Soludo: his brilliance and delusion

By Jonah Etufunwa

Prof. Chukwuma Soludo

I am an ardent lover of Soludo, but I have so many bottled up reasons to disagree with him for the first time this week. I also have much respect for him, for no one has a better curricula vitae than him for the position he occupies today in Nigeria.

Born brilliant, strode brilliant and appointed Governor of Nigeria’s Central Bank based on his brilliance. I stand to be corrected of this view.

It is interesting to know that Soludo is really mortal and prone to the misdeeds of lesser mortals! Governor of the Central Bank of Nigeria (CBN), for his academic and professorial brilliance, remains an academic colossus on mind. Nothing else! Legends have it that he never for once took second at school. He took first all the time and ended up with Grade One in his School Certificate Examination and First Class in his degree course.

We learnt he also came tops in his master’s. He always topped his class and department at any given time. A genius indeed! There was not better admiration for this enigma than his exceptional academic and professional intelligence. Everyone was dazzled by his brilliance and he started brilliantly as his Governor of Nigeria’s CBN.

From nowhere, at least, not imagined by his contemporary mortals, he conceived a novelty: Consolidation of the banking sector. He was applauded and supported by the President of Nigeria and Nigerians in general. Nothing could stop him from being perceived as a genius. And he strode the landscape as one. He really deserved it. There was no aorta of doubt on the minds of Nigerians, that the CBN Governor was not a mere mortal.

He was perceived as head and shoulder taller than all Nigerians in economic intelligence, especially in money matters. Though, not given to hero worship, I preserved a portion of my heart for honouring him alone as an extra-ordinary human, especially in my thoughts about him. He was actually great in cerebral matters. I joined others in seeing him as a financial saviour. Sometimes we delude ourselves with our thoughts, hidden from our close associates. Nothing would have stopped me from hero-worshipping Soludo, if not for my religious training. I know that nobody is perfect. We all make mistakes and Soludo would not be different from this nature of man. I am not deliberately looking for ways to denigrate the ‘wisest’ man in our midst. I simply took him for what he stands for – extra-ordinary cerebral gift to Nigeria!

My first disappointment with him was when he allowed himself to be deluded by the former president Obasanjo over the printing of coins. Before they printed those coins, I personally knew that the coins would become artifacts immediately. I knew that denominations alone, as legal tenders, would not help us control inflation. Soludo would have thought the way I thought but too much acada intelligence was making him mad. He was living by ‘book,’ that was why he created coins that could help us to have such prices as 10kobo, 50kobo and one naira denominations that could not buy anything. And yet Obasanjo and Soludo went ahead to print and distribute legal tender metals that were utterly useless and only useful for decorating our ‘centre tables.’ I knew the coins would become so even before they were printed. I could not understand why both the President and the CBN Governor could not see what I saw as a lay economist. Obasanjo was busy making life difficult for ordinary Nigerians through multiple taxations and principally by increasing the prices of Federal Government’s products, such as PHCN bills and petrol products. Prices of such things cannot be increased without other products being affected on the upward side. Such prices daily affect cost of production and yet the President and the Governor of Money (Soludo) wanted magically different from what they sowed. You cannot be fuelling inflation and at the same time dousing it. They sowed whirlwind and expected to reap peace. They wanted inflation controlled without any input from their own end. How impossible!

Another laughable policy that Soludo did not succeed implementing was the case of N20 being the highest denomination in our cash economy. With the aforementioned state of inflation, just imagine how that could only have scratched rather than solving or checkmating inflation. I just knew it could never work. May be, we would having been paying more money to transport our currency for buying things than the prices of the products themselves. What the economy needs are just three activities: One, production; two, production; three, production. ‘Africa Must Produce!’ one editor wrote some time ago in one of the dailies. Nigeria Must Produce! Productive activities would solve our economic problems, not economic theories. Economics, no doubt, is a real science, and only scientific measures can solve our problems, no just acada approaches. For example, no rhetoric can solve our bearish capital market, but once the scientific or economic forces involved are right, our woes would be past. Same solution is what our forex market needs.

I do not need to be an economist to know that the U.S.’ financial recklessness of their economy would eventually affect Nigeria. When Soludo insisted that we were insulated, I knew he was lying deliberately or he wickedly ignored the facts on the ground just to delude or soothe us. I knew he was also deluding himself. I began to doubt his professorial wisdom and acada stardom. I became afraid of the unavoidable disgrace that would soon confront him since our economy was almost dollar dependent; not only ours, but the entire world’s.

If you love somebody, you would not want evil to befall him. I did not want shame to come Soludo’s way; I didn’t have to be an economist before knowing that he was not correct. I began to doubt the practical usefulness of his unquestionable brilliance. Knowledge is wisdom in the brain (mental wisdom) but it becomes real knowledge when applied to solving problems successfully. Soludo’s acada knowledge has no benefit for us in small things, but only in one big thing – bank capitalization – that has now left our banks near empty after bloating. As a member of the country’s economic management team, I expected Soludo to be shouting that the banks were not doing the right by not financing the real sector. He did not also warn Nigeria for spending excess crude oil revenue on wasteful things, anything outside the real sector is practically wasteful. Income equals consumption plus savings. We concentrated on consumption instead of savings, which ultimately means investment. I hope Soludo would not end up an all-rounder disappointment on our financial landscape.

Finally, I share the fears of many that saving the naira is not what can bring a lasting solution to our forex problem, but still those three things: Producing, producing and producing and diversifying our earning power of foreign exchange. Think about agriculture. It would help us save money on our international food bill, feed our agro-allied industry and earn us income through exports. Someone even suggested that spending on infrastructure rehabilitation would create employment and since Nigeria does not have money for that now, then public private partnership scheme would be the answer; and it can be a catalyst. We would not depend on crude oil alone. With oil alone, it is like we are unemployed as a nation.

It is just like an unemployed man who has little savings that may ordinarily last for many weeks if spent on his daily needs and he only sees solution of his inadequacies in spending his savings to buy what he needs NOW. I think what this man needs are two: gainful employment or gainful investment and not just meeting up his present needs by blasting off his savings. Soludo’s forex solution is too simplistic and lacking true wisdom. If the 20 billion dollars are spent on forex to shore up the value of the naira, how long would we shore the naira up? Who would eventually benefit? Of course, the exporters of what we are using the forex to pay for. The exporters would produce more and employ more of their citizens and raw material producers for their export (product).

If we want to banish poverty, we must never depend on oil alone. This is not Soludo’s department, though, he should tell his master, Yar’Adua and Nigerians the truth about what should and should not be implemented.

Our only source for financing our national budget is through sale of crude oil. The income is calculated in dollars. The world’s industrial activities are experiencing a depression. The demand for oil has fallen, can we now be expecting our income from oil to remain okay? Brilliance or no brilliance cannot change our fortune unless we think about other things to sell in order to get dollars or pounds or other international currencies for financing our budget. Our budget implementation is import dependent; because we are a consuming nation. We may still be importing toothpick and handkerchiefs. Bicycle spoke is not produced here. Producing spokes would depend of iron and steel technology and availability of energy (electricity) which we do not have. Fundamentally, all we need is production, but we lack the foundation, the platform. We can only start by building from the foundation. Soludo as a brilliant should have been bemoaning all that we lack fundamentally, that are hampering his ability to control inflation and contribute to the growth of the economy.

Soludo is a man I admire so much for his grey matter, can someone help us know why he has not been telling us the truth, because I still believe he knows the truth. If he does not, I think we need to know why.

My thoughts about Soludo are even driving me nuts. Someone, please, help us to find why the genius professor of economics does not know and do simple things that are true of scientific ECONOMICS.