Jonathan, Soludo and Central Bank of Nigeria
Prof Charles Chukwuma Soludo, former governor of Central Bank of Nigeria and former governorship aspirant in Anambra State, is in the news again for the wrong reason. Recently, he declared that former President Goodluck Jonathan ran the Central Bank of Nigeria in manners akin to that of Uganda’s late dictator, Idi Amin. Soludo did not fall short of accusing Jonathan of ordering the CBN to ‘print’ N3 trillion, he further described the CBN as ATM under Jonathan. Such an unsubstantiated grave allegation from a man like Soludo is, indeed, worrisome. That a man of Soludo’s status would condescend so low, is a sign of the decline and amnesia that has gripped the political class in the past eight months.
Apart that such unguarded outburst is false, the timing is instructive. In the months prior to the appointment of ministers by President Buhari, Soludo was so desperate to be noticed that he suddenly became vocal. His nearly endless tirade against Dr. Ngozi OkonjoIweala, Nigeria’s immediate past Minister of Finance and Coordinating Minister of the Economy, is legendary. Despite all efforts, Buhari settled for someone who by her deportment is timid and easily malleable than a Soludo. After having missed that opportunity, and with
After having missed that opportunity, and with rumour that the job of the CBN Governor, Godwin Emefiele, is hanging in the balance, Soludo decided to remind Buhari that he is still jobless by criticising Jonathan for just anything. However, a look at Soludo’s leadership of the CBN between May 29, 2004 and May 29, 2009, leaves much to be desired. Commentators and analysts have described that period as the darkest in the history of Nigeria’s banking sector It is no longer a secret that the banking consolidation exercise as “arranged” by Soludo was designed to favour certain big banking executives close to him.
The palpable recklessness of these executives were overlooked by Soludo as he allowed them to use depositors’ money to purchase their own shares thereby giving a false impression of the banks’ worth. The resultant effect was the death of these banks and the subsequent crash of the capital market. Sanusi, the governor that succeeded Soludo in office, in a paper titled “The Nigerian Banking Industry: What Went Wrong and the Way Forward”, which he presented at the convocation lecture of the Bayero University, Kano, in 2010 had this to say: “A lot of the capital supposedly raised by these so-called ‘mega banks’ was fake capital financed from depositors’ funds.
Thirty per cent of the share capital of Intercontinental Bank was purchased with customer deposits. Afribank used depositors’ funds to purchase 80 per cent of its IPO. The CEO of Oceanic Bank controlled over 35 per cent of the bank through SPVs (Special Purpose Vehicles) borrowing customer deposits. The collapse of the capital market wiped out these customer deposits amounting to hundreds of billions of naira.” Sanusi spoke plainly in indicting Soludo in all these scams. He accused Soludo of running the CBN in “laissezfaire” fashion, personally setting up board agendas to reflect only his “priorities”.
Some of the banks then engaged in manipulating their books “by colluding with other banks to artificially enhance financial positions and therefore stock prices, adding that practices such as converting non-performing loans into commercial papers and bank acceptances and setting up off-balance sheet special purpose vehicles to hide losses were prevalent”. Soludo should come clean on how much he made from the fraudulent bank executives, some of whom have been convicted by the courts, for deliberately looking the other way while these executives circumvented banking rules with reckless abandon right under his watch. Sanusi, in that paper, also revealed how one bank borrowed money and purchased private jets which were later discovered to be registered in the name of the bank CEO’s son.
In his article in Sahara Reporters of March 2010, Comrade Ikenna Osuwa rightly declared that Soludo’s “…exit as CBN helmsman has gathered more opprobrium than the exit of any other public servant in the last ten years”. Apart from the N256.571bn that was serially borrowed from CBN in the last two months of Soludo’s reign, his tenure left the banks with a whopping N9 trillion toxic debts.
Soludo’s time at the apex bank was characterised by a plethora of industry damaging practices like non-peforming loans, poor corporate governance practices, weak credit administration processes, absence or non-adherence to the banks’ credit risk management practices, significant capital impairment which were all clear evidence of corruption (apologies to Ikenna Osuwa). The man who supervised corruption of such magnitude is supposed to be penitent and not shamelessly bullish while falsely accusing others. Soludo’s tenure as CBN governor should be probed so that never again shall we have an Idi Amin as our CBN Governor!
