The emergence of Mr. Charles Soludo as Central Bank governor was greeted with relief by many for so many reasons. First, the appointment of a first rate academic economist was a refreshing departure from the previous insistence on ageing bankers. Second, Soludo’s relatively youthful age signified a generational shift or concession in terms of strategic public office appointments.

The latter is significant because ours is a society that rhetorically acknowledges the young as leaders of a tomorrow that we have constantly denied them. For me, the relief was perhaps an offshoot of one’s intellectual origins. I just believe that most human problems are best solved by persons who have spent time going through the rigours of disciplined study in any field of study. 

No number of honorary degrees, chieftaincy titles or Igbosere degrees from these dubious mercantile institutions can compensate for the long years, the painstaking research and the discipline that confers certified knowledge and international competitiveness of persons who went to real schools. Societies fare much better when they entrust their fate in the hands of knowledgeable men and women, not quacks and over decorated pretentious gangsters. This is perhaps why our growing army of ‘witch doctors’ spare no effort or resources in sending their offspring to the best institutions in the world.

Even experience, invaluable as it is, without intellectual preparation has its limits. I just believe that a banker who rose through the ranks no matter the size of the bank he presided over is ill equipped to deal with the complexity of the active mediations in the political economy of today’s nation state and the international system.

By appointing Soludo from a solid academic and consulting background, former President Olusegun Obasanjo was making the decisive and desirable departure that the Nigerian economy needed to escape finally from a tradition of frigid orthodoxy and untutored solutions. We were at last going to join the league of enlightened nations whose central banks are headed by persons with sound economics backgrounds of the highest order like the United States and the United Kingdom to name only the two most relevant.

The expectation was high that a healthy infusion of economic theory informed by practical experience from advising and consulting for more serious governments elsewhere would perhaps correct the errant reflexes of a political leadership rooted in practically no economic or political ideology whatsoever. Somehow that convenient gamble paid off. Both Soludo and his colleagues – Ngozi Okonjo Iweala, Oby Ezekwesili - and the rest were coming from an economic ideology solidly rooted in the post Cold War World Bank and International Monetary Fund (IMF) reformed structural adjustment school (NEEDS). Collectively, they lent the clueless Obasanjo some theoretical credibility and grafted onto his amorphous platform the more respectable refreshing epithet of reform.

For even better effect, Obasanjo had the good sense of appointing a sound economic team except that he stopped short of the US model of a Presidential Council of Economic Advisers. Obasanjo’s economic team was by and large credible even though it contained a handful of economic numbskulls or just plain hustlers who found protective colouration in the larger credibility of the leading lights of the group. Apart from former military president Ibrahim Babangida’s collection of men such as Kalu I. Kalu, Chu S.P. Okongwu, Ojetunji Aboyade, Michael Omolayole, Ibrahim Ayagi, and Obasanjo’s economic team was the closest we came to having a team qualified and equipped and dedicated to thinking about the national economy on a sustained basis.

The arrangement worked reasonably well when Obasanjo’s rough politics allowed their policy positions to hold. We exited the Paris and London Club debt gulags at a time when others were struggling to do so. We reformed the banking system when it was sensible to do so. We ended the era of Chairman/Managing Directors (one and the same person) in our myriad chamber banks. The exchange rate became reasonably stable no thanks to consistently high oil prices. The interest rate remained fairly stable and businesses could at last plan.

Inflation was at a manageable level even though Soludo’s banks did not lend their money to sectors that normally create sensible jobs. The general economic situation was sufficiently attractive for there to be a perceptible increase in foreign investment including homeward integration by the bulging Nigerian Diaspora. Home remittances increased and approached the $6 billion mark. 

We began the process of convincing our people to put their money in the better capitalized fewer banks. Some degree of logic began to be infused in economic decision making. The data and projections from the CBN began to hold water because a sizeable percentage of the money in the system was now in the banking system. Previous policies and projections were mostly enlightened guesswork because most of our money was in the informal economy under tattered mattresses and in unprintable zones of our market women’s bosoms and loins.
Above all and most importantly, we began the healthy process of getting our hapless citizens to invest in stocks and shares as a way of growing wealth and saving for later years.

Knowledge about the potency of investment in stocks which had hitherto been the exclusive preserve of the few permeated the market place and ordinary people began to boast about the size of their portfolios.

Arguably, the banking consolidation and the phenomenal growth of the stock market were easily the highest achievements of the economic team inspired by Soludo’s more informed approach to economic matters. It is a tragic irony that just a few months before the end of his tenure at the CBN, Soludo is presiding over the unravelling of his own miracle. This is a typically Nigerian malaise: revolutionaries that feed on their own entrails and offspring.
Soludo used to be an oracle on economic matters because his pronouncements resonated with certainty and logic. But these days, not too many people believe him. When the stock market began to head south, his was one of the voices that tried to reassure Nigerians that all was well. When we woke up overnight to find that the naira in our pockets was becoming useless a few weeks ago, Soludo blamed it on speculators. He echoed Mr. George Bush’s Republican mouthpieces by reassuring Nigerians that ‘the fundamentals’ of our economy remained sound and that the ill wind of economic meltdown would pass us by. Above all, he insisted that the banks, his pet projects, were rock solid.

In more recent times, indications abound that Soludo may in fact have known a few things than he is willing to admit. He has just restricted the advertising budgets of the banks, specifying the kinds, sizes and positions of advertisements that the banks are permitted to place. He may well be within his rights as the regulator to tell the banks how not to spend our money. But there is an awful lot that is wrong with the banks that Soludo has not had the courage to talk about.

Nigerians would be more interested in knowing who pays for the private jets that are known to belong to a few of our bank chief executives. How much does each legitimately earn? What is the structure and criteria for the stock options that our bank CEOs award to themselves? Why do our bank CEOs need fleets of bullet proof cars, some with price tags in excess of N50 million apiece and a retinue to armed goons? Who is paying for the private yachts belonging to some bank CEOs moored in the waterfronts in Lagos? How much information about imminent policy changes filters to our bank chiefs well in advance and who profits from these insider knowledge?  If we look closely at the structure of executive pay in our banking system, we may discover that the cap of $400,000 per annum that President Barack Obama specified for banks receiving bailout funds from the US government is a joke compared to what our local bank chieftains are fleecing off their hapless shareholders and customers. And yet, our total foreign reserve is less than the amount of money in the endowment fund of Harvard University!

The truth is that the Nigerian banking system which accounts for an estimated 67 per cent of activities in the economy is on a permanent bailout by the public sector. The monthly revenue allocation that Abuja writes for the states and local governments fuels the banks. That is why our banks are the first to take out lavish birthday congratulatory adverts for state governors of their choice. I wouldn’t know whether Soludo has followed these advertisements. I am aware that he has attended nearly all the dodgy foreign awards and recognitions of our banks by foreign banks and publications. He has been awarded and recognized himself and he allowed the banks to take out lavish advertisements to congratulate him, not to talk of those five star dinners and receptions.

May be Soludo has just realized that the CBN under him was complicit in the grand deception of the Nigerian public that led to the collapse of the stock market. All the banks that went for IPO published impressive statistics of their performance and profitability projections. How many of these claims were verified by the CBN? It was not just enough to leave the IPO process in the hands of SEC and the NSE. The business of testifying to the profitability of the banks belongs squarely to the CBN. As it turns out, Nigerians were duped by the banks who took court money under the serial IPO scam and still went ahead to erode the stock market through dubious margin lending.

That’s not all. Soludo’s CBN required Nigerian banks wanting to participate in the management of the nation’s foreign reserves to hit the $1 billion mark. An additional requirement was that these Nigerian banks partner reputable international banks like Lehman Brothers, Merrill Lynch, and UBS etc. A few of them met these requirements and were duly allocated funds to manage. But some of these partner banks have since gone under in the wake of the collapse of the international (especially American) banking system. No one has told Nigerians what percentage of our external reserves has been affected by this dislocation.