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Soludo’s candidature: Matters arising

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Professor Chukwuma Charles Soludo, the first class economist and the immediate past Governor of Central Bank of Nigeria, recently made public his membership of the People Democratic Party ( PDP), the largest political rally in Africa, apologies to Audu Ogbeh, that party’s former chairman. He also joined the long list of aspirants seeking to contest for the February 5, 2010 gubernatorial election in Anambra State.

As a scholar of remarkable intellectual endowment, Professor Soludo, it was said in many quarters, must have done his homework thoroughly and with much rigour expected of an academic of his status and must have found his latest adventure worth the while before throwing his hat in the ring.

It was even said by some Soludo fans that the renowned economist decided to go for the title of a governor a second time, this time on a manifestly open partisan platform,  in his resolve to make available to his state his legendary economic and administrative wizardry.

But before the good Professor throws himself headlong into the campaigns for the number one position in Anambra State, he may find it even more rewarding  to take a perceptive look into his recent past, his strides and limitations in his last duty post, the current state of the financial sector where he superintended until few months back and the public perception of his tenure given the recent revelations before deciding whether what these times demand is a battle for another public office or a temporary retreat from the public arena.

To be sure, Soludo is no stranger to electoral contest. As a student at the University of Nigeria, Nsukka, in the 80s, Soludo, with a catchy slogan of Soludo Is the Solution, contested for the Presidency of the Students’ Union. He lost hands down. But the brilliant unionist had since gone ahead to acquire a chain of degrees and has distinguished himself as a highly rated economist and lately a banking regulator of note.

But Soludo’s journey to national reckoning could be said to have started with his appointment as the Chief Economic Adviser to President Olusegun Obasanjo and his authorship of that government’s economic road map as encapsulated in the National Economic Empowerment and Development Strategy (NEEDS).

While that Economic package was long in brilliant theoretical submissions, it was short on diligent implementation thereby ensuring that the nation remains in the lowest rung of most socio-economic global indices several years after.

Not to worry. Soludo was to later clinch the CBN top job. Soludo’s tenure will go down in the recorded history of the nation’s financial evolution as the most action packed even as it was the most controversial. Of particular note was his consolidation exercise which, through a huge hike in recapitalization from 2 billion Naira to 25 billion Naira, reduced the number of banks from 89 to 24.

Soludo came in to CBN with an aura of a messiah; a long sought reformer who has all it takes to reposition the nation’s banking sector for global challenges and with ability and capability to clean the rot in the nation’s financial sector.

He plunged himself into the job with uncommon zeal.  And before we knew it, Nigerian banks had become global brands. Before our very eyes, our banks had assumed the status of corporate behemoths, posting incredible returns.

Soludo was on top of his game or so we were led to believe. Then came the global economic meltdown. The panic this monumental economic downturn engendered reverberated across the globe. No cause for alarm, Soludo assured the nation before the National Assembly.

But it was not long before our economic wizard was to recant. He was misunderstood, he said. By then, it had started becoming obvious that a mono economic nation that relies almost totally on the economies of other nations for the purchase of its crude oil could not but be negatively unaffected by economic crisis of such huge proportion.

By now, the nation’s economy, under Soludo’s watch at the CBN, had started unraveling. Crude oil prices had crashed and with it the prices of petroleum products in the international market.  Nigerian banks that had availed oil marketing importers huge unsecured facilities knew they were in trouble. For the very few discerning and keen financial sector watchers, the banks, touted as strong and solid by Soludo were anything, but healthy.

But again Soludo assured Nigerians that all was well with the banks. He assured that none of the banks had any problem that could make them go under. Those who expressed worries were described as hell raisers who were envious of the success of the consolidation programme. Those within the banking system who genuinely felt that something must be done to arrest the ugly situation were accused of de-marketing competitors.

That many of the banks were permanently relying on life support through the Expanded Discount Window with the CBN and interbank facilities to meet their obligation was not enough for Professor Soludo to alert the nation of an impending financial crisis. Not a few believed that the regulator and the regulated have entered into an unholy alliance that could only work against the depositors and the nation’s economy at large.

Enter Sanusi Lamido Sanusi. From day one in office as the CBN governor, it was obvious that with this risk manager of note, the party was soon going to be over for the banks that had, over the years, perfected the art and science of book cooking and false disclosures.

It did not take long before the nation was woken up to the unfortunate and costly reality that under Soludo’s watch,  close to N2 trillion went down the drains through non performing loans, mostly unsecured, from banks that had been paraded as rock solid by the Soludo team.

One thing Sanusi has done is that he has refused to openly criticize his predecessor in office. Even if Sanusi, through utterances, has refused to put his predecessor to task, his sanitization exercise has more than called to question Soludo’s tenure and his management of the nation’s financial sector while in office.

But if Sanusi is tight lipped on Soludo, not so for thorough bred financial experts like the Chairman of StanbicIBTC  Plc, Atedo Peterside. Indeed, at a CBN forum in London last month, Atedo disclosed that Soludo threatened to sanction banks if they reveal a critical information that some of their peer s were in trouble.

Said he:  “He (Soludo) threatened the banks with sanctions if they disclosed that the capital of some of their peers had been eroded. Instead, the CBN blamed the problem on de-marketing tactics employed by some banks to take away customers from their peers.”

He revealed more. Peterside made known that the consolidation exercise that Soludo had taken so much credit for was not even original to him. He noted that the blueprint of the consolidation process was actually put together by Soludo’s predecessor, Joseph Sanusi.

Peterside said that rather than  for Soludo to go at slow pace, he rushed through the implementation of the exercise without putting in place the necessary framework that would ensure the banks had the capacity to cope with the explosive growth of their balance sheets.

In a direct indictment of Soludo on this latest mess the banks have found themselves, Peterside said: “banks became reckless and took excessive risks that served to turn back the clock and effectively exposed the “Naked Emperor” – the man Soludo.

It is Mr. Peterside’s ‘Naked Emperor’ that has now thrown his hat into the ring for the gubernatorial contest in Anambra. Indeed, it is not the inalienable right of Soludo to run for a public office that is in contention here.

The point, however, is that the impression Soludo’s latest gambit has created is that all along he had been a partisan of the PDP and may have earned his appointment  as the CBN governor in the first place, by  the virtue of his membership of the ruling party.  In essence, with a benefit of hindsight, we now know that Soludo got on to the job which requires a non partisan personage on a partisan platform while giving the impression that he got the job strictly on merit.

More crucial is the state in which Soludo left the CBN. As at now, even if Sanusi is not talking about his predecessor, it is now a notorious fact that Soludo left a tidy mess in the nation’s financial sector. The rot is still unraveling. The audit report of the 14 other banks are yet to be made public.

Yet the man at the centre of it all, Soludo, is now busy working tirelessly to take up another public office. It is an eloquent statement about the Nigerian nation. Soludo needs to know or be told that there is time for everything-a time to be heard and a time to remain quiet, a time to advance and a time to retreat, even if momentarily.

Now does not appear like the most appropriate time for Soludo to bring out political war machine for yet another conquest. These times demand for the erudite economist some stock taking and deep reflections.

Adedoyin, a former staff of Vanguard, wrote in from Lagos.

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