Jonathan, Soludo And The Real Idi Amin That Ran The CBN
Prof Charles Chukwuma Soludo, former governor of Central Bank of Nigeria and former governorship aspirant in Anambra State, got the nation anxious again when he declared in a no-holds-barred manner 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 the former president of ordering the CBN to ‘print’ say, N3 trillion under the guise of creating an intervention fund for national stability but which is eventually doled out to prosecute an election campaign or just about anything the president fancies. He further described the CBN as the presidency’s ATM under Jonathan.
Such an unsubstantiated grave allegation coming from a man like Soludo is, indeed, worrisome. That a man of Soludo’s status would condescend so low, throw caution to the wind, jump on the bandwagon, play to the gallery and take advantage of the political situation in Nigeria to make spurious allegations unscrupulously against the former president is a sign of the decline and amnesia which has gripped our political class in the last eight months.
Apart from the fact 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 in condemning the immediate past administration and accused them of just anything that tickled his fancy all in a bid to get Buhari’s attention. His nearly endless tirade against Dr Ngozi Okonjo-Iweala, Nigeria’s immediate past Minister of Finance and Coordinating Minister of the Economy, is legendary. Despite all his efforts, President Buhari overlooked him and settled for someone who by her deportment is timid and easily malleable than a Soludo who is brash, rash, abrasive, confrontational and does ITK (I Too Know).
After having missed that opportunity, and with the growing rumour that the job of the current CBN Governor, Godwin Emefiele, is hanging in the balance following the shambolic state of our economy and the continued slide in the value of the naira, it is time for Soludo to remind Buhari that he is still jobless and quite available for the CBN top job, and the only way to do this since he does not have direct access to the president is to criticise the past administration for just anything that would make him sound as being in the same boat with the president and his men, and probably be considered for a job in the current administration.
However, a look at Soludo’s leadership of the CBN between May 29, 2004 and May 29, 2009, when he held sway there leaves much to be desired. Many renowned economists, bankers and analysts have described that period as the darkest in the history of our banking sector. It was that type of darkness that is shaded by the deceitful fleeting light from a reflective silver coin dangling under the midday sun – it was nothing but a charade, a facade, to deceive while our commonwealth was blatantly frittered away in a most unconscionable manner by “Cowboy” bank executives right under the watch of the equally exuberant CBN governor, Charles Soludo, under the guise of an ill-intended banking consolidation exercise.
It is no longer a secret that the famous banking consolidation exercise as “arranged” by Soludo was designed to favour a certain big banking executives who were very close to Soludo then. The palpable recklessness of these executives and others 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 and artificially increased the value of these banks in the capital market. The resultant effect was the death of these banks and the subsequent crash of the capital market leading to millions of Nigerians losing their stocks without warning while thousands others lost their jobs in one fell swoop in the process thereby leaving many families traumatised even up till today.
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. 30 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 did not mince words in indicting Soludo in all these scams as he declared that the capital verification process of the CBN targeted at avoiding bubble capital at the beginning of the consolidation exercise was stopped by Soludo for unexplained reasons. He accused Soludo of running the CBN in “laissez-faire” 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”. Such a monumental fraud!
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 Soludo’s watch to the extent that they “lent money to themselves for stock price manipulation and purchase of estates all over the world”. Sanusi, in that paper, also revealed how one bank borrowed money and purchased private jets which were later discovered to be registered in the bank CEO’s son. He also revealed how the management of another bank set up 100 fake companies for the purpose of perpetrating fraud. Soludo gave tacit approval to theses banks’ frauds as perpetrated by the executives while they drained our economy dry because those involved were Soludo’s paddy paddy!
In his article that appeared on Sahara Reporters in 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 said to have been serially borrowed by banks 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 banking industry is yet to recover from the shockwaves Soludo’s alleged conspiracy with corrupt bank executives sent to the very foundation of the industry in their ignoble act of deliberately rocking the banking boat of Nigeria. The man who supervised corruption of this magnitude is supposed to be penitent and not shamelessly bullish while falsely accusing others.
Lastly, and in line with this administration’s fight against corruption, Soludo’s tenure as CBN governor should be probed so that never again shall we have an Idi Amin as our CBN Governor!
[email protected] ; Twitter: @stjudendukwe