By Dele Sobowale
I got some intelligence from my comrades in the system and we found out that the CBN under Soludo had just allocated COUPLE OF MILLIONS OF DOLLARS to two, as they were called, new generation banks shortly before the naira was devalued
—Adams Oshiomhole, in Lagos, March 10, 2017.
I want to say for the record that Adams Oshiomhole has lied —Professor Charles Soludo, same venue, same day.
IT is always a great spectacle when two elephants fight. Even professional economists and financial experts love to watch a brawl once in a while. Friday, March 10, 2017, at the Civic Centre, at OzumbaMbadiwe Road, Victoria Island, was the venue, the inadvertent promoter was VANGUARD NEWSPAPERS and the pugilists were well-matched in every respect.
It was an unintended battle of two “ex-this and ex-that’s” (courtesy Ukpabi Asika) – who are probably eager to squeeze into Buhari’s line-up of current holders of power. Was it not the Athenian statesman, Critias, c404 BC, who had revealed to us that “It is quite impossible for those who want to gain power to avoid getting rid of those people who are most likely to form opposition”? The two, having tasted power, like David Copperfield, want more.
In many respects, the face-off was not for the benefit of the participants at the event. It was probably aimed at a man who had just returned from London after a prolonged “vacation”. He has vacancies to fill and some people would do anything to grab one of those posts. But, they need to be told a secret. Some of those on the inside are already regretting taking the assignments. They just don’t know how to get out. Now let us return to the contestants.
In one corner was Adams Oshiomhole, ex-Labor leader and ex-Governor; in the other corner was Professor Charles Soludo, ex-Chief Economic Adviser, CEA, to President Obasanjo and ex-Governor of the Central bank of Nigeria, CBN. Apart from the two ex’s each claims to his credit, they both have one similarity – they both possess two of the sharpest tongues in the entire Solar system – tongues that can slice a person to ribbons in less time than it would take Usein Bolt to complete the 100 metre dash. So, in that respect, it was a fair contest. Perhaps, the only dissimilarity a close observer of the two can point to is the style of delivery of the blow. Oshiomhole is a brawler, a Foreman type of fighter. Soludo is like Muhammad Ali, a stylish boxer, who moves like a butterfly and stings like a bee. The two styles were on display on that Friday. Nobody present will ever forget it.
Soludo had been invited to deliver a keynote address about “How To Rescue Nigeria”. As a former participant at the highest policy-making body in Nigeria from 2003 to 2009, he had done so in many respects. But, like most other previous members of a team regarded by millions of Nigerians as a failed team, he could not resist being selectively self-serving in his presentation. He carpeted the Jonathan administration; he lashed the Buhari government, but left everyone with the impression that the Obasanjo and Yar’Adua regimes he served were without blemish. Selective remembering and selective forgetting is another characteristic the two gladiators have in common. We will touch on a few before turning to the other corner – where “mouth of fury” is waiting.
A few people rightly pointed out that Soludo, as the CEA to Obasanjo published the NEEDS document which Nigerians were told would lead to double digit growth over a long period. It never did. Soludo’s lasting legacy would however be Banking Consolidation after he became the Governor of Central Bank. The first thing it did was to reduce the number of banks operating in Nigeria from over 70 to twenty-five when it first started. They were banks Soludo assured us we could invest in and “go to sleep with your eyes closed”. And for a while, it appeared he was right. But, the promise was short-lived. Today, there are less than fifteen banks in business and shares purchased at record-high prices while Soludo urged investors on are now trading at record lows. Some of the darling banks of the Soludo era – Intercontinental, Oceanic, Bank PHB etc – have disappeared with trillions of shareholders with them. A lot of the money is now in the private pockets of the bankers Soludo asked Nigerians and foreigners to trust. Naturally, the good Professor glossed over that bit of economic history and the lasting devastating effect it has had on portfolio investment. He now has a better idea.
Nigerians will be better advised to take a close look at the ideas presented at that lecture to be sure that this is not going to be a repeat of the past. Permit me to close this first part of the series by recalling the first paragraph of an article written here in VANGUARD in 2009, when Soludo Banking Consolidation started to get unraveled. Read on.
BANKING CRISIS; THE ROAD TO HELL —1
Every great enterprise starts with enthusiasm for an exalted aim and ends up bogged down in petty politics—Charles Peguy, 1873-1914
(VANGUARD BOOK OF QUOTATIONS p.49).
Perhaps most Nigerians also need to be reminded that “the road to hell is often paved with good intentions”. With bank consolidation, we started as usual with the greatest enthusiasm mixed with a good dose of good intentions and we have landed right in hell. Was it predictable? Was it avoidable? It is too early to tell.
But, let us return to memory lane. In July of this year, writing in my weekly column, Frankly Speaking, this statement was made with all the certainty of a prophet Isaiah. “By the time the real story of banks had become unraveled, because they are still deliberately shrouded in mystery by the banks and the Central Bank of Nigeria, CBN, rest assured there will be a lot of blood on the floor”. That was in part one of the three part series. Part three focused on Oceanic Bank which had published its Annual Report and Accounts and had announced provisions for doubtful debts of N24.5 billion; UBA shoveled in N21 billion; BankPHB threw in N16 billion. By the time the week ended, over N116 billion had been declared in jeopardy by just five banks. That was more capital than the share capital of 40 banks on the eve of consolidation and we have not reached the bottom yet.”
Soludo in his presentation reminded the listeners about the positive results of his efforts as CBN Governor. But, like the brilliant surgeon who carried out an amazing operation, he did not finish the narrative. He failed to tell the audience that “the patient died”. The banking sector Sanusi inherited from Soludo was on its death bed and had to be rescued by burying some of its members – Oceanic, Intercontinental, BankPHB etc. Trillions of naira of Nigerian and foreign funds went down the drain with the banks and consolidation forever.