Who is Soludo?

Soludo -no solution

In the post of February 2, 2009 by Fortune&Class magazine titled Yar’Adua under pressure to renew Soludo’s tenure as CBN’s governor, Prof. Chukwuma Soludo claimed that Nigerian economy was not in any way impacted by the world global economic crisis, the statement he had long denied.

Again, as our naira began its decline in December 2008, the CBN Governor made comments that ‘the devaluation was caused by currency speculations by some individuals and certain banks in the country.’

The Governor noted that, “the CBN was aware of the individuals responsible for the devaluation and the CBN will do all in their power to ascertain the speculators are punished”. However, several weeks later the CBN made an official statement that they are responsible for the devaluation of the currency. Again, this was denied too.

Now, it is beginning to look like the CBN does not really have a clue about the problems confronting the Nation. First Nigeria was not impacted, and then later Nigeria was impacted. Then speculators were responsible for the currency devaluation, later the CBN was intentionally letting the currency fall.

And for a man who is not sure of his standings, what sense is there in shifting blames by claiming that, “With the Obama government proposing to invest heavily on alternative energy sources, there is a permanent threat to oil as mainstay of the Nigerian economy. Unless we take urgent steps to address the situation by also finding an alternative to oil as the mainstay of our economy, we might be back to the similar crisis we witnessed in 1982 when the price of oil crashed, government revenue declined and it became difficult for government at all levels to pay salaries. There was also the abandoned projects syndrome, increased import of almost anything until government was forced to place a ban on foreign currency trafficking because it was being abused.”

Must the nation always depend of oil revenue for its GDP growth? What policies is he making in his on position as the nation’s apex bank governor in ensuring economic stabilities in the areas of agriculture? Has he forgotten the effect of policy somersaults on the masses? What actually are his achievements in the area of micro-finance banks, interest rates. Yet also to be forgiven is the politics he played in the uniform year ends for the financial industry? It is a pity what our leaders are turning us into. With this kind of comments, the African nations in general are being portrayed as beggars. But we are not.

Such missteps do not send good signals to Nigerians and foreign investors because what these pronouncements and subsequent contradictions show is that either the CBN does not understand the economic problems confronting the nation or they have intentionally decided to confuse or misrepresent the facts to the nation. These types of inconsistencies will eventually result in a great loss of confidence, because what it indicates is that if the CBN is unable to determine what the problems of the economy are, a solution may not be forthcoming or formulated to fix it.

A popular maxim says a person tries his whole life to rebuild a day tarnished reputation. No matter what, the history has been re-written of Prof. Chukwuma Soludo as the most confusing governor of the central bank of the Federal Republic of Nigeria. And that is who Soludo is, a man without solution.

Story by Dman John.

SEE NO EVIL, HEAR NO EVIL

Government is no doubt the biggest business in Nigeria, so it is in countries around the world. Exception is that in more economically developed lands, especially those that are inclined to the capitalist economic model, rather than government to directly engage in the economic arena, they provide an environment where individuals play the economy in pursuit of personal benefit for the good of society in accord with the policies and philosophy of government.

The Nigerian situation won’t pass the test of a capitalist model, what with the confusion that defines government roles in the productive and service sectors that had left public utilities in vicious spasm of a slow death.

The failure of the Nigerian government in business and provision of society’s essentials like potable water and electricity power is no longer controvertible, Nigerians have generally given up on their expectations from government in this regard, it is, however, troubling that government and its agencies now garb economic policy positions and thrusts with odious subterfuge and double speak.

Moments after, the economies of the United States of America and the United Kingdom went into a tailspin, even the most economically ignorant was able to conjecture that the global economy was on its way to a storm which consequences may surpass the storied damnation of the Great Depression that commenced in 1929. But officials of Nigerian government would rather see no evil, hear no evil. The two finance ministers and the Governor of the Central Bank of Nigeria assured that the country was immune to the vagaries of the devastation that had begun to shake the economic foundations of the United States, United Kingdom, Europe and Asia.

Yet, signs of malevolent economic change were becoming obvious. Price of crude oil, the nation’s mainstay natural resource suddenly took a dive southward from high in the $150 per barrel of crude oil to $44. Reason for this is obvious, one needs not be a Keynesian to rationalize that developed economies that are the major consumers of crude oil disciplined their appetite for crude oil which in turn reduced the pressure on the demand with attendant fall in price. For Nigeria the implication is grievous, reduced revenue collection, cut down in GDP growth projection, a cascading fall in value of the naira, the national currency, the direct deployment of the $58.11 billion foreign reserve as intervention to save an imperiled economy. And eventually, a life of further distress for the average Nigerian. You don’t need to be a professor of economics to anticipate this turn in the economic sphere.

Already, the scenarios are playing out, the national budget for 2009 is a deficit budget due to anticipated reduction in revenue, three weeks ago, the Naira took a hiding from speculators and others when it lost more than ten per cent of its value to the Dollar in three days; just as there are discomfiting indications of distresses in financial institutions.

The CBN, after its Monetary Policy Committee meeting announced it was going to intervene directly in the daily two way quote foreign exchange market with fund from the nation’s foreign reserve.

Apparently, government and its agencies lack economic anticipatory skill. Soon after the first sign of trouble in the west emerged, a more focused government and its agencies would have cobbled a fiscal and monetary policy position targeted at the eventual impact of the roiling global economic scene on the country.

It is not too late, rather than the piece meal attention to specific worrisome spectre of economic emergency, it is better for the CBN, finance ministry and whoever, to evolve policies and measures with strong anticipatory ingredient to address likely troublesome financial and economic scenarios that may impact the country in the next 12 months.

As it is, we lost the opportunity to seize the initiative of building a bulwark against the negative consequences of the global economic downturn by acting the ostrich with its head in the sand even as trouble raged.

Certainly, responsible and responsive countries around the world are girding their loins in anticipation of a long tenor of battling with the economic crises. For Nigeria, the consequences of the global economic troubles are yet to fully manifest in the country, it would, indeed, be a matter of common sense to put together measures and policies that can help stave the negatives of the eventual infiltration of the global economic crises. This is a better option than to continue to beat the chest in the assurance of the community enjoying certain immunity from the global crises.

We all know that Nigeria is not exactly blessed with enduring economic structures and initiatives that have the capabilities to self correct in the face of a crisis that slowly but inevitably heads toward the country.