Soludo: How much consolidation, boom should we expect?

Make no mistake, Prof Charles Soludo has longed for this opportunity for 13 years since he left the Central Bank of Nigeria on May 29, 2009, at the age of 48. Now that the good people of Anambra have given him this golden opportunity, it is left to him to prove his mettle as a […]

Make no mistake, Prof Charles Soludo has longed for this opportunity for 13 years since he left the Central Bank of Nigeria on May 29, 2009, at the age of 48. Now that the good people of Anambra have given him this golden opportunity, it is left to him to prove his mettle as a professor of economics. Anambra people are renowned for their enterprise, so they sure deserve the profile of Soludo as governor, but as Soludo himself knows, the charisma of the sheriff does not change the price of crayfish in the Onitsha market; it takes diligent execution of the right strategies to win a chess game.

The expectations are high, and perhaps the governor has exacerbated it not just by his profile, but also his actions when he appointed Dr Oby Ezekwesili to lead a transition committee of 80 professionals, including several professors, despite taking over from Governor Obiano, who is of the same political party, APGA. I quote a friend: “I am impressed by the calibre of people he has assembled, but I am equally afraid of turning this into a theoretical charade of some sorts. This is Anambra and this is Nigeria, orthodox theories don’t work and I hope our professor governor knows. Our expectations are high and the least he can do is to meet them.”

Interestingly, Soludo himself knows he has a lot of work on his hands beyond just paying salaries to public servants and building an airport, and even if he did not know before the election, the 120-page transition report should have given him an idea of the reality.

From rising insecurity to weakening economic fortunes and social order, the challenges are obvious and Umunne m Ndi Anambra do not take excuses, rather they are yearning for results in the form of good governance that delivers mutual prosperity to all, as expected of a democratic dispensation. And like Soludo himself noted at his inauguration, “I applied for this job. My party, the All Progressives Grand Alliance (APGA) shortlisted me, and you, Umunne m Ndi Anambra, interviewed and employed me with Chief Dr Onyekachukwu Gilbert Ibezim as my deputy.”

Obviously, he was not forced to take the job, rather he applied for it and one good turn deserves another; the people of Anambra have given him a job, now is the time for him to prove his worth.

Well, it is not the first time Soludo would be a governor, if we are to go by the title of his position as the head of the country’s central bank between June, 2004 and May, 2009. It is a period to remember for good, as the history of today’s banking sector lies in his consolidation reform when he pruned down the relatively weak 89 banks to strong 24 lenders. While many will say the regime at the central bank enjoyed the complement of relevant fiscal policies, the records of his policies remain praiseworthy. From exchange rate management to inflation and interest rate policies, Soludo truly proved he is an economist with a badge of honour. But the dynamics of being the CBN governor with vast resources and relative independence or autonomy is completely different from the intrigues of his new job as the chief executive officer, chief economist and chief security officer of Anambra State.

In an interview with me in 2003, while he was still serving as President Olusegun Obasanjo’s chief economic adviser, Soludo said of the economic reforms embarked upon by that administration and the criticisms that trailed them: “Some time in the future, this era will be seen as the time when Nigerians turned the bend. We are not expecting any applause, and probably, none will come.”

He is in a similar situation today as governor of Anambra State. He has taken up the new challenge with his toolkit well-stocked to give his Umunne na Umunna a lease of life based on a new paradigm. Soludo the reformer has to repeat his turnaround miracle, this time at the state level.

Shortly after that interview, Soludo was appointed the governor of CBN by the man who he had advised on economic matters. There he elevated the reforms of that administration to what became known as the banking sector consolidation.

Truly, for the Nigerian banking sector, July, 2004, remains one of the tipping points for the industry, and many believe that if not for the consolidation reform, we possibly would not have up to a dozen of those weak banks today. It was on the sixth of that month that he delivered his speech on “Consolidating the Nigerian Banking Industry to Meet the Development Challenges of the 21st Century”.

Interestingly, while we all enjoy the gains of the banking sector reform today, and everyone – depositors, shareholders and other stakeholders – believes it is one of the best reforms ever executed since the return to democratic rule in 1999. There were teething pains at the time. The NDIC took over a few banks that could not recapitalise at the time, shareholders of such entities lost value and depositors had to face the challenges of getting their liquidation dividend from the NDIC, but the rest is history and everyone is better off today, with stronger Nigerians banks that can finance businesses and large projects such as the Dangote Refinery, and Dangote Fertiliser Plant. How policies change things!

As he announced at the inauguration, himself and his deputy are committed to building a new socio-economic order, with short-term pains but with a guarantee of a prosperous future. Perhaps preparing the minds of the good people of Anambra, he noted that the resources available to him are lean, but of course, as a professor of economics, he is well aware of the fact that resources are always scarce, so he just has to do some magic for the good people of Anambra to sustain their loyalty to him. The earlier he does that quickly, the better!