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Tag: Soludo

  • Soludo: Jonathan missed the point on missing N30tr

    Soludo: Jonathan missed the point on missing N30tr

    To President Goodluck Jonathan, Prof Charles Soludo’s claim that more than N30 trillion is either missing from the treasury or unaccounted for is all politics. But the ex-Central Bank of Nigeria (CBN) Governor insists Mr. President got it all wrong for dismissing the allegation on the premise that the federal vote in the last four years was a far-cry from N30 trillion.

    My attention has been drawn this morning (yesterday) to an article entitled: “Jonathan Replies Soludo over “missing N30 trillion claim”— extracting from Mr. President’s interview as published by Thisday newspaper. ThisDay quoted Mr. President as saying that “Soludo said that under Ngozi’s watch, they stole N30 trillion” but that since the sum of the federal budget over the last four years was less than N30 trillion, such an amount could not have been “stolen”.

    According to the President, “it is all political”. I had earlier stated that I would not make further comments on the issues until probably after the elections but since Mr. President has decided to join the fray, I am constrained to make a further brief clarification. For me, President Goodluck Jonathan is a gentleman and a friend but I have a fundamental disagreement on his management of the economy.

    On the issues at stake, I believe that the pressures of office and the hectic electioneering campaigns have not allowed him time to read my articles or that his staff have not explained the contents to him hence he totally missed the point in his comments. For the avoidance of doubt, let me clarify as follows: Former Central Bank Governor, Charles Soludo,  In my article entitled: “Ngozi Okonjo-Iweala and the Missing Trillions”, I presented some rough calculations covering: oil theft, money that ought to accrue to stock of foreign reserves, unbudgeted oil subsidy payments, customs duty waivers, leakages through the self-financing government parastatals, unremitted sums by NNPC (Nigerian National Petroleum Coorporation), among others, I concluded that section of my article by noting that: “I have a long list but let me wait for now. I do not want to talk about other ‘black pots’ that impinge on national security. My estimate, Madam, is that probably more than N30 trillion has either been stolen or lost or unaccounted for or simply mismanaged under your watchful eyes in the past four years”.

      It is evident that the monies I referred to are “off-budget”. These are monies that did not make it to the budget. I find it funny that the government deliberately avoided the issues raised above but instead has sought to divert attention by focusing on the “federal budget”. Let me state for the record that I believe that the amount of resources that are either stolen from the economy or outright mismanaged by government far exceeds the federal budget per annum. Ours is about a N100 trillion economy, and I will be shocked if the government pretends that it does not know that currently about 10 per cent of the GDP (Gross Domestic Product)  falls into a ‘black hole’ on annual basis. We have not added figures based on counterfactual analysis such as the cost to the aggregate economy of bad or misguided economic policy. For example, in today’s (yesterday) Thisday newspaper, a headline news reports that “Aliko Dangote, Africa’s Richest Man, Loses $7.8 billion as Naira, Stocks Plunge” while reporting that “In dollar terms, the devaluation has knocked more than $40 billion off the value of Nigeria’s economy”. Of course, most people predicted that oil prices would soon fall but we were caught unprepared, and today, the parallel market exchange rate is N225 to the dollar. Thus, the kind of analysis in today’s Thisday is just one little example of the kind of collateral damages—‘costs’ or ‘losses’— that mismanagement foists on the system. To repeat, my article did not focus on the federal budget: the mismanagement of the consumption budget and its unprecedented debt accumulation (with low value-for-money expenditures) are entirely different matters.

      What I found particularly disconcerting as a Nigerian from the comments I read is the fixation to validation from the World Bank. According to Mr. President, “we asked the minister how her colleagues at the World Bank saw the accusation”. I shook my head in disbelief. It is instructive that no one asked what Nigerians thought or ‘how Nigerians saw it’ but rather what was important to government was the impression of the World Bank. If this is the mind-set of our leaders, then ordinary citizens have real cause to worry. Well, I have read several editorial comments of Nigerian media and they do not agree with the ‘impression’ of the World Bank official. I read a similar comment by a high government official stating that World Bank officials and CNN (Cable Network News) had told them that government was doing well and therefore who else could question them. But neither the World Bank nor CNN conducts comprehensive independent surveys on the economy— they comment based on the data they are given— and their subjective “opinions” cannot substitute for hard facts.

    The World Bank is not a statistical agency. I can provide a long list of countries that World Bank reports praised as ‘star performers’ and they slumped into deep crisis almost immediately after. Check out the World Bank and IMF (International Monetary Fund) reports on the United States (U.S.) and other countries’ economies shortly before the unprecedented global financial and economic crisis in fifty years (the Great Recession of 2008/09). Actually for many countries, once they start getting such ‘praises’, then perceptive officials begin to worry. Nigeria is probably the only country where its government officials quote the World Bank while ignoring data from its own statistical agency!

     A serious concern is that while government relies on external validation (opinion) as ‘proof’ of its performance, it is selective in the process—accepting the positive ones and disparaging the negative ones. Our recent exchanges illustrate the point. In my first article (January 26): “Buhari Vs Jonathan: Beyond the Elections”, I argued that “the economy seems to be on auto pilot, with confusion as to who is in charge, and government largely as a constraint.

    There are no big ideas, and it is difficult to see where economic policy is headed to. My thesis is that the Nigerian economy, if properly managed, should have been growing at an annual rate of about 12 per cent given the oil boom, and poverty and unemployment should have fallen dramatically over the last five years”. No one has credibly challenged the above, except what the Financial Times of London described as a “furious response by the minister”. But, the influential Economist Magazine of London and New York Times agreed with us. According to the Economist editorial (February 7, 2015): “… as Africa’s biggest economy stages its most important election since the restoration of civilian rule in 1999, and perhaps since the civil war four decades ago, Nigerians must pick between the incumbent, Goodluck Jonathan, who has proved an utter failure, and the opposition leader, Muhammadu Buhari….The single bright spot of his rule has been Nigeria’s economy, one of the world’s fastest-growing. Yet that is largely despite the government rather than because of it, and falling oil prices will temper the boom. The prosperity has not been broadly shared: under Mr Jonathan poverty has increased. Nigerians typically die eight years younger than their poorer neighbours in nearby Ghana”. I gave the government an “F” grade on economic management, and the Economist described its performance as “utter failure”. The Economist also basically agreed with me that the re-basing of the economy and its observed ‘growth’ have nothing to do with government policy. Again, government has not credibly challenged the above or is the Economist’s view also ‘all political ’? The government simply waved it off. My point is that if the government has to rely on the “impressions” of external bodies, then it should be consistent and comprehensive.

    In conclusion, let me re-state that I firmly stand by my earlier statements. These are weighty statements which I weighed carefully before issuing. I appreciate that this is an election time and so attempts would be made to trivialise, or either play politics with, or divert attention from, them. In a serious society, we should have had a good debate on these matters as they could provide some of the building blocks in trying to pick the pieces after the elections. Part of our citizen duty in a democracy is to raise such issues and demand for answers. In the meantime, I grant that our leaders are busy with campaigns but these issues will not go away until we have a transparent resolution. Be assured that after the elections, we will be back with even more questions!

  • Full text of Charles Soludo’s article on missing N30trn

    Full text of Charles Soludo’s article on missing N30trn

    My attention has been drawn this morning to an article entitled: “Jonathan Replies Soludo over “missing N30 trillion” claim”— extracting from Mr. President’s interview as published by Thisday newspaper.

    ThisDay quoted Mr. President as saying that “Soludo said that under Ngozi’s watch they stole N30 trillion” but that since the sum of the federal budget over the last four years was less than N30 trillion, such an amount could not have been “stolen”.

    According to the President, “it is all political”. I had earlier stated that I would not make further comments on the issues until probably after the elections but since Mr. President has decided to join the fray, I am constrained to make a further brief clarification.

    For me, President Jonathan is a gentleman and a friend but I have a fundamental disagreement on his management of the economy. On the issues at stake, I believe that the pressures of office and the hectic electioneering campaigns have not allowed him time to read my articles or that his staff have not explained the contents to him hence he totally missed the point in his comments. For the avoidance of doubt, let me clarify as follows:

    In my article entitled “Ngozi Okonjo-Iweala and the Missing Trillions”, I presented some rough calculations covering: oil theft, money that ought to accrue to stock of foreign reserves, unbudgeted oil subsidy payments, customs duty waivers, leakages through the self-financing government parastatals, unremitted sums by NNPC, etc.
    I concluded that section of my article by noting that: “I have a long list but let me wait for now. I do not want to talk about other ‘black pots’ that impinge on national security. My estimate, Madam, is that probably more than N30 trillion has either been stolen or lost or unaccounted for or simply mismanaged under your watchful eyes in the past four years.”

    It is evident that the monies I referred to are “off-budget”. These are monies that did not make it to the budget. I find it funny that the Government deliberately avoided the issues raised above but instead has sought to divert attention by focusing on the “federal budget”.

    Let me state for the record that I believe that the amount of resources that are either stolen from the economy or out-rightly mismanaged by government far exceeds the federal budget per annum.

    Ours is about a N100 trillion economy, and I will be shocked if the government pretends that it does not know that currently about 10% of the GDP falls into a ‘black hole’ on annual basis.

    We have not added figures based on counterfactual analysis such as the cost to the aggregate economy of bad or misguided economic policy. For example, in today’s Thisday newspaper, a headline news reports that “Aliko Dangote, Africa’s Richest Man, Loses $7.8 Billion as Naira, Stocks Plunge” while reporting that “In dollar terms, the devaluation has knocked more than $40 billion off the value of Nigeria’s economy”. Of course, most people predicted that oil prices would soon fall but we were caught unprepared, and today, the parallel market exchange rate is N225 to the dollar.

    Thus, the kind of analysis in today’s Thisday is just one little example of the kind of collateral damages–‘costs’ or ‘losses’– that mismanagement foists on the system. To repeat, my article did not focus on the federal budget: the mismanagement of the consumption budget and its unprecedented debt accumulation (with low value-for-money expenditures) are entirely different matters.

    What I found particularly disconcerting as a Nigerian from the comments I read is the fixation to validation from the World Bank. According to Mr. President, “we asked the Minister how her colleagues at the World Bank saw the accusation”. I shook my head in disbelief. It is instructive that no one asked what Nigerians thought or ‘how Nigerians saw it’ but rather what was important to government was the impression of the World Bank. If this is the mind-set of our leaders, then ordinary citizens have real cause to worry.

    Well, I have read several editorial comments of Nigerian media and they do not agree with the ‘impression’ of the World Bank official. I read a similar comment by a high government official stating that World Bank officials and CNN had told them that government was doing well and therefore who else could question them.

    But neither the World Bank nor CNN conducts comprehensive independent surveys on the economy— they comment based on the data they are given— and their subjective “opinions” cannot substitute for hard facts.

    The World Bank is not a statistical agency. I can provide a long list of countries that World Bank reports praised as ‘star performers’ and they slumped into deep crisis almost immediately after. Check out the World Bank and IMF reports on the US and other countries’ economies shortly before the unprecedented global financial and economic crisis in fifty years (the Great Recession of 2008/09).

    Actually for many countries once they start getting such ‘praises’, then perceptive officials begin to worry. Nigeria is probably the only country where its government officials quote the World Bank while ignoring data from its own statistical agency!

    A serious concern is that while government relies on external validation (opinion) as ‘proof’ of its performance, it is selective in the process—accepting the positive ones and disparaging the negative ones. Our recent exchanges illustrate the point. In my first article (26th January): “Buhari Vs Jonathan: Beyond the Elections”, I argued that “the economy seems to be on auto pilot, with confusion as to who is in charge, and government largely as a constraint.

    There are no big ideas, and it is difficult to see where economic policy is headed to. My thesis is that the Nigerian economy, if properly managed, should have been growing at an annual rate of about 12% given the oil boom, and poverty and unemployment should have fallen dramatically over the last five years”. No one has credibly challenged the above, except what the Financial Times of London described as a “furious response by the Minister”. But, the influential Economist Magazine of London and New York Times agreed with us.

    According to the Economist editorial (7th February, 2015): “… as Africa’s biggest economy stages its most important election since the restoration of civilian rule in 1999, and perhaps since the civil war four decades ago, Nigerians must pick between the incumbent, Goodluck Jonathan, who has proved an utter failure, and the opposition leader, Muhammadu Buhari.

    “The single bright spot of his rule has been Nigeria’s economy, one of the world’s fastest-growing. Yet that is largely despite the government rather than because of it, and falling oil prices will temper the boom. The prosperity has not been broadly shared: under Mr Jonathan poverty has increased. Nigerians typically die eight years younger than their poorer neighbours in nearby Ghana.”

    I gave the Government an “F” grade on economic management, and the Economist described its performance as “utter failure”.

    The Economist also basically agreed with me that the re-basing of the economy and its observed ‘growth’ have nothing to do with government policy. Again, government has not credibly challenged the above or is the Economist’s view also ‘all political ’? Government simply waved it off. My point is that if Government has to rely on the “impressions” of external bodies, then it should be consistent and comprehensive.

    In conclusion, let me re-state that I firmly stand by my earlier statements. These are weighty statements which I weighed carefully before issuing. I appreciate that this is an election time and so attempts would be made to trivialize, or either play politics with, or divert attention from, them. In a serious society, we should have had a good debate on these matters as they could provide some of the building blocks in trying to pick the pieces after the elections.

    Part of our citizen duty in a democracy is to raise such issues and demand for answers. In the meantime, I grant that our leaders are busy with campaigns but these issues won’t go away until we have a transparent resolution. Be assured that after the elections, we will be back with even more questions!

  • Okonjo-Iweala Vs  Soludo: Debate aborted?

    IR: In a robust and vibrant democracy, debate should not be feared; rather it should be welcomed as a way to sharpen our democratic values as a nation. What former Central Bank of Nigeria, CBN Governor, Charles Soludo wrote about the state of the Nigerian nation was not to cast an aspersion on the person of the Minister of Finance and the coordinator of the economy, Ngozi Okonjo-Iweala as some people claimed.

    I want to say that this is not a political zinger on the person of the Minister of Finance and coordinating minister of the economy. As a person she is likeable and beautiful. Rather, I want to draw a parallel between the World Bank and the Minister, for Nigerians to know their pedigrees. It was an illusion to think that the World Bank as an institution is a place where any country can depend on for any sound economic philosophy: also to think that just because someone had worked at the World Bank would automatically be a superior mind as far economic matters are concerned. The World Bank is a money making machine for the United States and other advanced economies. The bank makes roughly over $500 billion yearly from poor borrowers, and in the process plummets these countries into debt and poverty!

    The World Bank is responsible for 90 per cent of the world’s poverty; a fact that is lost on most people. Any country that adheres to the economic prescription of the World Bank will fail. During the regime of Obasanjo, a former President of Brazil told him to ignore the World Bank if Nigeria was to succeed. The only country in Asia that stood the South East Asian crisis was Malaysia during the Asian crisis caused by the World Bank. Malaysia was the only country that did not take the bait of the World Bank and that was the only country that survived in South East Asia. When President Jonathan said on the campaign trail that there is no one who knows about the economy better than the World Bank, what came to mind is that he is ignorant. No doubt, the President has a good intention to salvage the economy of Nigeria but he has asked the wrong person to do that.

    Nigeria is in a deep depression and the only thing that the government of Nigeria can do is what Franklin D. Roosevelt did as president at the time. Jonathan should have looked at  Okonjo-Iweala’s resume under Obasanjo. That was something that should not have been too hard to do given that she was the person in charge of the economy few years before the President came into office. It is clear that President Obasanjo’s government did not record any economic growth.

    Today Brazil is an emerging economy with a promising future because they chose to jettison the advice of the World Bank. Until Nigeria does that, we would remain in the wood for a long time. Any country, like Nigeria that depends on the economic expertise of the World Bank would suffer the consequences. Some countries in South America left the World Bank to form what is called the Bank of the South knowing what the World Bank is up to. It’s time to let Okonjo-Iweala go. When she leaves she would look over her shoulder and say that was a shock therapy to Nigeria economy.

     

    •Pastor Toate Ganago,

    jos777@rocketmail.com

  • Soludo insists N30tr missing under Okonjo-Iweala

    Soludo insists N30tr missing under Okonjo-Iweala

    • Ex-CBN boss announces ceasefire

    Former Central Bank of Nigeria (CBN) Governor Prof Charles Soludo yesterday insisted that more than N30 trillion is missing from the treasury under the watch of Finance Minister and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala.

    However, Soludo said he had declared a ceasefire following Mrs. Okonjo-Iweala’s decision not to respond to the allegation that N30 trillion cannot be accounted for under her watch.

    He announced the ceasefire yesterday in a three-paragraph statement titled: ‘I stand by my statements.’

    Soludo said he was withholding parts two and three of his articles because the minister was no longer ready to join in the war of words.

    His letter reads: “My attention has been drawn to statements credited to the Hon. Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, in response to my latest article and call for a structured debate on the issues.

    “According to the report, she no longer wants to join issues with me.  In the circumstance of the moment, I therefore withhold parts two and three of my promised three-part response.

    “Let me also state for the avoidance of doubt that I stand by every statement I made in the two articles viz: ‘Buhari Vs Jonathan: Beyond the Elections’ and ‘Ngozi Okonjo-Iweala and the Missing Trillions’.

    “ In particular, I insist that over N30 trillion has either been stolen or unaccounted for, or grossly mismanaged over the last few years. This figure does not include the estimated $40.9 billion (N8.6 trillion at parallel market exchange rate or nearly two years’ Federal Government budget) which the African Union’s (AU) recent report claims to be “stolen” from Nigeria each year.

    “I wish to thank Nigerians all over the world, who have been contributing to this timely debate. This is election time and it is expected that some vested interests will either choose to live in denial or attempt to politicise the issues.

    “But from the debate so far, I am convinced that our economic management won’t be the same again. Once our managers know that the citizens will rigorously and vigorously challenge them to account, the welfare of the citizens will be better for it.

    “Whoever wins has his job cut out for him, and to the extent that this debate has challenged the respective teams to seriously re-examine their blueprints to guarantee the security and prosperity of every Nigerian, my objective is accomplished.  I love my country Nigeria, and as I said before, I won’t keep quiet again.

    “Once more, Nigeria must survive and prosper beyond Buhari or Jonathan!,” he stated.

  • Between Soludo and Okonjo-Iweala

    Between Soludo and Okonjo-Iweala

    Just when it looked like Nigerians were condemned to listening to barren debates on non-issues in the run-up to the February 14 presidential and federal legislative elections, former Governor of the Central Bank of Nigeria (CBN), Professor Chukwuma Charles Soludo, waded in on January 25 with a bombshell that ought to force those seeking our votes to debate the real issues that concern us.

    Soludo’s roughly 6,000-word article, “Buhari versus Jonathan: Beyond the Elections,” may yet fail in achieving his apparent objective but after his piece, which was essentially about President Goodluck Jonathan’s management – the former CBN Governor himself called it mismanagement – of our economy, no one can say there has been no attempt to put an end to the manipulation and exploitation of primordial sentiments by politicians to win our votes.

    In this respect, it was good that Soludo’s piece provoked a very rapid response the very next day from our Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, through her Special  Adviser, Paul Nwabuikwu. The very headline of Nwabuikwu’s roughly 3,220-word reply to Soludo which was a parody of sorts of the title of Soludo’s piece – “Beyond Belief: Soludo’s Self-Serving article on Economic Management is Deficit in Facts, Logic and Honour” – spoke volumes about the anger his article must have provoked in Abuja.

    First, Soludo said in his article, at the time of oil boom Nigeria had gone on a consumption spree “such that the budgets of the last five years can best be described as ‘consumption budgets.’” Second, he said, not one penny was added to the stock of foreign reserves at a period Nigeria earned hundreds of billions from oil.

    Third, the country, he said, went on a borrowing binge such that “the rate of public debt accumulation at a time of unprecedented boom had no parallel in the world…

    “In sum, the mismanagement of our economy has brought us once more to the brink.”

    Neither the government nor the opposition, he said, have so far come up with any credible economic policies on how to bring the country back from that brink.

    Not surprisingly, his harsh criticism of government greatly angered the Coordinating Minister for the Economy and Finance Minister.  “It is totally remarkable” she said in the rather uncharitable opening paragraphs of her reply through Nwabuikwu, “that Professor Charles Chukwuma Soludo, the man who presided over the worst mismanagement of Nigeria’s banking sector as Governor of the Central Bank of Nigeria between May 2004 and May 2009, can write about the mismanagement of the economy.”

    Her concluding paragraph was even less charitable of the former CBN Governor.

    “It is a sad day for Nigeria and the economics profession,” she said, “that someone like Soludo, a former CBN governor, should write such an article. If Soludo wants to regain respect, he should return to the path of professionalism. He certainly needs something to improve his image from that of someone whose sojourn into National Economic Management ended in disaster for the banking sector, his sojourn in politics, ended in overwhelming rejection by the electorate, and more recently, his sojourn abroad, has put him out of touch with the reality of the Nigerian economy.”

    Soludo, obviously spoiling for a fight, fired back an even more damaging charge of economic mismanagement against the minister. “Ngozi Okonjo-Iweala And The Missing Trillions (1)” he entitled his roughly 6,500-word rejoinder to her rejoinder. This time he accused the minister, more or less, of criminal negligence in carrying out her brief as a double-minister.

    “My earlier article,” he said, “stated that the minimum forex reserves should have been at least $90 billion by now and you did not challenge it. Rather it is about $30 billion, meaning that gross mismanagement has denied the country some $60 billion or another N12.6 trillion.

    “Now add the ‘missing’ $20 billion from the NNPC. You promised a forensic audit report ‘soon’, and more than a year later the Report itself is still ‘missing’. This is over N4 trillion, and we don’t know how much more has ‘missed’ since Sanusi cried out.”

    Soludo then proceeded to challenge her to a three-way debate between the government and the leading opposition party, with himself as a third party on any economic topic of her choice. The debate, he suggested, should also include the way out of our economic mess and should take place by February 12.

    I doubt that the minister will pick up Soludo’s gauntlet. But even if she did, it is doubtful that a debate at this time will make any difference because, as Soludo himself said in his first article, most Nigerians have pretty much made up their minds who to vote for on considerations other than the record of performance and dispositions of the contestants.

    Even then I still believe Soludo deserves commendation for trying to pull us away from the useless debates on non-issues that have so far characterised the campaigns.

    Soludo’s articles may have been self-serving. Certainly his record as CBN Governor is hardly as glorious as he has tried to paint it. True, his creation of 25 mega-banks out of the hitherto existing 89 transformed Nigeria’s financial sector like no other reform before it, but it did not achieve its principal objectives. It did stop the banking sector, in which 11 banks were already seriously ailing, from an imminent collapse. However, the mergers did not stop some of them from remaining family piggybanks, nor did they improve transparency and good governance, a failure which forced his successor, Malam Sanusi Lamido Sanusi, to do a massive cleaning up pretty early in his tenure. Nor still did the mega banks finance the so-called “real sector” – agriculture, manufacturing and even services – more than marginally better than the smaller banks.

    However, I believe it is rather disingenuous of our double-minister to try and isolate what she calls Soludo’s failure from what she says was the wonderful performance of the economy during her first sojourn as Finance Minister on leave from the World Bank. First, as she very well knew, if Soludo failed to supervise the new mega-banks closely it was because the chief executives of some of the banks had an even easier access to the top hierarchy of government than Soludo himself, arising from their unexplained shares and deposits in the banks. Soludo simply knew his limits and wisely refrained from crossing them.

    Second, she was merely the first among equals in President Olusegun Obasanjo’s Economic Management Team and several of its ideas came from others, not least of all from Soludo as, first, Obasanjo’s Economic Adviser, and then CBN Governor.

    The problem with our double-minister, I believe, is, first, that all too often she wants to eat her cake and still have it;  she likes to take credit for government’s achievements and distant herself from its failures. She has, for example, been quick to take credit for the country’s debt relief in 2005 and yet decline responsibility for the fact that the relief translated into little or no benefit for ordinary Nigerians.

    More recently she has been quick to take credit for the so-called rebasing of the country’s economy which has made it Africa’s number one, well ahead of the wealthier South African’s, the continent’s hitherto number one. But while quick in taking credit for Nigeria’s phantom economic growth she is reticent, to say the least, about the fact that the country’s human development index is worse today than it was before the rebasing. Worse, she has been even more reticent about the incredible degree of corruption in the land.

    Second, our double-minister likes to talk about the sacrifices she has made in leaving her job at the World Bank to come back home and serve. What you never hear from her is what benefits she has derived from coming home to serve, including her high profile projections abroad and enviable physical assets at home.

    This, of course, is natural. But it is also the very reason why she should spare us her sermons on her self-sacrifice.

    In an interview with Will Ross, BBC’s Lagos Correspondent, on March 12 last year, for example, she seemed angry when he asked her if Nigeria was serious about fighting corruption. He had pointed to her that there seemed to be a huge gap between government’s declaration of war on corruption and its actions, notably the unprecedented suspension of the CBN governor, Malam Sanusi, for raising  the alarm over huge sums missing from the Federation Account .

    Didn’t she think, Ross asked, her reputation was at stake?

    “I don’t think my reputation is under threat and to imply otherwise is distinctly wrong. I know what I’m doing. I know why I’m here. It would be very easy for me to sit at the World Bank and earn a nice salary and criticise. I gave up a comfortable career to come here and do my bit because I recognise that nobody but us Nigerians can clean it up.”

    Fine words, indeed. Trouble is, doing her own bit has not been any more glorious and more beneficial to ordinary Nigerians than that of Soludo, her new-found pet-hate. Nor has her doing her own bit been all sacrifices and no benefits.

  • Soludo to Okonjo-Iweala: N30tr missing under you

    Soludo to Okonjo-Iweala: N30tr missing under you

    Former Central Bank of Nigeria (CBN) Governor Prof. Charles Chukwuma Soludo has accused Finance Minister Mrs. Okonjo-Iweala of bringing misery to Nigerians with her economic policies.

    According to him, under Dr. Okonjo-Iweala’s watch as coordinating minister of the economy, over N30 trillion is missing.

    He said: “Public finance is haemorrhaging to the point that estimated over N30 trillion is missing or stolen or unaccounted for, or simply mismanaged. ”

    He challenged the minister to a debate on the economy.

    Soludo threw the gauntlet in a reaction to the minister’s diatribe following his article on the state of the economy. It is tagged, ‘Ngozi Okonjo-Iweala and the Missing Trillions’ Part 1. Soludo said calling for the debate with the minister is because Nigeria’s survival and prosperity is at stake.

  • Soludo to Okonjo-Iweala: tell Nigerians why Obasanjo sacked you as finance minister

    Soludo to Okonjo-Iweala: tell Nigerians why Obasanjo sacked you as finance minister

    I read some of the responses to my article, “Buhari vs Jonathan: Beyond the Election”, and I want to thank everyone who has contributed to the debate. I am glad that the debate has finally taken off. I have decided, for the record, to re-enter the debate if only to set some records straight and hopefully elevate the debate further.  Whom do I respond to? First, let me thank Governor Kayode Fayemi for his very mature and professional response on behalf of the APC (All Progressives Congress). It forms a great basis for deepening the conversation. Pat Utomi, Oby Ezekwesili, Iyabo Obasanjo and thousands of other patriotic Nigerians have raised the content of the debate. Femi Fani-Kayode made me laugh, as usual. The Governor Jonah Jang faction of the Nigeria Governors’ Forum (NGF) played the usual politics, although I know what most of them think privately. Who else? Oh, Peter Obi. Well, since he cannot write, he designated Valentine as usual to write for him (who never disputed the  NBS (Natioanl  Bureau of  Statistics)  that Obi broke world record in the pauperisation of Anambra people but instead focused on lies and abuses) I would not dignify him with a response here. His third class performance in Anambra will be the subject of a comprehensive article later.

    Here, I will focus on Dr. Ngozi Okonjo-Iweala’s response (as Minister of Finance and Coordinating Minister of the Economy—CME and hence on behalf of the Federal Government). Since I have known her, out of deep respect, I have never called her by her name: I call her Madam. I must state that I have great pains seeing myself on the opposite side of the table with Madam, in this way. I respect you, Madam, and will always do.  If you read my article of September 2010 (before you became Minister), the tone and elucidation were as strong as the current one. It is my honest effort to ensure that our choice of leaders is based on rigorous scrutiny of what is on offer.  Part of my frustration is that five years after, everything I warned about has come to happen and we are conducting our campaigns as if we are not in crisis. As a concerned Nigerian, I have a duty to speak out again. Regrettably, you have taken it very personal.

    I am not bothered about the personal abuses: I actually expected worse. What name has the government not called former President Olusegun Obasanjo or any person who has dared to disagree with it of late? Anyone who disagrees with the government must either be ‘insane’ or have a ‘character’ deficiency or must be ‘looking for a job’ or ‘without honour’, or a ‘charlatan’. Yesterday,  Alhaji Sanusi Lamido Sanusi alleged that $20 billion was missing and he was accused of gross financial mismanagement, recklessness and poor governance to the point of being the first governor of the Central Bank of Nigeria (CBN) to be suspended from office. Today, he is the good one; and for daring to award an “F” grade for our economic performance, Soludo has become the ‘worst’ and ‘without character’ or perhaps ‘looking for position’ (Lol!). Some days ago, a former president was called ‘a motor park tout’ and ‘un-statesmanly’ just for disagreeing.  This “how dare you criticise us” mind-set of the government is dangerous for our democracy.

    In this Part One of my planned three part series, I will restrict it to the main issues you raised. I will not bother about the malicious attacks on my person. For me, it is nothing personal. In early 2011, I had a similar heated exchange with then Finance Minister Segun Aganga. But when the Nigerian economy was at stake and he invited me to a stakeholders’ meeting in his office (as Minister of Trade and Investment) to discuss Nigeria’s response to the ruinous European Union (EU)-Economic Partnership for Africa (EPA), I flew into Nigeria for that (at my expense)— the first and only time I have been to any government office to discuss policy since I left office. It is about Nigeria. I will, as expected, remind people like you of the salient aspects of my record of public service in response to your charge; challenge your claim to debt relief, and your reason for not saving; highlight your forgery of economic statistics and the lies in your response; but most importantly re-focus our attention to the historic mismanagement of our economy which you carefully avoided. I will show that while you are introducing austerity measures and soon to immiserate the citizens, our public finance is haemorrhaging to the point that estimated over N30 trillion is missing or stolen or unaccounted for, or simply mismanaged— under your watch! We cannot go on like this, and I am convinced that an alternative future is possible. Can we have a public debate on this alternative future? The issues at stake are too grave to be trivialised through name-calling.  As I write, the naira exchange rate to the dollar is at N215 (from N158 a few months ago) and unless oil price recovers, this is just the beginning.  For the sake of Nigeria, I would not keep quiet anymore!

    Let me start with Madam’s rather comical, wild judgment on my tenure of office which I believe to be totally false and baseless. I apologise upfront that in the process of making a ‘personal defence’, it is difficult to avoid a rather uncomfortable emphasis on “I”. I did not want that but since Madam has dragged us this low, I have little choice but to do so in the next few paragraphs—just to keep the record straight!

    In my view, there are three criteria for evaluating a public officer’s stewardship: the evaluation by his employer; the satisfaction of the public he served; and the hard facts of performance. As I will show on these three counts, I am convinced that I left a world-record of public service, and a thousand  Okonjo-Iwealas cannot re-write that history. I served Nigeria under two Presidents (Obasanjo and Yar’Adua) and as my immediate bosses, below are their written testimonials of my record.

    Said President Obasanjo (December 2004):

    “Charles Soludo is a true Nigerian. He is the sort of Nigerian that we all know we can rely on. Among his numerous virtues is COURAGE. I have found in him a man who can take tough and realistic decisions, stand his ground, educate others on the salience of his decision, and work very hard to ensure that the decision is efficiently and effectively implemented. His dedication to duty is first rate. His leadership qualities are admirable and his willingness to listen and learn is simply infectious. Prof Soludo has within a short time emerged as one of the leading lights of our nation. Not because he has a godfather but by sheer hard work, loyalty, dedication to duty, commitment to the nation, creativity, and undiluted association with the reform agenda….”

    President Yar’Adua (May 2009) had the following to say about the CBN under my leadership:

    “… the CBN has performed creditably well in delivering on its core mandates. This is especially even more so in the last five years. Most people would agree that without the successful banking consolidation and effective management of our foreign reserves, the current global crisis would have shaken the financial system and our national economy to their foundations with calamitous consequences”.

    In the President’s special letter of commendation after the completion of my tenure of office, President Yar’Adua (June 2009) had the following to say to me:

     “As your tenure as Governor of the Central Bank of Nigeria comes to a glorious end, I write on behalf of the Government and people of Nigeria to place on record our debt of gratitude to you for your dedicated service and uncommon sense of duty over the past five years. I am confident that your worthy antecedents in the CBN and in prior appointments in the service of our nation remain sources of inspiration to an entire generation. As I wish you even more astounding successes in the years ahead, it is my fervent hope that you will readily avail us of your distinguished service when the need arises in the future”.

    To the best of my knowledge, President Obasanjo has not changed those views even after ten years. The views of my two bosses, not the emotional outburst of an angry person desperate to get even, are what count.

    How did Nigerians evaluate my public service? Unfortunately, we do not have scientific opinion polls on job approval ratings for individual public officers. But if the public opinions of individuals and organised groups (labour, employers, depositors, borrowers, stakeholders of the financial institutions, newspaper editorials, investors, etc) as expressed in thousands of newspaper/magazine clips during and after my tenure are anything to go by, then 82 per cent of the public largely agree with the sentiments expressed by my two bosses. Your views belong to the other 18 per cent which is okay. After all, no one is perfect. Five Nigerian newspapers and magazines simultaneously named us “Man of the Year” in one year— unprecedented in Nigeria’s history. I do not talk about hundreds of awards and recognitions by various segments of our society (during and even after service) for “Excellent Public Service”. I was particularly touched by the historic award by the staff union of the CBN and the tears in the eyes of many as thousands of the staff gave me a standing ovation as I walked the aisle after my brief farewell speech.

    Certainly, the international community (investors, bankers, scholars, donors, media, etc) took serious notice of the revolution in Nigeria’s monetary and financial system. I am recipient of five international awards as global and African Central Bank Governor of the Year, not to mention dozens of other recognitions (even after leaving office). The London Financial Times described us as “a great reformer”. Even as the global economic and financial crisis raged in 2008, the United Nations (UN) General Assembly appointed me to serve on the Commission of Experts to reform the international monetary and financial system. You don’t appoint someone who has ‘mismanaged’ his national financial system to reform the global system. For eight years until 2012, I served on the Chief Economist Advisory Council (CEAC) of the World Bank, and together with two Nobel Prize winners in economics and other experts we met periodically and advised two presidents and two chief economists of the World Bank, and in 2011, I served on the External Advisory Group of the International Monetary Fund (IMF).  Again, these are not positions for ‘mis-managers’. Since I left office, I have been advising countries and central banks; and there is hardly any two months I don’t consult/advise on banking/financial and monetary policy. I have given these illustrations to make the point that for every one Okonjo-Iweala’s attempt to rewrite history, there are thousands who disagree.

    Now, to some skeletal facts of our stewardship! I will be brief as I have a whole book to tell my story. As chief economic adviser, I had advised that our banking system could not support the private sector-led economy envisioned under NEEDS. When I assumed office at the CBN, I inherited 89 rickety, mostly family banks (all of which put together were not up to the size of number four bank in South Africa). Many were insolvent, with depositors’ money trapped, and 20 more about to collapse. To get a credit of $300 million probably required all the banks to syndicate it. For me, there was a national emergency. I drafted a 13-point reform agenda, discussed and agreed all the specifics with the President, and his deputy; as well as my management team at the CBN, and we swung into action. President Obasanjo promised 100 per cent support and actually delivered 1000 per cent – which was decisive. I apologise to you Madam because I did not brief or inform you about it. We just wanted to keep it confidential given the sensitivity of the announcement. It is on record that you never supported it.

    It was both a revolution and a war and most people thought it was “impossible”, but thank God we succeeded. For the first time in Nigeria’s history, a policy of that magnitude was announced and deadline kept with precision.  We were courageous to revoke the licenses of 14 banks, including those of my friends, in one day. The FT-Banker concluded that the scale, precision, and cost of the transformation were unprecedented in the world. Before then, Malaysia had the least cost of banking consolidation at five per cent of Malaysian Gross Domestic Product (GDP). It did not cost Nigerian taxpayers one penny. Twenty-five new, stronger banks emerged but the powerful idea behind consolidation ignited something even more powerful—-‘the race to the top’. Banks raised more capital and even banks like the First Bank, Zenith and  GTB, among others that did not merge with others went on capital raising several times. The consequence was higher levels of capitalisation and within two years, 14 Nigerian banks were in the top 1000 banks in the world and two in the top 300 (no Nigerian bank was in the top 1000 before I came). Even after I left office, still nine banks were in the top 1000. Our vision was to have a Nigerian bank in the top 100 banks within 10 years. As I see the new Access Bank; Zenith, GTB, Fidelity, Diamond, UBA, FBN, FCMB, Skye,Stanbic IBTC, Union and Ecobank,  among others, I cannot but feel that we have taken giant steps forward.

    Deposits and credit soared (from barely N1.2 trillion to over N7 trillion); new technologies (ATM and e-banking) boomed, and banks had 57,000 new jobs; mega businesses emerged (ask any major operator in the Nigerian economy their experience with banking and credit before and after Soludo —the Dangotes, Arik, MM2, oil and gas operators and others); capital market boomed and dominated by the banking sector. It was a new dawn for the Nigerian private sector. I have heard Alhaji Aliko Dangote twice say that he would not be near as big as he is today without the banking consolidation. Many other stakeholders still say it today. Foregn Direct Investment (FDI) and portfolio inflows flooded into Nigeria. The world celebrated, and one single transformative idea has changed the face of the private sector and economy forever.  Banks became Nigeria’s first transnational corporations with about 37 branches outside of Nigeria.

    Nigeria survived the global crisis because of this, and it is the banking sector that has largely been powering the economic growth you claim (compare banks trillions of naira credit for investments in the productive sector with your government’s miserable expenditure on critical infrastructure and investment; much of your borrowing – bonds – is from the banks). Your privatisation of power sector, several Public-Private-Partnership (PPP) projects on infrastructure are now possible because of the mega banks. Today, Nigerian banks syndicate multi-billion dollar loans— unthinkable before. Madam, if the consolidation was ‘mismanaged’, there would not have been any bank to start with in the aftermath of the global crisis— as President Yar’adua correctly pointed out. Even you, during a recent presentation at the Banquet Hall in Abuja, advertised consolidation as a historic achievement. How can you recognise a ‘mis-managed’ project as an outstanding achievement? As we say in Igbo, you can’t cover the moon with your palms.

    Let me be clear: the quantum size of the new banks following consolidation presented challenges of risk management and supervision. We deployed all we had and overworked the CBN staff. The carry-over of bad loans from the consolidated banks was quickly cleaned up. To the best of my knowledge, we instituted stringent regulatory and supervisory regime (consistent with best practices at the time). We even had resident examiners in the banks and required bank Managing Directors (MDs) to personally sign their reports to CBN. I recall that the former MD of GTB complained of “regulatory intrusiveness”. To our credit, non-performing loans (NPL) came down from 22 per cent in 2003 and 2004 to six per cent as at 2008. Anywhere in the world, a central bank that brought NPL from 22 per cent to six per cent over a four-year period does not look like one with a loose supervisory regime. Name other developing countries that performed better, Madam. So, on point of fact, Madam lied. Yours was a reckless assertion without basis by a Finance Minister.

    The banks in Nigeria were supervised by the CBN and NDIC, but other institutions— international firms which audited them, international rating agencies which also examined their books, capital market operators since most were listed companies — all had oversight. I put on record that there was never any information/report of infractions by any bank which was brought to my attention and which we did not act upon decisively during my tenure. I heard the comment that some of the bank MDs were my friends. Well, my response is that perhaps as CME, you should kill all your friends operating in the economy or become their enemies. For the record, my successor audited all the banks and none of my so-called friends was indicted. It speaks volumes. Indeed, it is also a fact that the alleged personal criminal infractions (including lapses in corporate governance Madam alluded to) by some bank CEOs were found out, only after they had been removed from office. My successor told me that the comprehensive audit of the banks did not reveal such infractions. Of course, you must be God or have a special tip-off from inside to get to such information while the MDs are in office. Unfortunately, all over the world, no financial system has succeeded in routing out all criminal behaviours by the operators. So, Madam, I challenge you to provide one shred of evidence that ‘there was no separation between regulators and regulated’ or be honourable enough to retract your reckless statement.

    What happened? The unanticipated and unprecedented crisis of 2008/09 hit the world. More than 40 United States (U.S.) and European banks either collapsed or were shaken badly (remember the Lehman Brothers, Fannie Mae and Freddie Mac, Wachovia, HSBC, Lloyds TSB, Citibank, Goldman Sachs, even UBS and others) and hundreds of billions of dollars were spent to bail them out. The contagion effects spread like a wild fire, destroying national stock markets and banks. The nascent (big) banks in Nigeria faced sudden multiple shocks— liquidity, exchange rate, oil price, capital market ant others. As oil prices collapsed, loans to oil and gas became non-performing overnight; loans to the capital market became non-performing overnight; etc.  Our first priority was to save the entire banking system and the economy from systemic collapse. I assured Nigerians that no bank would be allowed to fail, and not many people know what it took to achieve it. Once we had navigated through the unexpected /unprecedented turbulence, we laid out a comprehensive plan to clean up the debris which we presented to stakeholders in Lagos (March 2009). I had pleaded with the Senate to pass the AMCON Bill which we sent to them in 2004. But I had a comprehensive plan to finish the clean-up with or without AMCON by the end of 2009, including second round consolidation and a N500 billion fund (my book will detail all these). I left behind an 11-volume document of the Financial System Strategy 2020 (FSS2020) which has remained the policy roadmap for the CBN/financial sector since I left office.

    I have two analogies for our experience. Ours was really like an airplane that was cruising and suddenly meets an unexpected and unprecedented turbulence. After the pilots and the crew succeed in navigating through the potential crash and probably land the airplane, people look in and start blaming the crew for the broken tea cups, chairs, and drinks that fell during the turbulence as evidence that the crew never kept the airplane clean or serviced it. My second analogy is that of a sudden earthquake in a region it was never expected and some houses collapsed. All of a sudden, the housing authority is to blame for not requiring earthquake-proof foundations for the houses. Well, my legal experts call it force majeure, an act of nature!

    To be fair, after every crisis, there are lessons (and my book will detail what, with benefit of that experience, we should have done differently). Risk management— which has always been there— now took a new centre stage all over the world following the crisis. But for anyone to suggest that CBN under me, for one minute, took its eyes off the ball is, to say the least, ludicrous. The U.S. financial system literally crippled the world costing America hundreds of billions of dollars but no one has suggested that Alan Greenspan is no longer the great maestro!

    AMCON is a big topic (which I will address at a later date) but her claims show either ignorance or mischief. She claims that N5.7 trillion of AMCON funds was used to rescue banks and the ‘bond issued’ as ‘cost to taxpayers’. Really? I will deal with the AMCON I envisaged and the AMCON under you later but let me state that even if 100 per cent of the banks’ NPL was offloaded on AMCON, it would not be up to N5.7 trillion. Enough said for now. The fact is that the Federal Government has not put a penny in the AMCON fund: the banking system is financing itself, and together with the sinking fund by banks, AMCON surely can’t default (thanks to consolidation that the banks are now big enough to cough out such funds to solve the system’s problem). Did you intend to deceive the readers by refusing to tell them that much of the AMCON fund is ‘investment’ and not ‘expense’. I am sure you heard the IMF’s alarm about moral hazard? If you want, we can have a focused debate on AMCON.

    Next, let me briefly respond to a few outlandish claims. She brags about ‘single-digit’ inflation rate ‘now’ and alleges that when I left office, inflation was above 13 per cent, I just laughed at this one. In Nigeria’s history, no governor of the CBN has delivered 24 consecutive months of single digit inflation as I did until the advent of the unprecedented global crisis in 2008. It was not for nothing that the world cheered us as monetary policy czar, Madam! Perhaps you are also not aware that we broke a world record by having a depreciated real effective exchange rate during a time of export boom and this was at the heart of our reserve accumulation and the portfolio/FDI inflows. I resisted the IMF advice to deplete reserves for liquidity management, and Nigeria had enough self-insurance to survive the global crisis.  The opposite has happened under you Madam, and the Nigerian economy is in trouble. Naira exchange rate appreciated under me from N133 to N117 before the global crisis; and reserves grew to all time high of $62 billion. For the first time since 1986, the official, interbank and parallel market exchange rates converged under me. You can’t match these records!

    I hereby challenge your attempt to blame others for not saving for the rainy day. It is not a virtue when you are quick to appropriate all the credit when things are going well, but shift the blame when they go wrong. You blame the state governors— who, according to you, have taken the Federal Government to the Supreme Court—not that a Supreme Court judgment forced your hands. For your information, the governors have never agreed to savings and always threatened court action even under Obasanjo. Why did we save under Obasanjo but not under Jonathan? Two keywords explain it: leadership and integrity.  Governor Amaechi said the governors insisted on sharing the funds because they found out that you were illegally fiddling with the savings.  So, as Nigerians still wonder, if billions of dollars are now ‘missing’ under your nose, why should governors trust you to keep their money?  Do the states that have taken the Federal Government to the Supreme Court and refused to save also include the Peoples Democratic Party (PDP) governors—who are in the majority? If so, then it is fatal: even governors of your own party, PDP, do not trust you to keep their money! Furthermore, did the governors also stop the Federal Government from saving part of its share? If you ran a surplus budget at the federal level, you would have had credibility to blame others or to say they did not listen to your advice. The key point is that since you were running huge deficits yourself, it was also in your own interest to share the ECA. You did not show leadership or credibility, full stop!

    Next, Madam, I was really embarrassed for you to read that one of the reasons for declining forex reserves is ‘oil theft’. Under you as Minister of Finance and coordinator of the economy, the basket of our national treasury is leaking profusely from all sides. Just a few illustrations! First, you admit that ‘oil theft’ has reduced oil output from the average 2.3 – 2.4 million barrels per day (mpd) to 1.95mpd (meaning that at least 350,000 to 450,000 barrels per day are being ‘stolen’. On the average of 400,000 per day and the oil prices over the past four years, it comes to about $60 billion ‘stolen’ in just four years. In today’s exchange rate, that is about N12.6 trillion. This is at a time of cessation of crisis in the Niger Delta and amnesty programme. Can you tell Nigerians how much the amnesty programme costs, and also the annual cost for ‘protecting’ the pipelines and security of oil wells? And the ‘thieves’ are spirits? Come on, Madam!

    Second, my earlier article stated that the minimum forex reserves should have been at least $90 billion by now and you did not challenge it. Rather it is about $30 billion, meaning that gross mismanagement has denied the country some $60 billion or another N12.6 trillion.

    Now add the ‘missing’ $20 billion from the Nigerian National Petrooleum Corporation (NNPC). You promised a forensic audit report ‘soon’, and more than a year later the Report itself is still ‘missing’. This is over N4 trillion, and we do not know how much more has ‘missed’ since Sanusi cried out. How many trillions of naira were paid for oil subsidy (unappropriated?).  How many trillions (in actual fact) have been ‘lost’ through customs duty waivers over the last four years?  As coordinator of the economy, can you tell Nigerians why the price of automotive gas oil (AGO), popularly called diesel,  has still not come down despite the crash in global crude oil prices, and how much is being appropriated by friends in the process?  Be honest: do you really know (as coordinator and minister of finance) how many trillions of Naira, self- financing government agencies earn and spend?  I have a long list but let me wait for now. I do not want to talk about other ‘black pots’ that impinge on national security.  My estimate, Madam, is that probably more than N30 trillion has either been stolen or lost or unaccounted for or simply mismanaged under your watchful eyes in the past four years. Since you claim to be in charge, Nigerians are right to ask you to account. Think about what this amount could mean for the 112 million poor Nigerians or for our schools, hospitals, roads and other infrastructure. Soon, you will start asking the citizens to pay this or that tax, while some faceless “thieves” were pocketing over $40 million per day from oil alone.

    You alluded to debt relief in your response and tried to take credit. Well, your CV is honest enough to admit that your two achievements in office as Finance minister under Obasanjo were that “you led the Nigerian team that struck a deal with the Paris Club” and that you “introduced the practice of publishing each state’s monthly financial allocation in the newspapers”. You are right about the two achievements. Let me put on record that Nigeria would have secured debt relief under anyone as Minister of Finance. President Obasanjo secured debt relief for Nigeria. Much of his first term was used to get Nigeria back into the international community and to campaign for debt relief. Before you were sworn in as Minister of Finance, President Bush visited Nigeria and both of us accompanied President Obasanjo during the meeting. There, Mr. Bush promised to support Nigeria with debt relief and asked our president to ensure that he met the conditions of the Paris Club. Obasanjo mobilised the global political support and coordinated all of us to ensure that the government met the check-list of ‘conditionalities’ as required.  I spent five weeks in the hotel with my team (as coordinator/chairman for drafting the National Economic Empowerment and Development Strategy, NEEDS).

    Some of the reform targets in NEEDS became the ‘conditionalities’ Nigeria was required to fulfil to merit debt relief. You and I signed the various MoU with the IMF on behalf of Nigeria (the policy support instrument). We had a great team at work and each member of the economic team had specific aspects of the conditionalities to deliver: Bode Agusto was in-charge of the budget; Oby Ezekwesili held sway at Bureau of Public Procurement and later Minister of Solid Mineral, and Education (but specifically tasked with delivering on EITI and procurement reforms); Nuhu Ribadu was at the EFCC fighting corruption; I was at the CBN delivering on monetary policy and banking reforms; Steve Oronsaye worked hard to delist Nigeria from the FATF; Nenadi Usman was in-charge of the parastatals; El-Rufai held forth at FCT and in charge of public sector reforms; privatisation programme went on, etc. Did you know that the IMF wrote President Obasanjo threatening that there would be no debt relief if the CBN did not meet some monetary targets, and do you know the magic we performed to meet them? Can you tell Nigerians which of the ‘conditionalities’ that you personally implemented? With the groundswell of political support and Nigeria meeting all the ‘conditionalities’, debt relief was assured.

    Your major role as stated in your CV was to lead the team to negotiate the specific terms of the relief, having fulfilled the conditions. I still believe that Nigeria should have gotten far better terms than you negotiated. Of course, with your eyes on returning to the World Bank after office, I did not expect you to boldly stand up to the donor community in defence of Nigeria. Was there a conflict of interest on your part?

    By the way, can you tell Nigerians why you were eased out as Finance Minister and you cried like a baby begging OBJ to still allow you remain in the Economic Management team—— barely few weeks after the debt relief? Why were you eventually also removed from the economic management team if you were so important?  Ironically, President Jonathan has recycled you, with a bigger title and greater responsibilities. But the difference is that the team that did the actual work is no longer there, and the world has seen that the king is naked.

    You are brilliant Madam, but you need serious help. Having spent all your life in the World Bank bureaucracy largely in administration/operations, no one will blame you if your economics has become a bit rusty. There are firebrand Nigerians all over the world to draft to service. It is certainly embarrassing to Nigeria for you to be bothering World Bank economists to help you with most basic economic analysis.

    Your response on the poverty issue is deeply troubling. You accuse me of using “2011 statistics on poverty by the NBS to support his argument, while ignoring more recent figures”. At least you did not refute the NBS figure as valid. In the next sentence, Madam went ahead to note that “as stated in the Nigeria Economic Report 2014 by the World Bank, poverty in Nigeria has dropped from 35.2 percent of population in 2010/2011 to 33.1 percent in 2012/2013”. Did you notice that you have quoted two figures for poverty for the same year as being equally correct? So, for 2011, was poverty 71 per cent (according to NBS) or 35 per cent according to the World Bank? To the best of my knowledge, the last published household survey by NBS was in 2011. The World Bank does not conduct household surveys in member states to determine poverty incidence. So, when and by whom was the survey that gave the World Bank figures?

    What worries me is that this government is the first in our history to attempt to manipulate our national statistics under Dr.Okonjo-Iweala. When NBS published the poverty figures in 2011, she felt indicted and incensed. She called upon the World Bank to come and examine the ‘methodology’ and get NBS to ‘review’ its numbers. Mrs. Ezekwesili (as VP Africa Region rejected the call to try to tamper with a country’s statistics). Once Oby left, the ‘World Bank’ started talking about ‘new figures’, without conducting any new surveys.  I was told about it by a World Bank economist, and I cautioned that it was a dangerous gamble that would damage the credibility of the NBS. If you want to ‘review methodology’, you conduct another survey but you cannot change ‘methodology’ because you do not like the published figures. No government in our history has tried it: even the late Gen. Sani Abacha allowed a poverty survey that put poverty at 67 per cent under his regime. At this rate, who will believe statistics coming from the Nigerian government again? Is it now the World Bank that sits in Washington and allocates poverty numbers to Nigeria? Something smells here!

    Madam alleges that the NBS—as a parastatal under the National Planning Commission(under me) departed from the ‘international standard method of poverty measurement’. How and when, Madam? I was in office at National Planning for 11 months from July 2003 to May 2004. A poverty survey was conducted in 2004 and the results computed and published in 2005/2006— more than a year after I had gone to the CBN. Or perhaps, it was a clever way to divert attention from your manipulation of published economic statistics. The NBS published its poverty data in 2006 when you were Minister of Finance, and you did not question the ‘methodology’ because the figures looked good. In 2011, the poverty numbers (using the same methodology as in 2005/2006)indicted the government and suddenly, the ‘methodology’ is wrong. Interesting times!

    Now that you decide which economic statistics published by NBS to accept and which ones to ‘change the methodology’ to give favourable figures, you can keep feeding your manipulated figures to your international media circus for the vain glorious awards to sustain an empty hype, while Nigerians groan under hardship. We can actually ask Nigerians whether they are getting better off now contrary to your bogus figures.

    Many of Madam’s responses were comical, but this one is classic. According to her, the chief economic adviser and NBS “worked hard to determine how many jobs we need to create in a year”, and went on to ask, “why didn’t Soludo do this when he was CEA?” (Lol!). Madam, any good economist needs less than 10 minutes to compute this figure, not the (months? of) ‘hard work’ by your team. My calculation is that the number of jobs Nigeria needs to create each year to significantly reduce unemployment rate to sustainable levels in the next few years is at least three million, and not the 1.8 million by your team. We are talking about the Nigerian economy, please.

    Your magic wand for mass housing is the Mortgage Refinance Corporation with 23,000 mortgage offers—for a country with 17 million housing deficit! Then, there is the pedestrian proposal of a new development bank— financed with loans from the World Bank, etc? A World Bank loan to set up another ‘development bank’ where we already have Bank of Industry, Bank of Agriculture, NEXIM, Federal Mortgage Bank, etc? People have totally run out of ideas and cannot see anything for Nigeria without through the prism of the World Bank. I will offer you free consultancy on how to set up a development bank without a World Bank loan but we don’t need another one now. I actually gave the late President Yar’adua a two-page note for a N3 trillion development fund then, and if we plug your leaking pipes, it could actually be a N10 trillion fund. I envisioned and set up the Africa Finance Corporation (AFC)—Africa’s premier infrastructure bank!

    Frankly, I do not understand why you seem highly troubled that the Soludo you thought had “disappeared from the political space” seems to be still around. Well, let me assure you that I will only ‘disappear’ in God’s own time. I gave credit to two past presidents who laid the foundation of the market economy we operate today. You did not contest or contradict any of my points. Rather, what you see is that Soludo must be ‘looking for a position’. Pity! If I am looking for a position, I would be running around one of the candidates now just as you are busy dancing Atilogwu dance at TAN (Transformation Ambassadors of Nigeria) and PDP rallies, struggling to keep your job. How Yar’adua drafted me to contest for governor in Anambra and APGA (All Progressives Grand Alliance) leadership as well and how I was “stopped” on both occasions are in the public domain. But I am not deterred for one minute. Chinua Achebe said that on leadership, Nigeria is a country that goes for a football match with its 10th eleven. I am proud and happy to have offered to serve my people, and for the service of Nigeria, I will do it again and again. How many times did Abraham Lincoln, Obama, Reagan and others contest before they got there?  I actually encourage everyone who believes he/she has something to offer to get involved or stop complaining. I am happy seeing the increasing critical mass of professionals (like you) now getting involved. It is good for Nigeria!

    What is at stake is the survival and prosperity of Nigeria. Next elections are critical, and for me the key is the economy. We must offer Nigerians clarity on the choices before them. Can I propose a three-way debate with you (representing PDP/Federal Government), nominee of APC (Utomi or Fayemi?or any other), and myself (as independent citizen— I do not belong to any of the two). Let us have two bouts of debate between now and February 12, 2015, focusing on: CBN/AMCON and the financial system (if you want); our economy and its outlook, and agenda/alternative paths to sustainable prosperity post elections. Choose the dates and times, and for the sake of Nigeria, I will fly in.  You can invite any of your international media friends as moderators.  I feel the pain of the 180 million Nigerians whose tomorrow you have carelessly rendered bleak, and when I think of what the missing trillions could do for them, it becomes extremely urgent that we all must deepen the debate. Eagerly waiting for your response, please!

  • Fayemi versus Soludo

    SIR: I read Dr Kayode Fayemi’s rejoinder to Dr Charles Soludo`s observation with relief. As a long standing admirer, his thoughtful piece was only to be expected. It has subsequently been widely acclaimed.

    What is however disconcerting is why the APC is not fighting the elections on the basis of – ` Its the economy stupid!`. This to state the obvious is the tried and tested route to defeat an incumbent government in office. You only have to look at what has happened in Greece this week.

    Other historical examples can be cited. Lula da Silva won at the third attempt in Brazil by offering a convincing alternative economic platform to a sceptical electorate. Going further back, recall the totally unexpected landslide victory of the Labour Party in the United Kingdom in 1945.

    Faced with running against a war hero in Sir Winston Churchill,`the greatest English man of all times`, if you take the propaganda seriously ( I don’t ), the Labour Party fought on a hard economic position `Yes, Churchill won the war. We are going to win the peace.`

    As the seminal analysis `The road to 1945` pointed out, by focusing on the widening of access to education, health and social services, the Labour Party completely out foxed the war hero in what is still regarded as one of the greatest electoral shifts in history.

    As Dr Soludo pointed out in 1979, Chief Obafemi Awolowo admirably offered a well thought, meticulously costed and convincing alternative economic platform.

    This is why it is pertinent to ask: What on earth is going on?. This issue is taxing the emotions of anxious PVC holders across the country. The Jonathan administration has the most deplorable economic record in living memory. Plunging living standards have been reinforced by mind blowing corruption and the recent devaluation of the naira.  Frankly, its key operators ought to face an economic war crimes tribunal.

    By not focusing on the economy, we are about to squander an historic opportunity. For example the consequences of the depreciation of the currency must be spelt out in clear terms. This is unpardonable. The Italian philosopher Antonio Gramsci famously observed that the rules of engagement in politics requires shifting the territory of debate in favour of one`s own project . Why on earth is this not being done?

    By not doing so, the odious, not fit for purpose Femi Fani-Kayode and the disgusting Ayo Fayose and their clearly insane fellow travellers have been allowed to step into the void. They must not pass.

    Henceforth, Fayemi’s response to Soludo must be the focus of the APC campaign, advertising and agit- prop. This will stop` certificate`, religion and ethnicity dead in its track. The issue to para-phrase Bill Clinton is` Are you better off now than you where four years ago?`.

    Its time to change tack in order to chase the `crazy bald heads out of the yard` to quote Bob Marley.

     

    • Kanmi Ademiluyi,

    Lagos

  • Soludo worst CBN Gov-Says Okonjo-Iweala

    Soludo worst CBN Gov-Says Okonjo-Iweala

    The Coordinating Minister for the Economy and Minister of Finance Dr. Ngozi Okonjo-Iweala has responded to former governor of the Central Bank of Nigeria (CBN) Charles Soludo’s recent critique of the Nigerian economy, describing Soludo as the worst CBN governor in Nigeria’s history.

    Okonjo-Iweala in a statement from her office noted that “the consolidation of the banking sector was a good policy idea of the Obasanjo Administration but Soludo went on to thoroughly mismanage its implementation leading to the worst financial crisis in Nigeria’s history.”

    The finance minister stated that after Soludo’s consolidation exercise, “the regulatory functions of the Soludo-led CBN were very poorly exercised. As Governor, he failed to adequately supervise and regulate the now larger banks – an anomaly in Financial Sector Supervision. In his time there was very little separation between the regulators and the regulated which is a violation of a key requirement of Central Banking success.”

    This Okonjo-Iweala said “led to infractions in corporate governance in many banks as loans and other credit instruments running to hundreds of billions of naira were extended to clients without following due process, and several of these loans could not be paid back. This massive accumulation of bad debts or non-performing loans as they are called in the banking sector meant that our banks were ill-positioned to deal with the global financial crisis when it hit.”

    Okonjo-Iweala accused Soludo of bringing the banking sector to its knees and as such the sector “required a massive bailout by Nigerian tax payers. This bailout was done by his successor (now Emir of Kano) who cleaned up all the bad debts and transferred them to the newly-established Asset Management Company of Nigeria (AMCON), from where they are managed today.”

    For the record Okonjo-Iweala stated that “Soludo’s single-handed mismanagement of the banking sector led to an incredible accumulation of liabilities that will cost tax payers about N5.67 trillion (being the total face value of AMCON-issued bonds) to clean up.”

    This amount she said “is more than the entire Federal Government 2015 Budget, constitutes the bulk of Nigeria’s ‘contingent liabilities’ mentioned in Soludo’s article. It is only in Nigeria where someone who perpetrated such a colossal economic atrocity would have the temerity to make assertions on public debt and the management of the economy.”

    Concerning Soludo’s comments on the mismanagement of the economy and the imposition of the austerity measures, the finance minister lamented that “the fall in oil prices, a global phenomenon over which Nigeria has no control, has given every charlatan the opportunity to attack the economy, and by extension the managers of the economy.”

    Thorough examination of the facts on performance under the Jonathan Administration Okonjo-Iweala said “will also reveal that at a time when global economic performance was mediocre, with GDP growth averaging about three percent per annum, Nigeria’s GDP growth – averaging about six percent per annum – is indeed remarkable.”

    Even more interesting she said “is the fact that the oil sector did not drive this economic performance but the non-oil sector (Agriculture, Manufacturing, Telecommunications, the Creative Economy, and so on), which shows that the current Administration’s diversification objective under the Transformation Agenda is working.”

  • Soludo and the Jonathan scorecard

    Expect a fatwa from the intellectual goons of the Jonathan administration on former Central Bank of Nigeria (CBN) Governor Chukwuma Soludo for his blistering critique of the policies of their principal as published by this newspaper yesterday. A refreshing detour from the tonnes of staid and sterile stuff spewed by the henchmen of a rattled regime, it does more than a needle-prick on the exaggerated self-score by the regime hacks.

    Exactly three weeks ago on this page, yours truly had predicted that the administration’s claims of achievement would, sooner than later, be tested literally and figuratively with fire. That prediction appears to have come to pass at the weekend. The only thing I could not have foreseen was that the roasting would come from a man who would ordinarily qualify as an insider, who only a while ago served as the number one banker to the same PDP federal government.

    I have read the 6,232 word critique by Soludo with the rather suggestive headline Federal Government’s economic team weak, selfish. Irrespective of what anyone may say about its timingor the motives behind it, particularly his unflattering characterisation of the administration as ineffectual and self-centred, Soludo is hardly a man you can put away as a nincompoop as far as issue of the nation’s economic management is concerned. His words, conveyed with the profound insight of an insider are not just weighty but authoritative. While I do not here pretend that his views represent any final judgement any more than his critics are also entitled to their own verdicts on the performance of the Jonathan administration, the views, set in the context of the administration’s outlandish claims of achievement, is helpful and illuminating.

    To be sure, it isn’t exactly that Soludo has presented any new facts or stumbled on a serendipity over which Nigerians should be excitable. Yes, he has helped articulate in his own way, some of the economic issues that many Nigerians have at one point or the other expressed their views about. Like a disciplined academic that he is, what he has done is to distil the issues to help in the understanding of the subject which the administration insists on muddling up for reasons that are self-serving.

    The point is that other actors in the preceding PDP administrations have done no less. Nigerians would remember Oby Ezekwesili, who, about this time last year similarly accused the administrations of late President Umaru Yar’Adua and the incumbent President Goodluck Jonathan of squandering’ $67 billion (about N11 trillion) oil money left in two separate accounts by Obasanjo. The same charge would be repeated early in the year by the former President much to the discomfiture of the Jonathan administration. As it appears, the issues would simply not go away.

    I consider the Soludo interjection important for a variety of reasons. That the nation’s one-time banker would re-echo the same charges earlier made operatives of the former administration would seem a measure of their dissatisfaction with the explanations rendered by the hierarchs of the administration. More embarrassing is that Ngozi Okonjo-Iweala, minister of finance actually served in that administration whose top actors are the ones accusing the current one of squander-mania!  It couldn’t get any messier that the lone functionary to whom the management of economy was outsourced to could not even persuade his erstwhile colleagues that nothing is amiss!

    Now, for an administration that has done nothing else than serve Nigerians its endless cocktails of distractions in the last few weeks, it must be said that Soludo has helped in no small measure to change the course of the debate from the banality of muck-raking and character assassination to one driven by issues. Having helped to frame the issues, it is left for the rest of the civil society to pick up the gauntlet.

    Having said that, I must say that the coming days would seem easy enough to predict. With the regime hounds already off the leash, those expecting a healthy contest of ideas on the issues raised by Soludo had better prepared for disappointment! Knowing how the mind of this administration is programmed, I know it won’t happen; rather expect a choreographed demolition job on the messenger. Trust me; if the administration’s legion of netizen warriors have not already set out on the demolition job, it’s probably because they are still reeling in the after-shock of the Soludo put down. For sure, every activity of the CBN under Soludo would come under intense scrutiny. If you ever served in government, you know what I mean: every book under the sun will be opened in the bid to roast their latest enemy in the sun. Contracts signed and sealed several years ago will suddenly become matters of interest. Nigerians should expect some revealing files to suddenly pop up somewhere showing how people who claim to be “Mr Clean” are actually white-washed sepulchres! Remember the unfinished business of Securency International Pty Ltd – the polymer currency people?  Expect findings of ‘great interest’. That is the way of the desperate administration, an administration for whom no boundaries are inviolate.

    Continuity or change? That is the million dollar choice Nigerians are being called to make at this time. A government fittingly described by Soludo as “dominated by self-interested and self-conflicted group of traders and businessmen, and so-called economic team meetings have been nothing but showbiz time”. A government in which “the very people government exists to regulate have seized the levers of government as policymakers and most government institutions have largely been “privatised” to them”? An economy “on auto pilot, with confusion as to who is in charge and government largely as a constraint…where “there are no big ideas, and it is difficult to see where economic policy is headed to”? That is the terrible choice foisted on the nation by the PDP. And now some have told us that the devil you know is better than the saints you don’t know!

    After nearly 16 years of motion without locomotion, if you ask me, I would take a gamble on a different course.