Soludo’s time as CBN gov, a disaster – FG
The Federal Government on Wednesday described the five year tenure of Prof Chukuwma Soludo as the Governor of the Central Bank of Nigeria as a failure and a disaster to the banking sector.
Soludo who was the apex bank governor between May 2004 and May 2009, had on Monday written an article where he claimed that the Nigerian economy under President Goodluck Jonathan had performed woefully.
But the Minister of Finance, Dr Ngozi Okonjo-Iweala while reacting through a statement issued by her Special Adviser Communications, Mr Paul Nwabuikwu said Soludo through his article has committed what she described as “intellectual harakiri.”
The Minister noted that not only was the article littered with abusive and unbecoming language, it shows Soludo, whom she described as an “embittered loser in the Nigerian political space” can get so derailed by misquoting economic facts and maliciously turning statistics on their head to justify a hatchet job.”
She said, “It is a sad day for Nigeria and the economics profession 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.”
Okonjo-Iweala while supporting her argument with statistics noted that the banking sector was practically brought to its knees and required a massive bailout by Nigerian tax payers during the tenure of Soludo.
This bailout which according to her was done by his successor (now Emir of Kano), Lamido Sanusi, cleaned up all the bad debts and transferred them to the newly-established AMCON, from where they are being currently managed.
She said, “There is definitely an issue of character with Prof. Charles Soludo and his desperate search for power and relevance in Nigeria.
“So much of what is written is outright nonsense and self-seeking aggrandizement that need not be dignified with a response.
” It is totally remarkable 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.
“The consolidation of the banking sector was a good policy idea of the (Olusegun) Obasanjo administration but Soludo went on to thoroughly mismanage its implementation leading to the worst financial crisis in Nigeria’s history.”
“So what did Soludo do? After consolidation, 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 fact as every Nigerian knows, 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 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.”
The minister claimed that Soludo singlehandedly mismanaged the banking sector which led to the accumulation of huge toxic assets thus paralysis get the banking sector during the period of the global financial crisis.
The liabilities of the banking sector according to the minister, cost Nigerian taxpayers the sum of N5.67tn to clean up the books of the banks.
She added, “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.
“In fact, the banking sector was brought to its knees and required a massive bailout by Nigerian tax payer
“So let it be noted for the record books 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.
“Let it be noted also that this amount, which 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.
On Soludo’s comments on the mismanagement of the economy and the imposition of the austerity measures, the minister said the cost cutting measures were taken in response to the drop in oil price.
She said despite the challenges, the government had been able to stabilize the economy by keeping inflation rate within the single digit band (currently eight per cent).
This feat, she claimed could not be achieved by Soludo with his Monetary Policy instruments which according to her left inflation rate at 13 per cent per annum when he left the apex bank in 2009.
She said, “This current government managed to control inflation, which he Soludo, was not able to do during his time at the helm of monetary policy in Nigeria.
“When he left the Central Bank in 2009, inflation – which hurts the poor and vulnerable in the society the most – was above 13 percent per annum.
“Now, inflation is at single-digit, at 8 percent per annum. What about exchange rates? Well this administration again managed to stabilize the naira exchange rates, such that between May 2011 and the end of 2014, official exchange rates against the dollar rarely moved out of the N153 to N156 band.
“It is only with the recent dramatic fall in oil prices and the consequent impact on our foreign reserves that the exchange rate has become quite volatile.
” The drop in oil price has been heavy and rapid impacting all oil producing nations significantly. Nigeria is no exception and appropriate fiscal and monetary policy measures are being put in place to manage this situation.
On the drop in foreign reserves which Soludo also alluded to, the minister said this was impacted negatively by lower oil production and crude oil theft along with the refusal to save in the Excess Crude Account.
She said. “It is true that had production been at the previous levels and had there been willingness to save we would have had more money in the ECA and also in the reserves.
“But the overriding setback to savings is that the State Governors felt it was their constitutional right to share the money. Even as we speak the States have taken the Federal Government to the Supreme Court on this issue.”
The Minister noted that the government would not in any way formulate policies that would make the majority of Nigerians vulnerable adding that measures were being put in place to create more jobs for the people.
The Federal Government on Wednesday described the five year tenure of Prof Chukuwma Soludo as the Governor of the Central Bank of Nigeria as a failure and a disaster to the banking sector.
Soludo who was the apex bank governor between May 2004 and May 2009, had on Monday written an article where he claimed that the Nigerian economy under President Goodluck Jonathan had performed woefully.
But the Minister of Finance, Dr Ngozi Okonjo-Iweala while reacting through a statement issued by her Special Adviser Communications, Mr Paul Nwabuikwu said Soludo through his article has committed what she described as “intellectual harakiri.”
The Minister noted that not only was the article littered with abusive and unbecoming language, it shows Soludo, whom she described as an “embittered loser in the Nigerian political space” can get so derailed by misquoting economic facts and maliciously turning statistics on their head to justify a hatchet job.
The Federal Government on Wednesday described the five year tenure of Prof Chukuwma Soludo as the Governor of the Central Bank of Nigeria as a failure and a disaster to the banking sector.
Soludo who was the apex bank governor between May 2004 and May 2009, had on Monday written an article where he claimed that the Nigerian economy under President Goodluck Jonathan had performed woefully.
But the Minister of Finance, Dr Ngozi Okonjo-Iweala while reacting through a statement issued by her Special Adviser Communications, Mr Paul Nwabuikwu said Soludo through his article has committed what she described as “intellectual harakiri.”
The Minister noted that not only was the article littered with abusive and unbecoming language, it shows Soludo, whom she described as an “embittered loser in the Nigerian political space” can get so derailed by misquoting economic facts and maliciously turning statistics on their head to justify a hatchet job.”
She said, “It is a sad day for Nigeria and the economics profession 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.”
Okonjo-Iweala while supporting her argument with statistics noted that the banking sector was practically brought to its knees and required a massive bailout by Nigerian tax payers during the tenure of Soludo.
This bailout which according to her was done by his successor (now Emir of Kano), Lamido Sanusi, cleaned up all the bad debts and transferred them to the newly-established AMCON, from where they are being currently managed.
She said, “There is definitely an issue of character with Prof. Charles Soludo and his desperate search for power and relevance in Nigeria.
“So much of what is written is outright nonsense and self-seeking aggrandizement that need not be dignified with a response.
” It is totally remarkable 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.
“The consolidation of the banking sector was a good policy idea of the (Olusegun) Obasanjo administration but Soludo went on to thoroughly mismanage its implementation leading to the worst financial crisis in Nigeria’s history.”
“So what did Soludo do? After consolidation, 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 fact as every Nigerian knows, 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 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.”
The minister claimed that Soludo singlehandedly mismanaged the banking sector which led to the accumulation of huge toxic assets thus paralysis get the banking sector during the period of the global financial crisis.
The liabilities of the banking sector according to the minister, cost Nigerian taxpayers the sum of N5.67tn to clean up the books of the banks.
She added, “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.
“In fact, the banking sector was brought to its knees and required a massive bailout by Nigerian tax payer
“So let it be noted for the record books 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.
“Let it be noted also that this amount, which 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.
On Soludo’s comments on the mismanagement of the economy and the imposition of the austerity measures, the minister said the cost cutting measures were taken in response to the drop in oil price.
She said despite the challenges, the government had been able to stabilize the economy by keeping inflation rate within the single digit band (currently eight per cent).
This feat, she claimed could not be achieved by Soludo with his Monetary Policy instruments which according to her left inflation rate at 13 per cent per annum when he left the apex bank in 2009.
She said, “This current government managed to control inflation, which he Soludo, was not able to do during his time at the helm of monetary policy in Nigeria.
“When he left the Central Bank in 2009, inflation – which hurts the poor and vulnerable in the society the most – was above 13 percent per annum.
“Now, inflation is at single-digit, at 8 percent per annum. What about exchange rates? Well this administration again managed to stabilize the naira exchange rates, such that between May 2011 and the end of 2014, official exchange rates against the dollar rarely moved out of the N153 to N156 band.
“It is only with the recent dramatic fall in oil prices and the consequent impact on our foreign reserves that the exchange rate has become quite volatile.
” The drop in oil price has been heavy and rapid impacting all oil producing nations significantly. Nigeria is no exception and appropriate fiscal and monetary policy measures are being put in place to manage this situation.
On the drop in foreign reserves which Soludo also alluded to, the minister said this was impacted negatively by lower oil production and crude oil theft along with the refusal to save in the Excess Crude Account.
She said. “It is true that had production been at the previous levels and had there been willingness to save we would have had more money in the ECA and also in the reserves.
“But the overriding setback to savings is that the State Governors felt it was their constitutional right to share the money. Even as we speak the States have taken the Federal Government to the Supreme Court on this issue.”
The Minister noted that the government would not in any way formulate policies that would make the majority of Nigerians vulnerable adding that measures were being put in place to create more jobs for the people.
The Federal Government on Wednesday described the five year tenure of Prof Chukuwma Soludo as the Governor of the Central Bank of Nigeria as a failure and a disaster to the banking sector.
Soludo who was the apex bank governor between May 2004 and May 2009, had on Monday written an article where he claimed that the Nigerian economy under President Goodluck Jonathan had performed woefully.
But the Minister of Finance, Dr Ngozi Okonjo-Iweala while reacting through a statement issued by her Special Adviser Communications, Mr Paul Nwabuikwu said Soludo through his article has committed what she described as “intellectual harakiri.”
The Minister noted that not only was the article littered with abusive and unbecoming language, it shows Soludo, whom she described as an “embittered loser in the Nigerian political space” can get so derailed by misquoting economic facts and maliciously turning statistics on their head to justify a hatchet job.
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