage to this financial house of cards built by Soludo. As a banker who understood how rotten the system had become, Sanusi knew it wouldn't take long before the devastating explosion occurredExpectedly, with most of the banks failing the CAMELS+ (capital adequacy, asset quality, management quality, earnings quality, liquidity, and sensitivity to risk) test, a stress test of the financial health and well-being of a banking institution, to prevent the potential contagion about to hit the country's financial system, N620 billion bailout as a life-support machine was provided to the banking system while the long-term solution was being sought, which ended up in the establishment of AMCON, as the ultimate vehicle needed to purchase from the banks their life-threatening nonperforming assets.Thanks to the rightful appointment of Mustafa Chike-Obi, a top-class Wall Street banker as AMCON's managing director, AMCON has since mid-2010, worked tirelessly and patriotically to finally detonate the ticking bomb Soludo's Ponzi scheme monetary policy had subjected the country to.That it is this same Soludo, whose gross mismanagement of the country's banking sector which has since cost the country trillions of naira to clean-up, should be the one arguing that the Jonathan administration is incompetent and as a result has grossly mismanaged the country's economy is mind-boggling to the say the least.To the extent that Soludo was particular in stating that Jonathan's ''record on the economy is a clear 'F' grade,'' and goes on to further argue that ''this government has performed worse than its predecessor — Obasanjo regime [administration],'' forces one to wonder why this shouldn't be a timed vengeance to Jonathan who as an acting president in 2010, surprisingly supported Peter Obi of APGA in Anambra's 2010 governorship election instead of the overly arrogant Charles Chukwuma Soludo of PDP, who schemed Andy Uba out of the PDP governorship primaries; which so offended Obasanjo to the extent that he personally mobilized against Soludo to ensure that he loses the 2010 governorship election in a big way.Enwegbara is a development economist.--On Mon, Feb 2, 2015 at 4:32 PM, Oluwatoyin Adepoju <oluifayantra@gmail.com> wrote:
Soludo's Misinformation
- Sunday, 01 February 2015 00:00
- Written by Nicholas Okoye
- See more at: http://www.ngrguardiannews.com/sunday-magazine-sp-509870158/196100-soludo-s-misinformation#sthash.sF3lGrYA.dpuf2 Comments
Jonathan vs Buhari Rejoinder
FIRST of all let me restate my credentials for those of you that do not know me, I am not a public official, I have never held public office and I have been passionate and focused on one general area of National Development, with four specific focus pillars, for the past five years, and these are Leadership Development, the promotion of and the equipping of Entrepreneurs, as well as the fundamentals and the resources for the empowerment of the Nigerian Women and Youths. So I like to think that I have become an expert on these subjects in the last five years as I live and wake up every morning thinking of nothing but how to reposition our Micro, Small and Medium Businesses, how to develop our Women and Youth owned businesses and how to support our Leaders to get the right tools, the ideas and the resources they need to make things happen for Nigeria in general and for these groups in particular. You will not find me taking on our established authority because they have not done things my way or because they have made some mistakes. I believe there are better ways to get my voice heard and I have access to the certain decision makers so I get my voice heard in that way, and in some cases I write my opinions in public forums without violating the rights of those I seek to advise. I know that my way or my ideas may not be the best way and I also know that everyone and I mean every one, including Prof Chukwuma Charles Soludo makes mistakes. So I seek understanding first, rather than to condemn others.
When I was very young our teacher would always carry out what she called the "MINDSET" experiment. I am sure a lot of you are familiar with it. She would pour water into a glass and stop at the half way mark and ask us "is this cup half empty or half full?" I was always the half full guy in the class room. And I would hold onto that position all through my education and all through my life, and I am still now the half full guy in the room. I am an unapologetic opportunist. I see great things happening for Nigeria and those that are not happening yet I still see the positive aspects and potentials that these things will happen, given enough time. So you can tell how disappointed I was when I read the article by Prof Chukwuma Charles Soludoon the performance of President Goodluck Jonathan and this administration. There were so many things wrong with that thesis, to say the least, it was the strategic way in which Prof Soludo designed it to look objective, but it was full of personal attacks and petty issues, you will have to have a strategic mind or you may have to read it a number of times before you can catch what I am talking about, so I will break it down for you in this paper.
Prof Chukwuma Charles Soludo
I must first of all confess that Prof Soludo is a great man and a very intelligent scholar. We were lucky to have him as our Chief Economic Adviser to the President and subsequently Governor of the Central Bank at the time he served. Anybody that reads my write ups will agree that I, only a few weeks ago wrote a very objective article on the performance of Prof Soludo and Hero in him that saw to the banking consolidation revolution, which ushered in a new era in Nigerian Banking and which was what was needed at that time. However, the point is that times change and whereas Soludo was needed at the time he served as Central Bank Governor to drive the process of building mega Banks in Nigeria, it was Sanusi Lamido Sanusi as Central Bank Governor, currently the Emir of Kano, that was needed to clean up the mess that resulted not long after the consolidation, in which many of the Super Star Commercial Bank CEOs who now had access to monumental volumes of cash as a result of the successful consolidation policy started behaving like kids in a candy shop and went on insider borrowing sprees that nearly brought down our economy. Sometimes it scares me to think what if President Yar 'adua had actually renewed Prof Soludo's tenor. Considering his cozy relationship with these super star CEOs of Banks, would he have had the courage or the will to rein them in? That is a discussion for another day. Let me look at his paper for a second.
Strategic Intent
I first started by asking myself what was Prof Soludo's Strategic intent on writing that paper. And with all due respect to the Professor whom I have had the highest levels of respect for, I think his strategic intention was to misinform the Nigerian people. And this is why I say so.
There is something in military and diplomatic circles known as counter intelligence. On one hand Intelligence is when you gather information and provide it to decision makers on strategic aspects of your opponents or competitor's plans or activities. And in this case your opponent or competitor may be a foreign Government, a competitor company or an adversary in the work place etc. On the other hand Counter Intelligence is when you deliberately misinform the other side by providing them with information that they believe to beintelligence, they believe to be true and they will go out and act on it. Prof Chukwuma Soludo's article was an attempt at Counter Intelligence because some people who do not know may actually believe him and go out and vote based solely on what they believe to be true, as narrated by Prof Soludo. And from my analysis not much of what he was saying was credible, much of it was simply not true and in some cases he straight out lied to us.
Soludo's Contradictions
Opening Statement: He started out by saying that he has been traveling the World and only on occasion does he followup on Nigeria's affairs. I felt that was rather condescending. He is a Nigerian and the international community only respects him because of the strategic roles he played as Nigeria's Chief Economic Adviser and Governor of Central Bank. So I would rather see a more Statesmanship approach to his and others like him, when they write about Nigeria, especially as they call themselves our Leaders. The World will read what you write, Nigerians will read what you write so please our Leaders, our fathers, our mothers and our big brothers and sisters let us treat Nigeria with much more respect.
Savings: Prof Soludo went on about how ineffective saving as a Government is when people are hungry. He said His Excellency Peter Obi missed the point in his savings approach to Governance. However the same Prof Soludo in the very same article says that he did a great job by saving Nigeria $45 billion when he was Governor of the Central Bank. Fellow Nigerians as Governor of the Central Bank you are also an economic adviser to the President and the Federal Government, if Prof Soludo by his own admission says that Governor Peter Obi did wrong to save money for future Governments of Anambra State, and by definition Soludo does not believe in saving then why did he not advise President Obasanjo to spend all our foreign reserves? His Excellency Peter Obi can defend himself, however I know that with the exception of Governor Fashola, Peter Obi is still considered one of the most effective performing Governors in the history of Nigeria's State Governments. And Soludo can NEVER take that away.
Price of Crude Oil: Prof Soludo talked about the price of crude oil when he was Governor of the Central Bank and I have checked, prices stood at about $46 a barrel in May of 2005, climbed to and hovered around $60 to $70 for most of 2006. Prices fell below $60 early in 2007 but climbed to an unprecedented $80 by November 2007 and then all the way up to $140 a barrel by early 2008, which it maintained that price a while before it fell again to the just above $45 in late 2008 and it subsequently rebounded in early to mid-2009. There are a lot of reasons for the oil price to be bouncing up and all over the place and none of those reasons have to do with the skills of the President or his Economic Managers. In actual fact, the present oil price fall is as a direct result of four major issues. First of all, there is over supply coming from mostly OPEC countries, especially Saudi Arabia, UAE etc. and the Shale Oil fracking companies in the United States, this over supply is putting a lot of pressure on the international price. Secondly, there is so much investment going into alternative energy with the German Government investing over $1.4 Trillion, yes you read it right, $1.4 trillion dollars in the largest energy project in the World nicknamed the "Stromautobahn", which is a combination of wind turbines that will harvest power from the winds out in the sea and supply it to the heart land of the Germany's industrial base.In addition, the European Union has called for a 35% target for all NATIONS of the EU to get their Energy from renewable resources by 2020. German has set a more ambitious target of 80% of its energy to come from renewables by 2050, and they have put their money where their mouth is, with the $1.4 trillion Energiewende (German Energy Revolution) project, which has been nicknamed Stromautobahn.Thirdly, there is so much pressure on Russia from sanctions being imposed by the west that Russia is willing to sell its crude at any price. And finally the only growth market for crude oil in the World today is Asia, especially China and India and both Nations are slowing down their consumption of crude oil due to the slowdown in the demand for their products and services from their European customers. I believe Prof Soludo should know all this, so why does he pretend that he doesn't? The exchange rate of our currency will continue to depend on our ability to earn more foreign currency and so we need to expand our ability to earn by expanding our exports, as long as we depend on oil for foreign exchange our naira will rise or fall in relation to the price of the crude oil.
Rebasing of the Economy: Prof Soludo made a caricature about the efforts to rebase Nigeria's economy and said in his article it amounted to nothing. He made bold to say that on all the indices used by international reviewers Nigeria's economy is showing poor results, he went as far as to score the Administration an "F" on the economy. On this I cannot be more ashamed of Soludo, than to say this. Prof Soludo lied to the Nigerian people. Hear him; "First, my friend was educated that re-basing the GDP is no achievement: it is a routine statistical exercise, and depending on the base year that you choose, you get a different GDP figure. Re-basing the GDP has nothing to do with government policy". First of all he is full of contradictions, he says we have failed to make progress on any of the economic indices, then he says in the same thesis that our over $510 billion GDP economy is not progress, (he used $540 billion in his article). He even went as far as to say that the rebased figures of the economy is NOT as a result of any Federal Government Policy in the statement above. Again he is dead wrong. The figures that gave the Nigerian economy a boost after the rebasing came from the fact that new industries have been created and have grown in Nigeria since the Administration of President Goodluck Jonathan. The Entertainment Industry that is presently employing highest number of young people in Nigeria outside the Agriculture sector is a big one. It has never featured in the calculations in our Gross Domestic Product before the rebasing. And for the benefit of those who do not know, our GDP is calculated by summing up or totaling all the goods and services bought and sold in financial transactions in the economy in a given year. So, is Prof Soludo saying that the millions of naira that are being earned by Don Jazzy, Banky W and P square, by Omotola and Ramzy Noah are not real? That the N120 million earned by "30 days in Atlanta" the Movie is not real? That the hundreds of United States citizens, especially their young people I have personally heard singing along to the tune "Dorobuci" after they have purchased the song on iTunes is not real money? The fact that Radio stations in the USA, and I have personally witnessed this, are playing Nigerian music to their American audiences, and stimulating purchase orders, for Nigerian music, which in turn is fueling a new export industry for Nigerian entertainment, is no longer a fact?
What about the Internet and the Telecommunications industry, which is an economy in itself. It also was a major part of the rebasing of the GDP, as this industry did not exist as a basis for previous calculations of our GDP. And whereas the Telecommunications Revolution was started by President Obasanjo as even I have pointed out in previous write-ups, it was President GoodluckJonathan that hasconsolidated the Telecommunications industry and provided additional policy support for it to keep growing, there lies the justification to include it in the GDP calculations, hence the need for rebasing the GDP. So, is Prof Soludo saying that the over $6 billion that the four GSM telecommunications firms are earning every year is not real? Or that the Value added services industry, which was built on the back of the GSM industry and ispresently worth over $1 billion a year is also not real? Is Prof Soludo saying that over one million recharge card resellers that are presently in every village across Nigeria are not real and that the money they are earning and using to feed their families does not exist? I think Soludo should rethink his position on the rebasing of the GDP, as he is misinforming the Nigerian people and he is being disingenuous.
Debt Relief and Domestic Debt: Again, with all the respect I had for Prof Soludo I cannot understand why he would say the things he said about management of our debt. After reading the article again, I then noticed very clearly why his words cannot be trusted. He made it very clear that the debt relief and buy back carried out by the President Obasanjo Administration was a great thing. However, I combed the combed the thesis to find anywhere he gave credit to where credit is due, and I did not find it. So Prof Soludo has suddenly developed selective amnesia. He has deliberately forgotten that the architect of the Debt relief and the driver that made it possible is the present Coordinating Minister of the Economy, Dr. Ngozi OkonjoIweala and for which she was appointed Managing Director of the World Bank in recognition of her outstanding achievement as Minister of Finance for Nigeria at that time. Why would Prof Soludo fail to point this out? In any case, I believe he was being disingenuous and I don't think anybody else should trust his words. And in talking about domestic debt, Prof Soludo knows very well that prior to 2004 Nigeria did not have a domestic debt market. The Federal Government of Nigeria had stopped issuing bonds for over thirty years. I as the Chief Strategy Officer of the Nigerian Stock Exchange was one of those who made elaborate presentations to him and to other members of the Federal Government in 2004 on the need for the Federal Government to develop a domestic debt market. We made the case that private companies could not issue bonds until the Federal Government issued bonds as this would set a bench mark. The Federal Government listened and they have since been issuing Bonds through the Debt Management office and now Prof Soludo says it is all wrong. I cannot take on the argument on domestic vs foreign debt in this paper, but I will in the future. However, I will say this, domestic debt is far better than foreign debt, and even if the buyers of the bonds issued are foreigners, they the foreigners know that the bonds were issued according to certain domestic rules of issuance and so they are well aware of the risk of investing in Nigerian debt. It is on the basis of this that many of our Banks have been able to issue bonds internationally and many corporations have issued commercial paper internationally and are warming up to issue bonds as well, Prof Soludo would rather see all this come to a halt with the resultant negative effect it would have on millions of Nigerian jobs. In any case, a lot of the debt now on the books of Nigeria as domestic debt includes the billions of dollars used to restructure the bad debt created by his friends in the banks that SanusiLamidoSanusi had to rescue by getting CBN to set up AMCON, in association with the Federal Ministry of Finance. I wonder why he is talking in this way, whose side is Prof Soludo on? He is clearly not on Nigeria's side in this matter of domestic debt issuances.
Speed Bumps to reparation of foreign earnings: someone should tell me I did not read Prof Soludo state that he placed some speed bumps on the road to the reparation of foreign earnings from investments made in Nigeria by foreigners. Again he lied. In fact, under Prof Soludo, the ability of foreign investors to take out their earnings in dollars was never so easy. Many of the telecommunications companies took out billions of dollars in the days leading up to the financial meltdown in 2008 and it went on till May of 2009. In fact, after the meltdown the new Governor of the Central Bank, Sanusi Lamido Sanusi in August of 2009, hired me as a consultant to the Central Bank to determine the link between the financial meltdown, the fall in the capital market and the reparations of foreign investments, as he felt they were all linked and tied together. We spent hours debating it in his office and I was mandated to provide solutions on how the Banks could lend money to the capital markets safely in the future, as these solutions would assist the Central Bank, the Securities and Exchange Commission and the Financial Services Regulatory Coordinating Committee (FSRCC) to implement new rules. I did my job. And I pointed out to the Central Bank Governor and the FSRCC at a full meeting, that it was the Global financial meltdown that led to the meltdown of the Nigerian Capital market, because international Fund managers were taking their money out of Nigeria, and this in turn led to the near collapse of the financial system and the collapse of many Banks. Many international fund managers rushed to take their investments out of Nigeria as a way of augmenting their losses in their home markets. I pointed out to Sanusi and the FSRCC, that internationally, Governments and Central Banks tend to slow down the process of reparation of foreignearnings when they see that there is a rush from outside investors and that our Central Bank under Soludo did not do this. In fact, I went further to say that what Nigeria experienced in 2008 was nothing but a "Run on the Bank" by foreign fund managers, the Central Bank of Nigeria in this case being the bank that was rushed. And the Central Bank Governor then, Prof ChukwumaSoludo did nothing to stop the run on Nigeria, I guess he felt we had the reserves, which we did, but he did not see the resultant effects on other parts of the economy. I went further to explain that it was this run on the CBN by Foreign Fund Managers taking out their investments from the Stock Exchange, and the CBN having to provide the resultant foreign exchange that led to the fall in the Nigeria capital market, which put pressure on margin loans that our commercial Banks had lent to the capital Market operators, which in turn led to the crisis in the Banks, as the loans could not be paid back. This crisis further fueled the selloff in the Nigerian Stock Exchange, which in turn caused a panic and a bandwagon effect, which had much larger implications for the wider Nigerian economy, and sure to the wide spread failure of many companies, many banks and the loss of hundreds of thousands of jobs. The Central Bank under Sanusi Lamido Sanusi thus mandated me to develop some new rules and guide lines for the participation of commercial banks and lendingin the capital market in the future. I did that, we called it "Margin Lending Guide Lines" and the Central Bank in association with the Securities and Exchange Commission issued it for both the Banks and the Broker/dealers of the Stock Market.
This history is important because Prof Soludo was Governor of the Central Bank for 2007, 2008 and he left May 2009. So he was in charge when billions and billions of dollars were demanded by foreign investors and they got it, and he did nothing to stop them or to slow down the process of their exit. Yes we could afford to pay them and it was their right to get their money, however, either Prof Soludo did not know, he did not understand or he did not care about the linkages between foreign currency reparations, which he allowed to happen, the stability of the Nigerian Stock Market and the wider stability of the financial system, and by definition the Nigerian economy, which was brought to its knees as a direct result of Soludo'saction or should I say inaction. He was therefore responsible for the hundreds of thousands of job lost as well the over N5 trillion in bad debt that AMCON is presently restructuring and managing.
Economic Team: I wonder why all of a sudden Prof Soludo is trying to remind the Nigerian people that the constitution provides some specific roles for the Vice President. We know that there is and there has always been a National Economic Council, however Prof Solodu failed to mention that the Council is an Advisory Council and not an implementing agency. It is set up to advice the President and that is that. The President may choose to manage the economy in any way he feels fit as ProfSoludo rightly pointed out very clearly, that the President has the mandate of the Nigerian people, even though Soludo was being mischievous by saying it is a joint mandate, it is a joint ticket, yes but it is not a joined mandate Prof Soludo, you should know better. The National Planning Commission is again a planning body and not an implementation body. It has many agencies that preform supporting roles for planning, including, but not limited to the National Bureau of Statistics. As for the National Council on Privatization its role is very clear in the law that set it up. And there is no issue here as to how it is managed and what we expect from its performance. I still do not see why these were mentioned at all in Soludo's thesis. Maybe I am a bit slow, but I will give Prof Soludo the benefit of doubt that he was not trying to knock heads together in the Federal Government at this most critical time when all hands must be on deck and we are just a few days to a national election.
The Economy: And just in case the so-called Professor of Economics, Soludo and those who agree with him continue in their self-delusion that President Goodluck Jonathan has done nothing and his Administration has failed on the economy, I refer them to the CNN Money web site (or twitter @CNNMONEY) in which a team of World Class analysts have rated all the economies of the World and have stipulated that Nigeria will be among the top three economies in the entire World in terms of growth for 2015. After China and Qatar. Where China will grow that 7.3%, Qatar 7.1% and Nigeria 7%. I wonder who made this happen.
IN conclusion Prof Chukwuma Charles Soludo has disappointed me. As a younger brother that used to look up to him, I felt rather betrayed by the lies and contradictions in his thesis. It is obvious that he has personality issues with some of the players he mentioned as well as with some he did not mention. However, I would have expected him to stick to the facts and not make up facts of his own in order to bring people down or to rewrite history. And I would like to point out that people on his level of national accomplishment and recognition should learn how to speak more accurately. For instance, saying that 95% of the voting population has made up their mind on who to vote for is simply not true, I wonder where he got those statistics from. Most of the polls I have read say that we have between 33% and 35% of the voting population that is still undecided, which means that the election can go either way. So the results will come down to the wire and one strategic push in the final days to the election could tip the balance in favour of the one or the other candidate.
In addition, Prof Soludo and others like him need to be reminded that since May 1999, Nigeria has been ruled by the PDP. We did not have an Obasanjo Political Party, it was the Peoples Democratic Party that ruled, while President Obasanjo was in Power and so it is wrong to try to separate the continuity in governance. The great achievements of Debt Relief, Telecommunications, Banking Consolidation, Amnesty Program, more recently Transportation and Rail reforms, Pension Reforms, Agriculture Revolution, Alma Jiri education, Mortgage and Housing reform, Power reform, Nigeria Content revolution, the list is endless are all achievements of the PDP controlled Federal Government of Nigeria in which our Presidents were either President Obasanjo, President Yar'adua or President Goodluck Jonathan. And whether ProfSoludo likes it or not he served the PDP controlled Government and is now a part of the PDP legacy.
We now know where Prof Soludo'sympathy lies, and it is inconsistent with his party APGA. His arrogance, misinformation and double talk tells me that we in Anambra State are lucky he never became our Governor.
Nicholas Okoye is the CEO of ANABEL GROUP, Founder of EMPOWER NIGERIA and the convener of the Nigeria Leadership Summit.
__._,_.___On Mon, Feb 2, 2015 at 4:31 PM, Oluwatoyin Adepoju <oluifayantra@gmail.com> wrote:Chukwuma Soludo: Serving a diet of half truths, outright lies and self serving propaganda
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- Dealing with the Professor's selective amnesia
By Temi Jack
Opinion – Without doubt, Professor Charles Soludo is a brilliant macro-economists and public intellectual. It appears however, that the Professor suffers from an incurable tendency to emasculate reason; intellect and good judgement when his ambition and rabid desire to stay relevant is involved. His recent article which deliberately ignored and distorted facts for clearly pecuniary reasons is reminiscent of the shock Nigerians experienced when Sanusi blew open the rot that he deliberately ignored and covered while serving as the CBN Governor. Of what profit then, is the Professor's brilliance, if it is not anchored on sound principles and integrity?
Facts we know do not lie and facts, if they are to be presented must be verifiable, current and a reflection of the reality. Why would Soludo, a professor of economics use 2010 and 2011 to judge macro- economic performance in 2014? Does it mean that he could not access recent data to work with? It is clear that he deliberately and conveniently ignored the most recent statistical information from CBN, NBS, World Bank and other reputable international organizations because they don't tally with his objective which clearly is to discredit the President Goodluck Jonathan administration and his economic management team lead by Dr Ngozi Okonjo Iweala. Whose errand is Soludo running? Must one resort to cheap lies to be relevant?
Let's hear Prof Soludo verbatim: "…poverty incidence and unemployment are also simultaneously at all-time high levels. According to the NBS, poverty incidence grew to 69% in 2010 and projected to be 71% in 2011, with unemployment at 24%. This is the worst record in Nigeria's history, and the paradox is that this happened during the unprecedented oil boom …"
Is this the truth? Hell no! According to recent figures from the National Bureau of Statistics, NBS, current poverty figures stands at 33.1% and not 71% like Soludo bogusly claimed. Unlike what the professor said in his much-publicised essay, under the Jonathan administration, Nigeria is experiencing her lowest incidence of poverty in history.
Let's hear Soludo again: "…His record on the economy is a clear 'F' grade. As one reviews the laundry list of micro interventions the government calls its achievements, one wonders whether such list is all that the government could deliver with an unprecedented oil boom and an unprecedented public debt accumulation. …" This is clearly not an objective assessment or a reflection of the reality on ground today. For someone of Soludo's academic and professional stature, I cannot attribute this to ignorance or lack of facts. This leaves me with the sad and pitiful conclusion that the Professor is being deliberately mischievous and his entire distorted monologue is meant only to disparage the government and the economic team. His blanket dismissal of economic performance and condescending ascription of "F" grade just makes this the more obvious.
Contrary to his maligned view, Nigeria according to analysts at Wall Street Journal, "has emerged as the frontier-market economy that is attracting the most attention from American and European multinationals." The report went on to state that "Nigeria is joined by Argentina and Vietnam as the frontier markets that multinational corporations are most interested in, according to a new index of corporate sentiment."
This is coming from the Frontier Markets Sentiment Index, created exclusively for the Wall Street Journal by Washington DC-based advisory firm Frontier Strategy Group. This tracks the level of interest shown by major European and American multinational companies in countries across the frontier markets world. Is Soludo saying that investors from America and European multinationals would willy-nilly troop to an F-grade economy? Can Soludo be this petty? This is only possible if in pursuit of an ulterior motive, which he makes so obvious.
Is it also not curious that Soludo's "F-grade" economy has witnessed an unprecedented growth rate of 7% in the last couple of years according to CNN Money? Nigeria's economy in the years under review is witnessing the third highest growth in the world behind China, 7.3% and Qatar 7.1%. What is Soludo really saying? If he is nursing a grouse with the economic management team lead by Dr Ngozi Okonjo Iweala, he should be bold enough to raise it straight and not dress it with this non-sense veiled as economic analysis.
Beyond quoting data from various agencies, it is on record that under the Jonathan's administration and his economic management team, the power sector reform has reached an irreversible level, the power infrastructure has been effectively privatized, PHCN is no longer a government behemoth.
Soludo has clearly joined the chorus of the opposition who in spite of overwhelming evidence of unrivalled transformation of Nigeria; choose to sing that "Jonathan has done nothing". He is free to do so, but should be bold enough to approach them for membership. However, he cannot succeed to distract discerning, honest and patriotic Nigerians from the many achievements of the President even as they read his lengthy essay:
a) Power generation has reached an unprecedented 4, 500 megawatts. This feat was made possible under the Jonathan administration as a result of careful, deliberate and concerted planning, dogged execution and effective policy monitoring. Of course there are still teething issues with evacuation and distribution as a result of the destructive activities of gas pipelines vandals, which the government is set to confront head on.
b) Unlike Soludo's lies about depleting foreign reserves, available data from CBN shows that Nigeria's foreign reserve as at December 2014 stood at a historical high of $41.67 billion. This data can be verified from the CBN website and puts a lie to the claim by Soludo say that "no penny" has been added into the nation's foreign reserve.
c) Any discerning and honest Nigeria will not deny that federal roads across the length and breadth of Nigeria are better today than they have ever been in our recent history. The Benin-Ore road, Benin- Auchi, Enugu- Port Harcourt Road, Kano-Maidugiri Road, Auchi-Okene-Lokoja-Abaji Road, Lokoja-Abaji-Abuja, Abakaliki-Mbok Road, Apapa-Oshodi Expressway, Owerri-Aba Road and so many other federal highways have been reconstructed/rehabilitated under the Jonathan administration. These are things that matter to every-day Nigerians. They don't need an economics professor to teach them non-sense- apologies to Fela Anikulapo Kuti .
d) Under this administration, the rail lines are back, people now have an alternative means of transport and the pressure on our road is drastically reduced. Commuters in Lagos, Enugu, Port Harcourt, Kano, Kaduna and Abuja now are experiencing the pleasure of a train ride- many for the first time in their lives. This is certainly not what you get in an "F" grade economy.
e) Soludo stated that he had been engaged in extensive international travels in the last couple of months and has only followed political events in the country by watching the presidential candidates on TV. Soludo must be commended for exporting his knowledge to diverse ends of the earth but one wonders if he skipped the airports the last time he came to Nigeria. Can he deny the facelifts and system upgrades that have been effected at these airports? Were they possible with by magic? Is it not fair to at least acknowledge that even while we are not where we need to be, we cannot be said to be where we were- the last time the Professor was around in public circles.
f) Soludo made the very laughable claim of saying that the performance of the agricultural sector under Obasanjo was better than what we have presently. How low can he sink so low in shame to make such an obviously untrue statement? It is well known that in the last couple of years, Nigeria spent a whopping $11 billion importing wheat, rice, sugar and fish alone. Today, Nigeria's import bill for agricultural produce is less than one billion dollars. It is all due to the dedication and commitment of the economic management team that Soludo has set out to denigrate in his essay. Nigerian farmers know better. More than ever before, Fertilizers, farm supplements and even funds are getting to them a lot faster and easily than before via the "e-wallet" initiative of the President.
g) Soludo said that our exchange rate is bad because of wastage. He favours defending the Naira with our Foreign Reserve. That's short-term thinking. Russia defended her currency and saw that it was unsustainable. So they devalued. Why should the eggheads managing our economy be crucified for doing the sensible thing? Short-term thinking, like Soludo favours won't take us far. Prof., long term means keeping some of the earnings away for the rainy day. That is the idea of GEJ's Sovereign Wealth Fund (SWF).
h) On the debt issue, Prof. Soludo tried very hard to create a mischievous impression about the government and it will serve our interest to set the records straight. In 2004, our national debt stock stood at $46.2B or 64.3% GDP. It took an Ngozi Okonjo Iweala (whom Soludo now criticizes) to secure a relief from the Paris Club. By 2007, our national debt stock stood at a total of US$17.3 billion or 11.8% of GDP. This was after Ngozi Okonjo Iweala left in 2006. In 2011 when President Jonathan was elected president, our national debt was at US$47.9 billion or 21% of GDP. I don't want to go into all the details of the global economic meltdown during Umaru Musa Yar'Adua era that led to that rise in debt. The 21% debt to GDP ratio cannot be described as bad economic management.
i) It is imperative to note that the only noticeable change is the growth of our domestic debt. The reason: the federal government wanted to deepen the domestic debt markets and generate a new yield curve for Nigeria which ultimately could help our corporate bodies. The strategy is for corporate bodies to access capital markets and borrow funds at more affordable rates. The Debt Management Office, DMO, has been successful on this. Also, the FG raised domestic debts in order to finance budget increases like the 53% increase in Salaries of Federal Civil servants in 2011. The hike in domestic debt was expedient to fund the increase in workers' salaries.
I would end by admonishing Professor Chukwuma Soludo to face the realities of the time. Nigeria is on a journey, a journey of transformation, of national rebirth and renewal. We sure have challenges (and which country does not?), there are more hills and valleys to cross but only a fool or a hate-driven cynic would deny the many strides recorded by the present economic management team assembled by President Jonathan. Political disagreements must not entail bitterness and envy. Soludo is advised to truly "devote his time and energy in pursuit of other passions, especially abroad." and not distract the patriots who are working to secure the future of Nigeria. Yes, Soludo is right, Nigeria must survive and prosper beyond Buhari and Jonathan but Nigerians cannot be fooled into jumping out of the transformation train in pursuit of some esoteric agenda of a few disgruntled hardliners and ego-driven public intellectuals.
On Mon, Feb 2, 2015 at 4:29 PM, Oluwatoyin Adepoju <oluifayantra@gmail.com> wrote:Voice of Obasanjo, Hands of Soludo; A Rejoinder to Prof. Chukwuma Soludo by Daniel Essien
- Smoke and MirrorsIn a skewed article dressed up as an innocuous assessment of the ongoing political campaigns by both the ruling party and the opposition, Prof. Charles Soludo finally broke the silence after over five years of avoiding the public eye. Many of the points raised in the article are typical of grudges hitherto suppressed for a prolonged period but that have finally bubbled to the surface or were perhaps forced out by a higher force.The article published in the Vanguard newspaper of January 25th did not say anything different from what opposition sympathizers, armed with a hunger for power but with limited awareness or with a deliberate disregard for the current hard data, would be disposed to putting out. If this article represents Prof. Soludo's 'big idea' and epiphany, it surely is too little and is coming too late to alter our perception of Soludo the man. For keener minds will see the article for what it is; a subtle act of self-worship by a glory hunter desperate to crawl back into relevance; a 'me too' submission by a man eager to update the public that he is now into 'international' engagements. The last time we heard from the former CBN governor was in 2011 when he was decisively defeated in the Anambra governorship elections by the amiable Peter Obi. Ex governor Obi has moved on to become the head of President Jonathan's re-election campaign in the South East. But it appears that, judging from the content of the ex-CBN governor's recent article, Prof. Soludo has not forgotten that humbling loss.Prof. Soludo set out in his article to discredit the current government's economic management records by twisting facts and drawing ridiculous parallels. Ordinarily, seeing that we are seemingly in an era of ultra-liberal politics where Nigerians enjoy the full rights and privileges of free speech, one would be tempted to ignore Prof. Soludo's submission as just another opinion piece. But one is constrained to put out a rejoinder because a little misinformation in our current climate is too much misinformation. And although the government is yet to issue an official response, this one by a private citizen will seek to examine, paragraph by paragraph, the misrepresentations in Prof. Soludo's article.- Comparing Melons and Water Melons
Prof. Soludo's reference to Shagari's government failure to check excessive borrowing and frivolous spending by the different tiers of government, and his equation of same with the current administration's approach, shows that he may be out of touch with the times. The global economic environment and the current government's policy responses to that environment are markedly different from the Shagari era. For one, while President Shagari had no stoppers in place to control borrowing by the different tiers of government, the current administration has a coherent policy that streamlines the borrowing process for federal and state governments. It is Known as the Medium Term Rolling External Borrowing Plan, a policy which requires that borrowings to be undertaken by the federal and states governments within a three-year planning framework be transparently shown with the aim of focusing borrowings on priority projects and reducing borrowings for non-priority projects. Another plan called Medium-Term Debt Strategy limits both domestic and foreign debt exposures of the government. So now, more than ever, the government has taken deliberate steps to control the debt burden.Also, the increased spending carried out under this administration is focused on critical infrastructure to support the diversification of the economy. Prof. Soludo's position seems to favour pilling up foreign reserve to shore the value of the Naira. This is unsustainable short-term thinking which will do little to help the economy should the oil glut persist, as Russia learnt quite quickly following its initial attempt to defend the Ruble as the falling oil price combined with economic sanctions to hit its economy. And the glut is expected to persist given the prevailing oil supply and political situations in the international market which are markedly different from what Soludo believes he presided over as CBN governor.- 'Not One Penny Added'
The claim by Prof. Soludo that the foreign reserve did not increase at any point under this administration cannot be further from the truth. It is true that Soludo left behind $45Bn in foreign reserve at the end of his tenure as CBN governor. But much of the reserve was depleted during the short-lived President Yar'adua administration as a result of the global economic crunch such that when President Jonathan came into office in 2010, he inherited $32 Bn in foreign reserves from the Yar'adua regime. The current government grew the foreign reserve to a peak of $50Bn in 2013. So although the foreign reserve now stands at $39Bn since part of the foreign reserve was used to fund infrastructural development, it is simply not true that 'not a penny' has been added to the foreign reserve under this administration.Prof. Soludo's comparison of oil earnings in the President Obasanjo regime and President Jonathan regimes reveals his penchant for half-truths. His claim that the average monthly crude oil price under the current administration has been over $100 is a lie put forward to give force to his smear campaign. The data is available for any interested person to verify for himself but Soludo has intentionally cooked up figures to suit his plan of discrediting the government. Or how else does one explain a situation where a former CBN governor applies a wildly overestimated figure for a data even when a simple visual observation would reveal the inaccuracy of that estimate?- Picky About DataProf. Soludo takes his mischief to an unimaginable height, for a man of his standing, by pronouncing that a government has performed woefully in 2015 because the 2010/2011 NBS data for the incidence of poverty and unemployment and future projections on those data are unfavourable, even when readily available recent data show otherwise! By implication, Soludo is arguing that the incidence of poverty for Nigeria in 2015 is much higher than the scary estimated 71% figure in 2011. This is an outright lie. A July 2014 World Bank Report for Nigeria using more recent NBS data puts the incidence of poverty at about 33%of the population.It is also instructive to note that Soludo conveniently forgot to point out that the dollar exchange rate of the Naira depreciated to around N180 in the run up to his exit from office. It is this kind of selective use of data that sets apart a mischief maker from neutral commentators. And Prof. Soludo's article leaves one in no doubt where he belongs.- Obasanjo or Jonathan: Who Wore it Better?The comparison between Obasanjo era growth rate and the President Jonathan era growth rate exposes that Prof. Soludo doesn't take into much consideration the impact of the global recession on economic growth. With a sustained 7% growth rate at the current time when countries like china are cutting back on their growth forecast and Greece, Italy and South Africa are floundering, Nigeria remains in the group of countries with an admirable growth rate. Another issue that may have escaped the professor's notice is the differences in policy priority in the Obasanjo era and in this era.The advent of mobile telecommunications in the Obasanjo era had the effect of ballooning economic growth at a rate that can hardly be duplicated by any other sector in the same timeframe. Nigeria's policy priority at this time is rightly the development of the critical infrastructure neglected over many decades because of a lack of the political will to invest in sectors of the economy which would not yield instant gratification, in the form of higher growth rates, that the government of the day can point to and thump its chest in the fashion that Prof. Soludo has done about the economic growth rate in Obasajo's tenure in his article. Thankfully, this government doesn't seem to be growth-hunting at the expense of developing the critical industries which will have multiplier growth effect on other sectors in the future.Prof. Soludo's stance on the employment generation efforts of the government easily catches one's attention. He pointed out that a country like Greece experiences high unemployment despite the availability of relatively modern infrastructure. While this is true, one must bear in mind that Nigeria struggles with such basic infrastructure that even a marginal improvement in its infrastructure will smoothen a good part of the bottle necks which the Professor mentions in his article. In other words Nigeria is operating at a far lower infrastructure threshold than Greece and therefore still has the opportunity to benefit from the low hanging fruits of infrastructure improvement as far as job creation is concerned.There is surely some economic dislocation in the Nigerian economy as Prof. Soludo raised in his article. But that dislocation is not a product of poor policy decisions by the government, but is rather a temporary disorientation created by an accelerated diversification process which has focused resources on key projects which will reduce the economy's vulnerability to oil price shocks. Things will smoothen out soon as many programmes take root and Nigerians are better positioned to benefit from these programmes.- Much Ado About a Jobs BoardThe Professor took a swipe at the President's constitution of a Jobs Board, a move that should ordinarily illustrate that the government views the issue of unemployment as deserving of a state of emergency declaration. Of course the Job Board is only an additional move by the President Jonathan administration besides the numerous other policy initiatives that have certainly added more jobs to the Nigerian economy than the shambolic NAPEP formulated under Prof. Soludo. Some 1.6m new jobs were estimated to have been added in 2014 as a result of innovative programmes such as YOUWIN, CSS, GIS and SURE-P. Even more jobs will be created in agriculture, power, transport and automobiles in the coming years. So when President Jonathan promised 2 million jobs, he was making a conservative promise. We can choose to juxtapose the current unemployment statistics which has been blown up by graduates of the hundreds of new universities which were non-existent in Soludo's time. In Soludo's time as CBN governor, in addition to the problem of questionable data integrity, tens of millions of unemployed and unsuccessful university applicants were hidden away as 'students' and kept off the unemployment statistics. The current government's crime, as Prof. Soludo sees it, is that it is opening more universities and giving even more access to people that will end up creating an unfavourable unemployment record.- Soludo's Way: Talking Two Different Things at OnceProf. Soludo's article also criticizes the government for spending on critical infrastructure and criticizes former governor Peter Obi for saving money in one breath. This disposition shows that Soludo's position has more to do with his personal grievances with personalities in President Jonathan's camp than it has to do with his sincere disagreement with the government's policies. In any case, at least Soludo hints that a government that piles up foreign reserve in the face of pressing infrastructural challenges is preparing to 'democratise poverty'.This government actually pursues a policy that takes care of the immediate economic concerns as well as the future ones. That is why the Sovereign Wealth Fund (SWF) was set up under this government to set aside money to fund development projects in periods of unfavourable oil prices. Our SWF stands at $2.5Bn and recently received an improved rating by the world-acclaimed Sovereign Wealth Institute, making it a joint 2nd alongside top SWFs of the US, France, Brazil and South Korea, from its previous 33rd position. The SWF in its current form is a more progressive arrangement than the illegal Excess Crude Account (ECA) which was formed during Soludo's time as CBN governor.As Alan Greenspan, the famous former chairman of the US Federal Reserve, noted, economics is not an exact science and it is usually difficult to get economists to agree on the precise actions to be taken to solve an economic problem. One can therefore imagine that while all economists are fully in agreement about the need to protect our economy against plummeting oil prices, building consensus on the means to do so is another matter. Indeed, piling up foreign reserve to defend the Naira is a short-term approach which is not sustainable in the face of the global economic realities.- The Road to Sustainability is Full of ThornsThe structural changes in the global oil marketplace call for a more sustainable approach to economic management than the traditional foreign reserve argument which Soludo has put forward. For although shoring up our foreign reserve would allow us to artificially fight back foreign exchange pressures in the short term, it is not a sustainable solution in itself as the Russia experience showed. A stronger scenario for Nigeria would be one in which the economy is diversified away from oil to cushion the effect of crude oil price volatility in addition to the traditional foreign reserve approach.Economic diversification is the current government's approach to finding a lasting remedy to the oil price volatility problem. That is why the government is investing huge resources in agriculture and building the supporting infrastructure in irrigation dams, rails, roads, power plants, to strengthen the manufacturing sector. But Soludo chose to call such vital spending a waste of resources in his article. He was quick to point out that the built-up physical infrastructure does not match the levels of borrowing, conveniently forgetting that the ongoing efforts to contain the insurgency in the North East constitutes a major area of government spending that is not readily available to be 'sighted' by critics.Government policies are already bearing fruits and the oil glut provided just the right opportunity to test the robustness of some of these policies. Despite the depreciation in the Naira's exchange rate, the prices of basic food items have remained steady. So for ordinary Nigerians, the dollar exchange rate of the Naira remains a distant construct if the prices of their everyday items remain unchanged.- Strong GDPs Can Carry Heavy Debt … Well, LiterarilyProf. Soludo acknowledges the well-known position that excessive concerns about debt-GDP ratio should not stop a bourgeoning economy from securing the loans that it needs, especially when the ratio is as low as Nigeria's (The empirically established safe Debt-GDP ratio is 60% but Germany, Japan, US and India maintain a debt-GDP ratio of above 76%,225%,101%, and 67% respectively). He is however concerned that Nigeria is a mono product economy that is vulnerable to oil price shocks with a questionable debt profile and the debt-GDP ratio. But he does not take into consideration that the contribution of oil to Nigeria's GDP has shrank and the non-oil contributors of Agriculture,Telecommunications and Entertainment are increasingly making bigger contributions to Nigeria's GDP. Even manufacturing is on the rise as evident from 2014 data. Perhaps Prof. Soludo deliberately opted to use outdated data in his analysis to score cheap points in his discrediting campaign. It is therefore pointless attending to his accusation that a government which is still in office has incurred 'abandoned capital projects littered all over the country' valued at $50Bn.- A See-through VeilKeen observers will see through Soludo's mischief despite his best efforts to hide his true intentions. For one thing, the 'strong' economic team under former President Obasanjo, which Soludo so praised in his article, had as its pioneer leader, the current sitting Minister of Finance and Coordinating Minister of the economy, Dr. Ngozi Okonjo-Iweala. And the debt pardon that was achieved under President Obasanjo was spearheaded by the same Dr Okonjo-Iweala. So Prof. Soludo's attempt to lecture the current team on the benefits of a 'strong' economic team and the significance of the debt pardon for Nigeria's future must come with some discomfiture to even his closest friends.Overall, the submission reveals Soludo as a man desperate to put out his word in the run up to the elections like many entities have done, including former President Obasanjo, MEND, and Boko Haram. He seems eager to remind us of his records in office, many of which we would rather forget. Or would one want to remember the shambles that government that Soludo was a part of left behind in the power sector after squandering $16Bn? Would one want to remember the tens of billions of dollars worth of abandoned projects, most of which had been funded, left behind by the Obasanjo administration of which Soludo was a key player? How can one quickly forget the mess that Soludo left behind in the banking sector which Sanusi had to deal with when he took over as CBN governor?- Look Everyone, it's Jacob!As CBN governor, Soludo connived with bank CEOs to milk the economy and render us vulnerable to the global recession. By the time Sanusi took over, a big chunk of the Foreign Reserve saved under the Obasanjo regime had to be deployed to safeguard our economy. And many banks, which had been making tens of billions of Naira in paper profits and with CEOs winning 'awards' and hobnobbing with Soludo, had to be taken over by the government to avoid a massive economic crisis. Is that the kind of record that anyone with any decency left in him and with an independent mind will like to remind us about? It could easily be the case that this article isn't coming from someone with an independent mind, but from someone prodded to put out something damaging by an old master who he owes a favour. And Soludo's far milder remarks against the opposition give away the possibility that the entire article was coerced out of him by an old master and written for the oppositions' benefit. We know who Prof. Soludo's old master who is also sympathetic to the opposition is, don't we?On Mon, Feb 2, 2015 at 11:01 AM, Samuel Zalanga <szalanga@bethel.edu> wrote:I just read it too. I agree with the assessment below. In any case, it is not a very good idea in my humble opinion to condemn a piece of work or information because of the person who produced it without using some systematic criteria to evaluate the worth of the work. From experience, I found out that one can learn a lot by even reading with someone who he or she disagrees with intellectually in many ways.For example, one of the reasons why Darwin's ideas became popular in spite of the resistance of the Church was that members of the Church refused then to read his work and then they dared to engage in a public debate with the supporters of Charles Darwin. The Church suffered serious embarrassment because the leaders did not read Darwin's work carefully and patiently in order to know exactly what he was saying and how to directly respond to it. It is an important lesson that even if we disagree with someone, we should still have the patience to study his or her ideas and decide their analytical utility based on some standard systematic and objective criteria..Nigeria is a difficult country to govern but Soludo's analysis makes me have some hope that if many Nigerians especially from the Diaspora will offer such dedicated service, it will make a huge difference in the country. I look forward to reading his book. I have already purchased Iwela's "Reforming the Unreformable."The article clearly shows that with good governance and dedicated service, Nigeria and indeed Africa will be far better.--On Mon, Feb 2, 2015 at 2:53 AM, Ademola O. Dasylva <dasylvaus@gmail.com> wrote:--My dear Broda Ikhide, I am not sure you read carefully or closely Soludo's submission. I know you for who you were; a man of understanding and integrity. Had you read it with patience, and not dismissive about it, you were not likely to retort the way you did. A critic and genuine patriot cannot afford to compromise such virtues as are characteristic of a truly analytical mind: (i) must be a good listener, (ii) possess the ability to verify most if not all, claims of opposing views in order to confirm or confute them, and (iii) treat every opinion dispassionately, and finally, (iv) possess the humility to accept or acknowledge a more superior and profound argument or submission.Pity, in recent times you have failed to demonstrate any of the golden virtues of a genuine critical analyst. And I begin to wonder what has come over you and my other friend, Toyin? Why would you allow yourself to be consumed, almost incurable, with a passion of hate and disdain to the degree that you deliberately stigmatize, in particular, those who do not belong to your school of weird thoughts and logic, but rather you insist on standing the truth on its head?Soludo's submission has revealed a lot: his great revolutionary contribution to the Banking system in Nigeria which the likes of Okonjo-Iweala and the Federal government tried hard and shamelessly to rubbish. Politics apart, such a man deserves our commendation not condemnation. Soludo's piece also reveals the professional weakness of Okonjo-Iweala, or rather I begin to suspect that she came on the World Bank's instance to encourage the destruction of Nigeria's economy and reduce the nation to a "mere dismembered giant of Africa"! Unfortunately the unserious Federal government operatives and the greedy political class took the bait. That is why we are where we are today! And all you Ikhide could see is a corrupt Soludo who must be dismissed for whatever he has to say rightly or wrongly. That kind of mind-set is apparently unacademic, and needs deliverance, or it will be overwhelmed with frustration and acute disillusionment. May God forbid.I think Soludo's essay is a must read for optimists who mean well for our dear nation, Nigeria!Ademola Omobewaji Dasylva
Sent from my BlackBerry 10 smartphone.
accuses her of forging national economics statisticsYea, look at Chukwuma Soludo, pen/armed robber of Central Bank living large abroad at Nigerians' expense, lecturing us and Ngozi Iweala from the warmth of stolen mansions. See Nigerian intellectuals applauding him. We deserve our misery!The myrmidons of our darkness now point fingers at each other!I say thieves have no credibility in my village. Soludo has nothing to tell me. He is part of the problem!Soludo, please shut the hell up. We are Nigerians, we may be timid but we are not idiots!
- Ikhide
On Feb 1, 2015, at 8:02 PM, 'Funmi Tofowomo Okelola' via USA Africa Dialogue Series <usaafricadialogue@googlegroups.com> wrote:--Soludo replies Okonjo-Iweala, accuses her of forging national economics statistics
Minister of Finance, Ngozi Okonjo-Iweala
A former Central Bank Governor, Charles Soludo, has reacted to the criticism of his earlier article by the Minister of Finance, Ngozi Okonjo-Iweala.
In a lengthy, over 6000 words article, Mr. Soludo on Sunday rejected claims by Mrs. Okonjo-Iweala that he performed poorly as governor of the Central Bank. He said his performance as CBN governor was unprecedented locally as well as globally acknowledged.
"In Nigeria's history, no governor of the Central Bank has delivered 24 consecutive months of single digit inflation as I did until the advent of the unprecedented global crisis in 2008," he said.
Mr. Soludo then challenged claims by Mrs. Okonjo-Iweala, who is also the Coordinating Minister of the Economy, that the Nigerian economy is doing well.
He accused Mrs. Okonjo-Iweala of running the country's economy aground.
"You are brilliant Madam, but you need serious help," he said while reeling our data to show the porous state of the Nigerian economy. "Having spent all your life in the World Bank bureaucracy largely in administration/operations, no one will blame you if your economics has become a bit rusty. There are firebrand Nigerians all over the world to draft to service. It is certainly embarrassing to Nigeria for you to be bothering World Bank economists to help you with most basic economic analysis."
He also accused her of forging Nigeria's national economics statistics.
Mr. Soludo said, "What worries me is that this government is the first in our history to attempt to manipulate our national statistics under Okonjo-Iweala. When NBS published the poverty figures in 2011, she felt indicted and incensed. She called upon the World Bank to come and examine the 'methodology' and get NBS to 'review' its numbers. Oby Ezekwesili (as VP Africa Region rejected the call to try to tamper with a country's statistics). Once Oby left, the 'World Bank' started talking about 'new figures', without conducting any new surveys.
"I was told about it by a World Bank economist, and I cautioned that it was a dangerous gamble that would damage the credibility of the NBS. If you want to 'review methodology', you conduct another survey but you can't change 'methodology' because you don't like the published figures. No government in our history has tried it: even Sani Abacha allowed a poverty survey that put poverty at 67% under his regime. At this rate, who will believe statistics coming from the Nigerian government again? Is it now the World Bank that sits in Washington and allocates poverty numbers to Nigeria? Something smells here!"
Read Mr. Soludo's full article below.
Ngozi Okonjo-Iweala and the Missing Trillions (1) Chukwuma Charles Soludo
I read some of the responses to my article, "Buhari vs Jonathan: Beyond the Election", and I want to thank everyone who has contributed to the debate. I am glad that the debate has finally taken off. I have decided, for the record, to re-enter the debate if only to set some records straight and hopefully elevate the debate further. Whom do I respond to? First, let me thank Gov Kayode Fayemi for his very mature and professional response on behalf of the APC. It forms a great basis for deepening the conversation. Pat Utomi, Oby Ezekwesili, Iyabo Obasanjo, and thousands of other patriotic Nigerians have raised the content of the debate. Femi Fani-Kayode made me laugh, as usual. The Gov. Jang faction of the Governors' Forum played the usual politics, although I know what most of them think privately. Who else? Oh, Peter Obi. Well, since he can't write and designated Valentine as usual to write for him (who never disputed the NBS statistics that Obi broke world record in the pauperization of Anambra people but instead focused on lies and abuses) I won't dignify him with a response here. His third class performance in Anambra will be the subject of a comprehensive article later.
Here, I will focus on Dr. Ngozi Okonjo-Iweala's response (as Minister of Finance and Coordinating Minister of the Economy—CME and hence on behalf of the Federal Government). Since I have known her, out of deep respect, I have never called her by her name: I call her Madam. I must state that I have great pains seeing myself on the opposite side of the table with Madam, in this way. I respect you, Madam, and will always do. If you read my article of September 2010 (before you became Minister), the tone and elucidation were as strong as the current one. It is my honest effort to ensure that our choice of leaders is based on rigorous scrutiny of what is on offer. Part of my frustration is that five years after, everything I warned about has come to happen and we are conducting our campaigns as if we are not in crisis. As a concerned Nigerian, I have a duty to speak out again. Regrettably, you have taken it very personal.
I am not bothered about the personal abuses: I actually expected worse. What name has the government not called President Obasanjo or any person who has dared to disagree with it of late? Anyone who disagrees with the government must either be 'insane' or have a 'character' deficiency or must be 'looking for a job' or 'without honour', or a 'charlatan'. Yesterday, Sanusi alleged that $20 billion was missing and he was accused of gross financial mismanagement, recklessness and poor governance to the point of being the first governor of central bank to be suspended from office. Today, he is the good one; and for daring to award an "F" grade for our economic performance, Soludo has become the 'worst' and 'without character' or perhaps 'looking for position' (Lol!). Some days ago, a former president was called 'a motor park tout' and 'un-statesmanly' just for disagreeing. This "how dare you criticise us" mind-set of the government is dangerous for our democracy.
In this Part One of my planned three part series, I will restrict it to the main issues you raised. I will not bother about the malicious attacks on my person. For me, it is nothing personal. In early 2011, I had a similar heated exchange with then Finance Minister Segun Aganga. But when the Nigerian economy was at stake and he invited me to a stakeholders meeting in his office (as Minister of Trade and Investment) to discuss Nigeria's response to the ruinous EU- Economic Partnership for Africa (EPA), I flew into Nigeria for that (at my expense)— the first and only time I have been to any government office to discuss policy since I left office. It is about Nigeria. I will, as expected, remind people like you of the salient aspects of my record of public service in response to your charge; challenge your claim to debt relief, and your reason for not saving; highlight your forgery of economic statistics and the lies in your response; but most importantly re-focus our attention to the historic mismanagement of our economy which you carefully avoided. I will show that while you are introducing austerity measures and soon to immiserate the citizens, our public finance is haemorrhaging to the point that estimated over N30 trillion is missing or stolen or unaccounted for, or simply mismanaged— under your watch! We can't go on like this, and I am convinced that an alternative future is possible. Can we have a public debate on this alternative future? The issues at stake are too grave to be trivialized through name calling. As I write, the naira exchange rate to the dollar is at N215 (from N158 a few months ago) and unless oil price recovers, this is just the beginning. For the sake of Nigeria, I won't keep quiet anymore!
Let me start with Madam's rather comical, wild judgment on my tenure of office which I believe to be totally false and baseless. I apologise upfront that in the process of making a 'personal defence', it is difficult to avoid a rather uncomfortable emphasis on "I". I did not want that but since Madam has dragged us this low, I have little choice but to do so in the next few paragraphs—just to keep the record straight!
In my view, there are three criteria for evaluating a public officer's stewardship: the evaluation by his employer; the satisfaction of the public he served; and the hard facts of performance. As I will show on these three counts, I am convinced that I left a world record of public service, and a thousand Okonjo-Iwealas cannot re-write that history. I served Nigeria under two presidents (Obasanjo and Yar'Adua) and as my immediate bosses, below are their written testimonials of my record.
Said President Obasanjo (December 2004):
"Charles Soludo is a true Nigerian. He is the sort of Nigerian that we all know we can rely on. Among his numerous virtues is COURAGE. I have found in him a man who can take tough and realistic decisions, stand his ground, educate others on the salience of his decision, and work very hard to ensure that the decision is efficiently and effectively implemented. His dedication to duty is first rate. His leadership qualities are admirable and his willingness to listen and learn is simply infectious. Professor Soludo has within a short time emerged as one of the leading lights of our nation. Not because he has a godfather but by sheer hard work, loyalty, dedication to duty, commitment to the nation, creativity, and undiluted association with the reform agenda…."
President Yar'Adua (May 2009) had the following to say about the Central Bank of Nigeria under my leadership:
"… the CBN has performed creditably well in delivering on its core mandates. This is especially even more so in the last five years. Most people would agree that without the successful banking consolidation and effective management of our foreign reserves, the current global crisis would have shaken the financial system and our national economy to their foundations with calamitous consequences".
In the President's special letter of commendation after the completion of my tenure of office, President Yar'Adua (June 2009) had the following to say to me:
"As your tenure as Governor of the Central Bank of Nigeria comes to a glorious end, I write on behalf of the Government and people of Nigeria to place on record our debt of gratitude to you for your dedicated service and uncommon sense of duty over the past five years. I am confident that your worthy antecedents in the CBN and in prior appointments in the service of our nation remain sources of inspiration to an entire generation. As I wish you even more astounding successes in the years ahead, it is my fervent hope that you will readily avail us of your distinguished service when the need arises in the future".
To the best of my knowledge, President Obasanjo has not changed those views even after ten years. The views of my two bosses, not the emotional outburst of an angry person desperate to get even, are what count.
How did Nigerians evaluate my public service? Unfortunately, we do not have scientific opinion polls on job approval ratings for individual public officers. But if the public opinions of individuals and organized groups (labour, employers, depositors, borrowers, stakeholders of the financial institutions, newspaper editorials, investors, etc) as expressed in thousands of newspaper/magazine clips during and after my tenure are anything to go by, then 82% of the public largely agree with the sentiments expressed by my two bosses. Your views belong to the other 18% which is okay, after all, no one is perfect. Five Nigerian newspapers and magazines simultaneously named us "man of the year" in one year— unprecedented in Nigeria's history. I do not talk about hundreds of awards and recognitions by various segments of our society (during and even after service) for "excellent public service". I was particularly touched by the historic award by the staff union of the Central Bank and the tears in the eyes of many as thousands of the staff gave me a standing ovation as I walked the aisle after my brief farewell speech.
Certainly, the international community (investors, bankers, scholars, donors, media, etc) took serious notice of the revolution in Nigeria's monetary and financial system. I am recipient of five international awards as global and African central bank governor of the year, not to mention dozens of other recognitions (even after leaving office). The London Financial Times described us as "a great reformer". Even as the global economic and financial crisis raged in 2008, the United Nations General Assembly appointed me to serve on the Commission of Experts to reform the international monetary and financial system. You don't appoint someone who has 'mismanaged' his national financial system to reform the global system. For 8 years until 2012, I served on the chief economist advisory council (CEAC) of the World Bank, and together with two Nobel Prize winners in economics and other experts we met periodically and advised two presidents and two chief economists of the World Bank, and in 2011, I served on the External Advisory Group of the IMF. Again, these are not positions for 'mis-managers'. Since I left office, I have been advising countries and central banks; and there is hardly any two months I don't consult/advise on banking/financial and monetary policy. I have given these illustrations to make the point that for every one Okonjo-Iweala's attempt to rewrite history, there are thousands who disagree.
Now, to some skeletal facts of our stewardship! I will be brief as I have a whole book to tell my story. As chief economic adviser, I had advised that our banking system could not support the private sector-led economy envisioned under NEEDS. When I assumed office at CBN, I inherited 89 rickety, mostly family banks (all of which put together were not up to the size of number four bank in South Africa). Many were insolvent, with depositors' money trapped, and 20 more about to collapse. To get a credit of $300 million probably required all the banks to syndicate it. For me, there was a national emergency. I drafted a 13-point reform agenda, discussed and agreed all the specifics with the President, and his VP; as well as my management team at the CBN, and we swung into action. President Obasanjo promised 100% support and actually delivered 1000%— which was decisive. I apologize to you Madam because I did not brief or inform you about it. We just wanted to keep it confidential given the sensitivity of the announcement. It is on record that you never supported it.
It was both a revolution and a war and most people thought it was "impossible", but thank God we succeeded. For the first time in Nigeria's history a policy of that magnitude was announced and deadline kept with precision. We were courageous to revoke the licenses of 14 banks, including those of my friends, in one day. The FT-Banker concluded that the scale, precision, and cost of the transformation were unprecedented in the world. Before then, Malaysia had the least cost of banking consolidation at 5% of Malaysian GDP. It did not cost Nigerian taxpayers one penny. Twenty-five new, stronger banks emerged but the powerful idea behind consolidation ignited something even more powerful—'the race to the top'. Banks raised more capital, and even banks like First Bank, Zenith, GTB, etc that did not merge with others went on capital raising several times. The consequence was higher levels of capitalization and within two years, 14 Nigerian banks were in the top 1000 banks in the world and two in the top 300 (no Nigerian bank was in the top 1000 before I came). Even after I left office, still 9 banks were in the top 1000. Our vision was to have a Nigerian bank in the top 100 banks within 10 years. As I see the new Access bank; Zenith, GTB, Fidelity, Diamond, UBA, FBN, FCMB, Skye, Stanbic IBTC, Union, Ecobank, etc, I cannot but feel that we have taken giant steps forward.
Deposits and credit soared (from barely N1.2 trillion to over N7 trillion); new technologies (ATM and e-banking) boomed, and banks had 57,000 new jobs; mega businesses emerged (ask any major operator in the Nigerian economy their experience with banking and credit before and after Soludo —the Dangotes, Arik, MM2, oil and gas operators; etc); capital market boomed and dominated by the banking sector. It was a new dawn for Nigerian private sector. I have heard Dangote twice say that he would not be near as big as he is today without the banking consolidation. Many other stakeholders still say it today. FDI and portfolio inflows flooded into Nigeria. The world celebrated, and one single transformative idea has changed the face of the private sector and economy forever. Banks became Nigeria's first transnational corporations with about 37 branches outside of Nigeria.
Nigeria survived the global crisis because of this, and it is the banking sector that has largely been powering the economic growth you claim (compare banks trillions of naira credit for investments in the productive sector with your government's miserable expenditure on critical infrastructure and investment; much of your borrowing – bonds – is from the banks). Your privatization of power sector, several PPP projects on infrastructure, etc, are now possible because of the mega banks. Today, Nigerian banks syndicate multi-billion dollar loans— unthinkable before. Madam, if the consolidation was 'mismanaged', there would not have been any bank to start with in the aftermath of the global crisis— as President Yar'adua correctly pointed out. Even you, during a recent presentation at the Banquet Hall in Abuja advertised consolidation as a historic achievement. How can you recognize a 'mis-managed' project as an outstanding achievement? As we say in Igbo, you can't cover the moon with your palms.
Let me be clear: the quantum size of the new banks following consolidation presented challenges of risk management and supervision. We deployed all we had and overworked the CBN staff. The carry-over of bad loans from the consolidated banks was quickly cleaned up. To the best of my knowledge, we instituted stringent regulatory and supervisory regime (consistent with best practices at the time). We even had resident examiners in the banks and required bank MDs to personally sign their reports to CBN. I recall that the former MD of GTB complained of "regulatory intrusiveness". To our credit, non-performing loans (NPL) came down from 22% in 2003 and 2004 to 6% as at 2008. Anywhere in the world, a central bank that brought NPL from 22% to 6% over a four year period does not look like one with a loose supervisory regime. Name other developing countries that performed better, Madam. So, on point of fact, Madam lied. Yours was a reckless assertion without basis by a Finance Minister.
The banks in Nigeria were supervised by the CBN and NDIC, but other institutions— international firms which audited them, international rating agencies which also examined their books, capital market operators since most were listed companies — all had oversight. I put on record that there was never any information/report of infractions by any bank which was brought to my attention and which we did not act upon decisively during my tenure. I heard the comment that some of the bank MDs were my friends. Well, my response is that perhaps as CME you should kill all your friends operating in the economy or become their enemies. For the record, my successor audited all the banks and none of my so-called friends was indicted. It speaks volumes. Indeed, it is also a fact that the alleged personal criminal infractions (including lapses in corporate governance Madam alluded to) by some bank CEOs were found out, only AFTER they had been removed from office. My successor told me that the comprehensive audit of the banks did not reveal such infractions. Of course, you must be God or have a special tip-off from inside to get to such information while the MDs are in office. Unfortunately, all over the world, no financial system has succeeded in routing out all criminal behaviours by the operators. So, Madam, I challenge you to provide one shred of evidence that 'there was no separation between regulators and regulated' or be honourable enough to retract your reckless statement.
What happened? The unanticipated and unprecedented crisis of 2008/09 hit the world. More than 40 US and European banks either collapsed or were shaken badly (remember the Lehman Brothers, Fannie Mae and Freddie Mac, Wachovia, HSBC, Lloyds TSB, Citibank, Goldman Sachs, even UBS, etc) and hundreds of billions of dollars were spent to bail them out. The contagion effects spread like a wild fire, destroying national stock markets and banks. The nascent (big) banks in Nigeria faced sudden multiple shocks— liquidity, exchange rate, oil price, capital market, etc. As oil prices collapsed, loans to oil and gas became non-performing overnight; loans to the capital market became non-performing overnight; etc. Our first priority was to save the entire banking system and the economy from systemic collapse. I assured Nigerians that no bank would be allowed to fail, and not many people know what it took to achieve it. Once we had navigated through the unexpected /unprecedented turbulence, we laid out a comprehensive plan to clean up the debris which we presented to stakeholders in Lagos (March 2009). I had pleaded with the Senate to pass the AMCON bill which we sent to them in 2004. But I had a comprehensive plan to finish the clean-up with or without AMCON by the end of 2009, including second round consolidation and a N500 billion fund (my book will detail all these). I left behind an 11-volume document of the Financial System Strategy 2020 (FSS2020) which has remained the policy roadmap for the CBN/financial sector since I left office.
I have two analogies for our experience. Ours was really like an airplane that was cruising and suddenly meets an unexpected and unprecedented turbulence. After the pilots and the crew succeed in navigating through the potential crash and probably land the airplane, people look in and start blaming the crew for the broken tea cups, chairs, and drinks that fell during the turbulence as evidence that the crew never kept the airplane clean or serviced it. My second analogy is that of a sudden earthquake in a region it was never expected and some houses collapsed. All of a sudden, the housing authority is to blame for not requiring earthquake-proof foundations for the houses. Well, my legal experts call it force majeure, an act of nature!
To be fair, after every crisis, there are lessons (and my book will detail what, with benefit of that experience, we should have done differently). Risk management— which has always been there— now took a new centre stage all over the world following the crisis. But for anyone to suggest that CBN under me, for one minute, took its eyes off the ball is, to say the least, ludicrous. The US financial system literally crippled the world costing America hundreds of billions of dollars but no one has suggested that Alan Greenspan is no longer the great maestro!
AMCON is a big topic (which I will address at a later date) but her claims show either ignorance or mischief. She claims that N5.7 trillion of AMCON funds was used to rescue banks and the 'bond issued' as 'cost to taxpayers'. Really? I will deal with the AMCON I envisaged and the AMCON under you later but let me state that even if 100% of the banks' NPL was offloaded on AMCON, it would not be up to N5.7 trillion. Enough said for now. The fact is that the Federal Government has not put a penny in the AMCON fund: the banking system is financing itself, and together with the sinking fund by banks, AMCON surely can't default (thanks to consolidation that the banks are now big enough to cough out such funds to solve the system's problem). Did you intend to deceive the readers by refusing to tell them that much of the AMCON fund is 'investment' and not 'expense'. Am sure you heard the IMF's alarm about moral hazard? If you want, we can have a focused debate on AMCON.
Next, let me briefly respond to a few outlandish claims. She brags about 'single-digit' inflation rate 'now' and alleges that when I left office, inflation was above 13%. I just laughed at this one. In Nigeria's history, no governor of the Central Bank has delivered 24 consecutive months of single digit inflation as I did until the advent of the unprecedented global crisis in 2008. It was not for nothing that the world cheered us as monetary policy czar, Madam! Perhaps you are also not aware that we broke a world record by having a depreciated real effective exchange rate during a time of export boom and this was at the heart of our reserve accumulation and the portfolio/FDI inflows. I resisted the IMF advice to deplete reserves for liquidity management, and Nigeria had enough self-insurance to survive the global crisis. The opposite has happened under you Madam, and the Nigerian economy is in trouble. Naira exchange rate appreciated under me from N133 to N117 before the global crisis; and reserves grew to all time high of $62 billion. For the first time since 1986, the official, interbank and parallel market exchange rates converged under me. You can't match these records!
I hereby challenge your attempt to blame others for not saving for the rainy day. It is not a virtue when you are quick to appropriate all the credit when things are going well, but shift the blame when they go wrong. You blame the state governors— who, according to you, have taken the Federal Government to the Supreme Court—not that a Supreme Court judgment forced your hands. For your information, the governors have never agreed to savings and always threatened court action even under Obasanjo. Why did we save under Obasanjo but not under Jonathan? Two keywords explain it: leadership and integrity. Governor Amaechi said the governors insisted on sharing the funds because they found out that you were illegally fiddling with the savings. So, as Nigerians still wonder, if billions of dollars are now 'missing' under your nose, why should governors trust you to keep their money? Do the states that have taken the federal government to the Supreme Court and refused to save also include the PDP governors—who are in the majority? If so, then it is fatal: even governors of your own party, PDP, do not trust you to keep their money! Furthermore, did the governors also stop the Federal Government from saving part of its share? If you ran a surplus budget at the Federal level, you would have had credibility to blame others or to say they did not listen to your advice. The key point is that since you were running huge deficits yourself, it was also in your own interest to share the ECA. You did not show leadership or credibility, full stop!
Next, Madam, I was really embarrassed for you to read that one of the reasons for declining forex reserves is 'oil theft'. Under you as Minister of Finance and coordinator of the economy, the basket of our national treasury is leaking profusely from all sides. Just a few illustrations! First, you admit that 'oil theft' has reduced oil output from the average 2.3 – 2.4 million barrels per day (mpd) to 1.95mpd (meaning that at least 350,000 to 450,000 barrels per day are being 'stolen'. On the average of 400,000 per day and the oil prices over the past four years, it comes to about $60 billion 'stolen' in just four years. In today's exchange rate, that is about N12.6 trillion. This is at a time of cessation of crisis in the Niger Delta and amnesty programme. Can you tell Nigerians how much the amnesty programme costs, and also the annual cost for 'protecting' the pipelines and security of oil wells? And the 'thieves' are spirits? Come on, Madam!
Second, my earlier article stated that the minimum forex reserves should have been at least $90 billion by now and you did not challenge it. Rather it is about $30 billion, meaning that gross mismanagement has denied the country some $60 billion or another N12.6 trillion.
Now add the 'missing' $20 billion from the NNPC. You promised a forensic audit report 'soon', and more than a year later the Report itself is still 'missing'. This is over N4 trillion, and we don't know how much more has 'missed' since Sanusi cried out. How many trillions of naira were paid for oil subsidy (unappropriated?). How many trillions (in actual fact) have been 'lost' through customs duty waivers over the last four years? As coordinator of the economy, can you tell Nigerians why the price of automotive gas oil (AGO), popularly called diesel, has still not come down despite the crash in global crude oil prices, and how much is being appropriated by friends in the process? Be honest: do you really know (as coordinator and minister of finance) how many trillions of Naira, self- financing government agencies earn and spend? I have a long list but let me wait for now. I do not want to talk about other 'black pots' that impinge on national security. My estimate, Madam, is that probably more than N30 trillion has either been stolen or lost or unaccounted for or simply mismanaged under your watchful eyes in the past four years. Since you claim to be in charge, Nigerians are right to ask you to account. Think about what this amount could mean for the 112 million poor Nigerians or for our schools, hospitals, roads, etc. Soon, you will start asking the citizens to pay this or that tax, while some faceless "thieves" were pocketing over $40 million per day from oil alone.
You alluded to debt relief in your response and tried to take credit. Well, your CV is honest enough to admit that your two achievements in office as Finance minister under Obasanjo were that "you led the Nigerian team that struck a deal with the Paris Club" and that you "introduced the practice of publishing each state's monthly financial allocation in the newspapers". You are right about the two achievements. Let me put on record that Nigeria would have secured debt relief under anyone as Minister of Finance. President Obasanjo secured debt relief for Nigeria. Much of his first term was used to get Nigeria back into the international community and to campaign for debt relief. Before you were sworn in as Minister of Finance, President Bush visited Nigeria and both of us accompanied President Obasanjo during the meeting. There, Mr. Bush promised to support Nigeria with debt relief and asked our president to ensure that he met the conditions of the Paris Club. Obasanjo mobilized the global political support and coordinated all of us to ensure that the government met the check-list of 'conditionalities' as required. I spent five weeks in the hotel with my team (as coordinator/chairman for drafting the National Economic Empowerment and Development Strategy, NEEDS).
Some of the reform targets in NEEDS became the 'conditionalities' Nigeria was required to fulfil to merit debt relief. You and I signed the various MoU with the IMF on behalf of Nigeria (the policy support instrument). We had a great team at work and each member of the economic team had specific aspects of the conditionalities to deliver: Bode Agusto was in-charge of the budget; Oby Ezekwesili held sway at Bureau of Public Procurement and later Minister of Solid Mineral, and Education (but specifically tasked with delivering on EITI and procurement reforms); Nuhu Ribadu was at the EFCC fighting corruption; I was at the Central Bank delivering on monetary policy and banking reforms; Steve Oronsaye worked hard to delist Nigeria from the FATF; Nenadi Usman was in-charge of the parastatals; El-Rufai held forth at FCT and in charge of public sector reforms; privatization programme went on, etc. Did you know that the IMF wrote President Obasanjo threatening that there would be no debt relief if the CBN did not meet some monetary targets, and do you know the magic we performed to meet them? Can you tell Nigerians which of the 'conditionalities' that you personally implemented? With the groundswell of political support and Nigeria meeting all the 'conditionalities', debt relief was assured.
Your major role as stated in your CV was to lead the team to negotiate the specific terms of the relief, having fulfilled the conditions. I still believe that Nigeria should have gotten far better terms than you negotiated. Of course, with your eyes on returning to the World Bank after office, I did not expect you to boldly stand up to the donor community in defence of Nigeria. Was there a conflict of interest on your part?
By the way, can you tell Nigerians why you were eased out as Finance Minister and you cried like a baby begging OBJ to still allow you remain in the Economic Management team—- barely few weeks after the debt relief? Why were you eventually also removed from the economic management team if you were so important? Ironically, President Jonathan has recycled you, with a bigger title and greater responsibilities. But the difference is that the team that did the actual work is no longer there, and the world has seen that the king is naked.
You are brilliant Madam, but you need serious help. Having spent all your life in the World Bank bureaucracy largely in administration/operations, no one will blame you if your economics has become a bit rusty. There are firebrand Nigerians all over the world to draft to service. It is certainly embarrassing to Nigeria for you to be bothering World Bank economists to help you with most basic economic analysis.
Your response on the poverty issue is deeply troubling. You accuse me of using "2011 statistics on poverty by the NBS to support his argument, while ignoring more recent figures". At least you did not refute the NBS figure as valid. In the next sentence, Madam went ahead to note that "as stated in the Nigeria Economic Report 2014 by the World Bank, poverty in Nigeria has dropped from 35.2 percent of population in 2010/2011 to 33.1 percent in 2012/2013". Did you notice that you have quoted two figures for poverty for the same year as being equally correct? So, for 2011, was poverty 71% (according to NBS) or 35% according to the World Bank? To the best of my knowledge, the last published household survey by NBS was in 2011. The World Bank does not conduct household surveys in member states to determine poverty incidence. So, when and by whom was the survey that gave the World Bank figures?
What worries me is that this government is the first in our history to attempt to manipulate our national statistics under Okonjo-Iweala. When NBS published the poverty figures in 2011, she felt indicted and incensed. She called upon the World Bank to come and examine the 'methodology' and get NBS to 'review' its numbers. Oby Ezekwesili (as VP Africa Region rejected the call to try to tamper with a country's statistics). Once Oby left, the 'World Bank' started talking about 'new figures', without conducting any new surveys. I was told about it by a World Bank economist, and I cautioned that it was a dangerous gamble that would damage the credibility of the NBS. If you want to 'review methodology', you conduct another survey but you can't change 'methodology' because you don't like the published figures. No government in our history has tried it: even Sani Abacha allowed a poverty survey that put poverty at 67% under his regime. At this rate, who will believe statistics coming from the Nigerian government again? Is it now the World Bank that sits in Washington and allocates poverty numbers to Nigeria? Something smells here!
Madam alleges that the NBS—as a parastatal under the National Planning Commission (under me) departed from the 'international standard method of poverty measurement'. How and when, Madam? I was in office at National Planning for 11 months from July 2003 to May 2004. A poverty survey was conducted in 2004 and the results computed and published in 2005/2006— more than a year after I had gone to the Central Bank. Or perhaps, it was a clever way to divert attention from your manipulation of published economic statistics. The NBS published its poverty data in 2006 when you were Minister of Finance, and you did not question the 'methodology' because the figures looked good. In 2011, the poverty numbers (using the same methodology as in 2005/2006) indicted the government and suddenly, the 'methodology' is wrong. Interesting times!
Now that you decide which economic statistics published by NBS to accept and which ones to 'change the methodology' to give favourable figures, you can keep feeding your manipulated figures to your international media circus for the vain glorious awards to sustain an empty hype, while Nigerians groan under hardship. We can actually ask Nigerians whether they are getting better off now contrary to your bogus figures.
Many of Madam's responses were comical, but this one is classic. According to her, the chief economic adviser and NBS "worked hard to determine how many jobs we need to create in a year", and went on to ask, "why didn't Soludo do this when he was CEA?" (Lol!). Madam, any good economist needs less than 10 minutes to compute this figure, not the (months? of) 'hard work' by your team. My calculation is that the number of jobs Nigeria needs to create each year to significantly reduce unemployment rate to sustainable levels in the next few years is at least 3 million, and not the 1.8 million by your team. We are talking about the Nigerian economy, please.
Your magic wand for mass housing is the Mortgage Refinance Corporation with 23,000 mortgage offers—for a country with 17 million housing deficit! Then, there is the pedestrian proposal of a new development bank— financed with loans from the World Bank, etc? A World Bank loan to set up another 'development bank' where we already have Bank of Industry, Bank of Agriculture, NEXIM, Federal Mortgage Bank, etc? People have totally run out of ideas and can't see anything for Nigeria without through the prism of the World Bank. I will offer you free consultancy on how to set up a development bank without a World Bank loan but we don't need another one now. I actually gave President Yar'adua a two page note for a N3 trillion development fund then, and if we plug your leaking pipes, it could actually be a N10 trillion Fund. I envisioned and set up the Africa Finance Corporation (AFC)—Africa's premier infrastructure bank!
Frankly, I don't understand why you seem highly troubled that the Soludo you thought had "disappeared from the political space" seems to be still around. Well, let me assure you that I will only 'disappear' in God's own time. I gave credit to two past presidents who laid the foundation of the market economy we operate today. You did not contest or contradict any of my points. Rather, what you see is that Soludo must be 'looking for a position'. Pity! If I am looking for a position, I would be running around one of the candidates now just as you are busy dancing Atilogwu dance at TAN and PDP rallies, struggling to keep your job. How Yar'adua drafted me to contest for governor in Anambra and APGA leadership as well and how I was "stopped" on both occasions are in the public domain. But I am not deterred for one minute. Chinua Achebe said that on leadership, Nigeria is a country that goes for a football match with its 10th Eleven. I am proud and happy to have offered to serve my people, and for the service of Nigeria, I will do it again and again. How many times did Abraham Lincoln, Obama, Reagan, etc contest before they got there? I actually encourage everyone who believes he/she has something to offer to get involved or stop complaining. I am happy seeing the increasing critical mass of professionals (like you) now getting involved. It is good for Nigeria!
What is at stake is the survival and prosperity of Nigeria. Next elections are critical, and for me the key is the ECONOMY. We must offer Nigerians clarity on the choices before them. Can I propose a three-way debate with you (representing PDP/Federal Government), nominee of APC (Utomi or Fayemi? or any other), and myself (as independent citizen— I don't belong to any of the two). Let us have two bouts of debate between now and 12th February, 2015 focusing on: CBN/AMCON and the financial system (if you want); our economy and its outlook, and agenda/alternative paths to sustainable prosperity post elections. Choose the dates and times, and for the sake of Nigeria, I will fly in. You can invite any of your international media friends as moderators. I feel the pain of the 180 million Nigerians whose tomorrow you have carelessly rendered bleak, and when I think of what the missing trillions could do for them, it becomes extremely urgent that we all must deepen the debate. Eagerly waiting for your response, please!
Chukwuma Charles Soludo is a former Governor of the Central Bank of Nigeria
You can also read the article on our opinion blog here
Here's link to Mr. Soludo's first article: Buhari vs Jonathan: Beyond The Election, By Chukwuma Charles Soludo
And here is the link to Mrs. Okonjo-Iweala's response to Mr. Soludo's first salvo: Beyond Belief: Soludo's Article on Economic Management Deficit in Facts,
Funmi Tofowomo Okelola
-In the absence of greatness, mediocrity thrives.
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Samuel Zalanga
Department of Anthropology, Sociology & Reconciliation Studies
Bethel University, 3900 Bethel Drive #24
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--Samuel Zalanga
Department of Anthropology, Sociology & Reconciliation Studies
Bethel University, 3900 Bethel Drive #24
Saint Paul, MN 55112.
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Department of Anthropology, Sociology & Reconciliation Studies
Bethel University, 3900 Bethel Drive #24
Saint Paul, MN 55112.
Office Phone: 651-638-6023
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