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.

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.

Jimoh Ibrahim barred from meeting Yar’Adua

Despite the seeming success of Barrister Jimoh Ibrahim, the Group Managing Director of NICON Insurance Plc, he seem to be having challenges breaking the barrier of easy access to relate with the President, Alhaji Umar Yar’Adua.

This became evident during the inauguration of the new Ghanaian President in Accra, Ghana.

Ibrahim was not privileged like Femi Otedola and Aliko Dangote who were part of the presidential entourage aboard the presidential jet. He arrived Ghana via a commercial flight.

While Yar’Adua was meeting with Musiliu Obanikoro and another diplomat in the Presidential lounge at the airport, Barr. Jimoh Ibrahim made frantic efforts to meet with him but the President’s aides would not permit the unscheduled meeting.

While Ibrahim was trying to persuade the aide, President Yar’Adua and his team decided to move. Ibrahim and others were courteously shoved to pave way for the President.

It is believed that Barr. Jimoh Ibrahim made the Ghana trip after efforts to connect the President in Abuja failed.

DANGOTE, YAR’ADUA FALL APART OVER ECONOMIC EMPOWERMENT…MOVES TO ATIKU’s CAMP

The chummy relationship between Nigeria’s President, Umar Musa Yar’Adua and businessman, Alhaji Aliko Dangote may have hit the rocks, a source has said.

The source confided that though the President appreciates the support Dangote provided him while running for the office of the nation’s presidency but differences in matters relating to economic empowerment of Nigerians may have turned the president against the businessman profiled by American based Forbes Magazine to be the richest man in Nigeria in 2007.

“You know the president is a socialist by orientation, and I can tell you that despite the complains of some people that the president is not moving at a fast pace to provide the dividends of democracy to Nigerians, the president, in fact, has been doing battle with some of his friends in industry and business circle to make the provision of basic needs of existence affordable for Nigerians.” The source revealed.

“I think it is on this point that the president and Dangote departed. The President wants Dangote to use his influence to do things that will impact the lives of Nigerians but I think Dangote’s business considerations did not conform to the president’s vision.”

Other sources in the political circuit confided that as a result of this fall out with the president, Dangote might have moved camp to the side of former vice president Atiku Abubakar.

“It’s like taking a strategic position for 2011 which for politicians is around the corner. Since Dangote lost favour with the President he has moved his support to Atiku, the thinking in political circle is that Atiku is going to run again in 2011 and since for top level business people influential links and connection to government is an important factor in their business survival, Dangote may have opted to back Atiku for 2011, at least, to be able to find his way back into the corridor of power.”

All efforts made to speak with Dangote’s spoke person were not successful.