Chukwuma Soludo: Serving a diet of half truths, outright lies and self serving propaganda
- 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.
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
Saint Paul, MN 55112.
Office Phone: 651-638-6023--
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