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Soludo and Soludonomics By Max Gbanite New Jersey, U.S.A.
“…he is arrogant, abrasive, obnoxious, highly intelligent, wealthy, and walks with a swagger befitting only those who feel accomplished academically; have attained the pinnacle of their chosen profession; and have amassed so much financial wealth.” This is exactly how a former employee of Central Bank of Nigeria (CBN) described the man, Professor, Charles Chukwuma Soludo.
Professor Soludo is quintessential Igbo-man. Yes, he was born to reason as a republican, and became the youngest to attain or rather earn the position of a full professor of economics from the prestigious University of Nigeria Nsukka, Enugu State. Those who are in the know ascribed his recruitment as a special adviser to former President Obasanjo, and subsequent elevation as CBN governor, to Dr. Ngozi Okonjo-Iweala, brilliant former Minister of Finance. Though, both are rumored not to be in good terms anymore.
When Prof. Soludo came to head CBN, he made it clear to the deputy governors heading various departments, that he was their god. He spared no one, and was willing to uproot any who stood on his way to making sure that his policies carried the day. It is even whispered in hush-tones that the fear of Soludo is the beginning of wisdom. However, a fearless woman, and the first and only woman deputy governor, Mrs. Mselia; an appointee of Obasanjo stood her grounds against Soludo, and that caused her to be fired.
Mrs. Mselia’s sins were simple; she insisted that the policy of due process in handling of the apex bank matters be adhered to. She spoke her mind when others were intimidated by the intellectual brutalism of Soludo; being an insider who rose through the ranks, Mselia believed that there existed a set of rules that must be followed, which Soludo ignored; her insistence on following those clearly established rules-of-law angered the professor, and she was unceremoniously dismissed. The Presidency should look into this matter, and restore her back to her position; it is only fair.
Yes, it’s also alleged that Soludo has enormous wealth since becoming the governor of CBN. Well, he is not an exception, afterall, every governor since the administration of His Excellency, General Yakubu Gowon, GCFR, did the same. However, there is always a possibility that Soludo used his intellectual capital to enrich himself. If in doubt, wait until the Presidency compels EFCC to move against him.
The phenomenon called ‘SOLUDONOMICS’ actually started with the much celebrated National Economic Empowerment Development Strategy (NEEDS), which was co-authored by Soludo. I remember vividly the day it was celebrated as the blue-print to economic, industrial, and agricultural revolution and emancipation of our dear country.
A thorough evaluation of the paper will reveal to the reader that the program was in earnest a partial abduction of the ideology that guided the principles of ‘Structural Adjustment Program’ (SAP), established under His Excellency, General Ibrahim Babangida, GCFR, and ‘Vision 2010’ established under the late General Sani Abacha.
As a matter of fact, Prof. Soludo working as a special economic adviser, in collaboration with Dr. Joseph Sanusi, the then Governor of CBN, and the economic team, convinced former President Obasanjo, to eradicate Peoples Bank; a bank noted for its’ relationship with the masses; a bank that gave the masses micro-credit loans.
The closure of the bank removed more than 10,000 people from gainful employment, and additional 20,000 in added services. And, today, Soludo wakes up from the slumber to re-introduce community banks that already existed since 1985, and is charging same to become responsible for micro credit lending. Why close peoples bank only to rename it something else.
The then outgoing governor of central bank, Dr. Joseph Sanusi, argued against bank mergers and 25 billion naira recapitalization, and the introduction of the 1,000 naira note. He posited that, whereas the recapitalization of banks would do well for the nation, however, some banks must be allowed to remain as small and medium banks. If Sanusi’s position was adopted, these small and medium banks would have been funding the much talked-about small and medium enterprise industries (SMEI’s).
But, prof. Soludo would not hear that. Today, we have attained the status of mega-bank syndrome, which in a way is good for the nation’s economy. However, the absence of small and medium sized banks has left the production/manufacturing sector of the economy impoverished. The SMEDAN funds are wasting because the mega banks are only interested in funding mega projects.
Prof. Soludo, posited that the ‘Big-Bang’ redecimalization of the naira will bring the following benefits to the nation: · To better anchor inflationary expectations, strengthen public confidence in the naira; · Make for easier conversion to other currencies; · Reverse tendency for currency substitution; · Eliminate higher denominations notes with lower value; · Reduce the cost of production, distribution and processing of currency; · Promote the usage of coins and thus a more efficient pricing and payments system; and · Lay the foundation for the convertibility of the Naira as well as make it the ‘reference currency’ in Africa. (Curled from the Guardian newspaper, August 15th, 2007).
These are brilliantly-well-thought-out-programs for the monetary sector of the economy, and ought to be commended. So, what was Soludo thinking when less than two years ago he introduced the 1,000 naira notes, at a cost of almost 64 billion naira; and the re-colouration of the 20 and 5 naira notes at another cost of almost 48 billion naira to the nation? It doesn’t make intellectual sense, except if the program was designed for ‘egunge-benefit’ purposes. And, it’s very likely, given that Sanusi, before leaving opposed the idea as too costly to an emerging economy.
While Soludo, also cited as example, many countries that have at various times re-decimalized their currency, he forgot to mention other inter-related factors such as the productive side, the population, the employment rate, the infrastructural development; energy sector, transport, roads networks, and other factors in those countries that may act as support to bolster the monetary aspect of their economy.
The issue of making the naira a reference point in West Africa is not so important at this juncture. Did Britain insist on making the pound sterling the currency reference point when the euro was introduced? And, even if that were to happen in future, Nigeria has to work the Francophone countries into submission by breaking the strangle-hold of the ‘Group d’ Metropole’; the powerful French economic mafia that calls the shot in those countries.
Yes, I totally agree that at some point in time Nigerians must be encouraged to use their coins. In the United States for instance, the savings to government accrued from the usage of coins circulation is calculated to amount to billions.
It is also possible that the move if allowed to happen would have enabled the government to settle all domestic debts, and have excess funds to fund various projects within the country, since the mode of payment would be in naira. Afterall, they own the money.
It appeared that Prof. Soludo failed to consider the security implications to the nation when he exuberantly introduced the ‘Big Bang’. But, the President, who reads security reports daily, knows better. Now, imagine explaining to a serving soldier whose knowledge of monetary economics starts and ends with when he receives his salary, that his salary of 11,000.00 naira per month is now 110 naira; you have sowed the seed and created an enabling ground for mutiny.
Therefore, the Attorney General of the Federation (AGF) is correct in using clearly established rule of law in pointing out the procedural error in the manner with which Prof. Soludo handled the matter. This action saved our democracy once again.
An old woman had this to say about the redecimalization: “ if the naira went up step by step to arrive at where it is now, why should it be forced down drastically; you don’t climb down a step or ladder in one swoop…if you do, one is bound to suffer broken bones or whip-lash.” In this case the masses would have been the victims.
While we commend Prof. Charles Chukwuma Soludo for his brilliant articulation of his theory, we the masses would like to see and enjoy the so-called but yet to arrive dividends of democracy enshrined in NEEDS, which he helped to write. We ask that this his wonderful proposal be postponed until he tells Nigerians what happened to all the appropriated funds from 1999-2007, and why the budget was never implemented by President Obasanjo; and what measures, if any, did he put in place to trace the disbursement of funds to various ministries, so that we can also compare them to the records of the ministry of finance.
This recent attempt to re-decimalize, though, a noble idea, was not done in good faith, especially given the position that the government of the day is still struggling to gain legitimacy from the flawed elections.
Imagine if this re-decimalization program is adopted and eventually fails, no one will ever remember that the program was introduced by Soludo. The masses will only remember that it was President Yar’Adua that messed up the economy. If in doubt, why are Drs. Kalu Idika Kalu, and Olu Falae, architects of structural adjustment program (SAP) not blamed or remembered; instead, those who hated the program blame General Babangida.
While hailing an idea whose time is yet to come, I implore the Chief Economic Adviser to the President, Mallam Tanimu Yakubu, to convene a retreat of economists, by inviting the various Heads of Economics departments in our premier Universities, those that head Economics department in banks, former Minister’s of Finance, and former Governor’s of Central Bank to discuss this policy in full, make their submission to the President for consideration before the matter is closed, afterall, the word economics is elastomeric.
Long live the Federal Republic of Nigeria. |