By Dele Sobowale
“He who speaks without modesty will find it difficult to make their words good.
Confucius, 551-479 BC, VANGUARD BOOK OF QUOTATIONS, VBQ p 162.
Dear Prof, accept my sincere congratulations on your victory for three reasons which will be discussed shortly. But, first I must commend your tenacity for vying a third time for office after losing two times and making it. Despite your campaign promises seemingly suggesting that you have the solutions to the problems of Anambra State all figured out, my instincts tell me that you are in for a shock when you mount the saddle. Anambra is not easy to rule.
One other unpleasant surprise awaits you. Your state, like all the rest, is almost broke. The monthly federal revenue allocation and the Internally Generated Revenue, IGR, just barely cover recurrent expenditure incurred by the state. The two are headed downwards as the Federal Government moves to recover $418 million from the states. Deducting N200 billion by the FG is bound to make things a bit difficult in the beginning. Let me now go into the reasons I was delighted that you won.
First, and this has very little to do with you, I was happy that the All Progressives Grand Alliance, APGA, won; because a loss would have resulted in the end of APGA at a time when Nigeria desperately needs a viable third party. The All Progressives Congress, APC and the Peoples Democratic Party, PDP, have become the two sides of a bad coin; there is no distinction between them. That is why it has been easy for political rascals to move from one to the other without remorse. Nothing in the way those parties conduct their affairs now suggests that there will be a major change for the better – irrespective of which one wins any election.
With APGA still in the race; and with you as Governor, the party might be able to repeat what Action Congress, AC, led by Bola Tinubu, did when Lagos was the only AC state in the South West. The rest were under PDP. Tinubu held firm and helped to recover the SW for progressives from the PDP. What Tinubu did for AC you can do for APGA by broadening its support base into all of the South East and beyond. In fact, APC and PDP might create the conditions for several of their members to want to join APGA in order to fulfil their ambitions in 2023.
“The economist, like anyone else, must concern himself with the ultimate aims of man.” Alfred Marshall, 1842-1924, VBQ p 45.
I don’t need to introduce Marshall to you. But, for our readers, he was one of the founding fathers of Classical Economics. As an economist myself, I actually believe that every professional must be concerned with the fate of Nigeria. I have noticed that trait in you also. At any rate, to the best of my knowledge, you are probably the first economist to be elected Governor in Nigeria. That gives me a great deal (not total) confidence that at least the economy of Anambra is in the hands of someone who knows too well the consequences of bad economic and financial policies and decisions. I will explain my reservation later.
You are already on record for promising to turn Anambra into another Dubai, Singapore etc. I honestly pray you will do it. Be the Lee Kuan Yew of Nigeria and I will sing your praises as long as life endures. God knows we need such a miracle as soon as possible before all hope is lost. But, this is why I am a bit afraid for and of you.
THE PARADOX OF VISIONARY LEADERSHIP
“People with vision usually do more harm than good. John Major. UK-PM.
“Where there is no vision, the people perish.” Proverbs 29: 18. VBQ p 264
Vision in leaders has for time immemorial been advertised as a great attribute. It took the British former Prime Minister, John Major, in 1993, to draw our attention to the fact that “vision” is not totally accident-free. Some visionary leaders have unleashed horrors on societies. Adolf Hitler,1889-1945, had a vision of creating an Aryan super-race of white people who would dominate the world for ever. Second World War resulted. At least 6 million Jews were wiped out in the holocaust in addition to over 30 million people worldwide. We now know that vision can sometimes be deadly.
In the last few weeks leading to the November 6, 2021 election, I read several articles written by Igbo columnists about you. Many were in support; others were opposed to your ambition. That should be expected in a democracy; especially when those on the two sides harbour undisclosed motives powered by self-interest. Each columnist called others “paid agents”, “stupid” and/or “enemies of progress”. It was mostly childish stuff to me.
Despite their differences, they all brought one issue into the controversies – the Banking Consolidation initiative of 2005. For your supporters, it was a resounding success; for the opponents, it was a colossal failure. As it turned out, they were both right and wrong – depending on when you stop observing the events unleashed by Consolidation. It was a brilliant idea which was on its way to transforming banking and the Nigerian economy until 2008. It has become an unmitigated disaster since then. Let me quickly summarise the sequence of events from July 2005 — to the time Sanusi Lamido replaced you as Governor of Central Bank of Nigeria.
1. July 2005: CBN announced Banking Consolidation policy. From January 2006, banks operating in Nigeria must have paid up capital of at least N25 billion. Only three banks –First, Union and UBA – had the required capital out of 73 banks on that day.
2. July to December 31, 2005: An unprecedented avalanche of banks’ IPOs hit the capital market.
3. Jan 2006: 25 “Mega” banks emerged.
4. Jan 2006 to April 2008: The sky was the limit for banks’ shares in the capital market. Prices skyrocketed and dividends kept pace. But, by then some of us were warning banks’ investors that a disaster was looming. I was one of the “prophets of doom” who investors were asked to ignore.
5. Mid-2008: Global bank Crisis erupted. CBN assured Nigerians that the country was insulated from contagion from the global disaster. We disagreed with you.
6. Aug 2008: Global crisis hits the Nigerian Stock Exchange, NSE, like a hurricane. Share prices for the first time started sliding down. I wrote a column urging people to dump their bank shares as fast as they could. I disposed of OCEANIC, FIRST and INTERCONTINENTAL bank shares profitably. CBN and the NSE told investors that the setback was temporary. I said it was permanent.
7. 2009: The great crash started in earnest and it was relentless. The banks were in trouble; CBN tried desperately to keep them afloat. The slide continued until you were removed from office.
8. Still in 2009: Sanusi Lamido succeeded Soludo and revealed that the banks have been deceiving the public with annual reports and accounts. Share prices generally tumbled to less than N10 from as high as N63.
9. 2010: CBN was forced to create the Asset Management Corporation of Nigeria to buy toxic loans from the Mega banks you foisted on Nigeria. Today, almost N6 trillion of debts is still outstanding. Eight of the Mega banks died in 2010 – less than five years after you assured us that we “can go to sleep with our two eyes closed”.
10. Millions of Nigerians were bankrupted for life on account of your vision.
That is why I am scared of another “vision” like Banking Consolidation – given its disastrous after-effects. It was a brilliant idea woefully executed.
To be continued…