National Development Strategy Series: Soludo’s Misinformation

Jonathan vs Buhari Rejoinder

FIRST of all let me restate my credentials for those of you that do not know me, I am not a public official, I have never held public office and I have been passionate and focused on one general area of National Development, with four specific focus pillars, for the past five years, and these are Leadership Development, the promotion of and the equipping of Entrepreneurs, as well as the fundamentals and the resources for the empowerment of the Nigerian Women and Youths. So I like to think that I have become an expert on these subjects in the last five years as I live and wake up every morning thinking of nothing but how to reposition our Micro, Small and Medium Businesses, how to develop our Women and Youth owned businesses and how to support our Leaders to get the right tools, the ideas and the resources they need to make things happen for Nigeria in general and for these groups in particular. You will not find me taking on our established authority because they have not done things my way or because they have made some mistakes. I believe there are better ways to get my voice heard and I have access to the certain decision makers so I get my voice heard in that way, and in some cases I write my opinions in public forums without violating the rights of those I seek to advise. I know that my way or my ideas may not be the best way and I also know that everyone and I mean every one, including Prof Chukwuma Charles Soludo makes mistakes. So I seek understanding first, rather than to condemn others. 

When I was very young our teacher would always carry out what she called the “MINDSET” experiment. I am sure a lot of you are familiar with it. She would pour water into a glass and stop at the half way mark and ask us “is this cup half empty or half full?”   I was always the half full guy in the class room. And I would hold onto that position all through my education and all through my life, and I am still now the half full guy in the room. I am an unapologetic opportunist. I see great things happening for Nigeria and those that are not happening yet I still see the positive aspects and potentials that these things will happen, given enough time. So you can tell how disappointed I was when I read the article by Prof Chukwuma Charles Soludo on the performance of President Goodluck Jonathan and this administration. There were so many things wrong with that thesis, to say the least, it was the strategic way in which Prof Soludo designed it to look objective, but it was full of personal attacks and petty issues, you will have to have a strategic mind or you may have to read it a number of times before you can catch what I am talking about, so I will break it down for you in this paper. 

Prof Chukwuma Charles Soludo

I must first of all confess that Prof Soludo is a great man and a very intelligent scholar. We were lucky to have him as our Chief Economic Adviser to the President and subsequently Governor of the Central Bank at the time he served. Anybody that reads my write ups will agree that I, only a few weeks ago wrote a very objective article on the performance of Prof Soludo and Hero in him that saw to the banking consolidation revolution, which ushered in a new era in Nigerian Banking and which was what was needed at that time. However, the point is that times change and whereas Soludo was needed at the time he served as Central Bank Governor to drive the process of building mega Banks in Nigeria, it was Sanusi Lamido Sanusi as Central Bank Governor, currently the Emir of Kano, that was needed to clean up the mess that resulted not long after the consolidation, in which many of the Super Star Commercial Bank CEOs who now had access to monumental volumes of cash as a result of the successful consolidation policy started behaving like kids in a candy shop and went on insider borrowing sprees that nearly brought down our economy. Sometimes it scares me to think what if President Yar ‘adua had actually renewed Prof Soludo’s tenor. Considering his cozy relationship with these super star CEOs of Banks, would he have had the courage or the will to rein them in? That is a discussion for another day. Let me look at his paper for a second. 

Strategic Intent

I first started by asking myself what was Prof Soludo’s Strategic intent on writing that paper. And with all due respect to the Professor whom I have had the highest levels of respect for, I think his strategic intention was to misinform the Nigerian people. And this is why I say so.

There is something in military and diplomatic circles known as counter intelligence. On one hand Intelligence is when you gather information and provide it to decision makers on strategic aspects of your opponents or competitor’s plans or activities. And in this case your opponent or competitor may be a foreign Government, a competitor company or an adversary in the work place etc. On the other hand Counter Intelligence is when you deliberately misinform the other side by providing them with information that they believe to be intelligence, they believe to be true and they will go out and act on it. Prof Chukwuma Soludo’s article was an attempt at Counter Intelligence because some people who do not know may actually believe him and go out and vote based solely on what they believe to be true, as narrated by Prof Soludo. And from my analysis not much of what he was saying was credible, much of it was simply not true and in some cases he straight out lied to us. 

Soludo’s Contradictions 

Opening Statement: He started out by saying that he has been traveling the World and only on occasion does he followup on Nigeria’s affairs. I felt that was rather condescending. He is a Nigerian and the international community only respects him because of the strategic roles he played as Nigeria’s Chief Economic Adviser and Governor of Central Bank. So I would rather see a more Statesmanship approach to his and others like him, when they write about Nigeria, especially as they call themselves our Leaders. The World will read what you write, Nigerians will read what you write so please our Leaders, our fathers, our mothers and our big brothers and sisters let us treat Nigeria with much more respect. 

Savings: Prof Soludo went on about how ineffective saving as a Government is when people are hungry. He said His Excellency Peter Obi missed the point in his savings approach to Governance. However the same Prof Soludo in the very same article says that he did a great job by saving Nigeria $45 billion when he was Governor of the Central Bank. Fellow Nigerians as Governor of the Central Bank you are also an economic adviser to the President and the Federal Government, if Prof Soludo by his own admission says that Governor Peter Obi did wrong to save money for future Governments of Anambra State, and by definition Soludo does not believe in saving then why did he not advise President Obasanjo to spend all our foreign reserves? His Excellency Peter Obi can defend himself, however I know that with the exception of Governor Fashola, Peter Obi is still considered one of the most effective performing Governors in the history of Nigeria’s State Governments. And Soludo can NEVER take that away. 

Price of Crude Oil: Prof Soludo talked about the price of crude oil when he was Governor of the Central Bank and I have checked, prices stood at about $46 a barrel in May of 2005, climbed to and hovered around $60 to $70 for most of 2006. Prices fell below $60 early in 2007 but climbed to an unprecedented $80 by November 2007 and then all the way up to $140 a barrel by early 2008, which it maintained that price a while before it fell again to the just above $45 in late 2008 and it subsequently rebounded in early to mid-2009. There are a lot of reasons for the oil price to be bouncing up and all over the place and none of those reasons have to do with the skills of the President or his Economic Managers. In actual fact, the present oil price fall is as a direct result of four major issues. First of all, there is over supply coming from mostly OPEC countries, especially Saudi Arabia, UAE etc. and the Shale Oil fracking companies in the United States, this over supply is putting a lot of pressure on the international price. Secondly, there is so much investment going into alternative energy with the German Government investing over $1.4 Trillion, yes you read it right, $1.4 trillion dollars in the largest energy project in the World nicknamed the “Stromautobahn”, which is a combination of wind turbines that will harvest power from the winds out in the sea and supply it to the heart land of the Germany’s industrial base.In addition, the European Union has called for a 35% target for all NATIONS of the EU to get their Energy from renewable resources by 2020. German has set a more ambitious target of 80% of its energy to come from renewables by 2050, and they have put their money where their mouth is, with the $1.4 trillion Energiewende (German Energy Revolution) project, which has been nicknamed Stromautobahn.Thirdly, there is so much pressure on Russia from sanctions being imposed by the west that Russia is willing to sell its crude at any price. And finally the only growth market for crude oil in the World today is Asia, especially China and India and both Nations are slowing down their consumption of crude oil due to the slowdown in the demand for their products and services from their European customers. I believe Prof Soludo should know all this, so why does he pretend that he doesn’t? The exchange rate of our currency will continue to depend on our ability to earn more foreign currency and so we need to expand our ability to earn by expanding our exports, as long as we depend on oil for foreign exchange our naira will rise or fall in relation to the price of the crude oil. 

Rebasing of the Economy: Prof Soludo made a caricature about the efforts to rebase Nigeria’s economy and said in his article it amounted to nothing. He made bold to say that on all the indices used by international reviewers Nigeria’s economy is showing poor results, he went as far as to score the Administration an “F” on the economy.  On this I cannot be more ashamed of Soludo, than to say this. Prof Soludo lied to the Nigerian people. Hear him; “First, my friend was educated that re-basing the GDP is no achievement: it is a routine statistical exercise, and depending on the base year that you choose, you get a different GDP figure.  Re-basing the GDP has nothing to do with government policy”. First of all he is full of contradictions, he says we have failed to make progress on any of the economic indices, then he says in the same thesis that our over $510 billion GDP economy is not progress, (he used $540 billion in his article). He even went as far as to say that the rebased figures of the economy is NOT as a result of any Federal Government Policy in the statement above. Again he is dead wrong. The figures that gave the Nigerian economy a boost after the rebasing came from the fact that new industries have been created and have grown in Nigeria since the Administration of President Goodluck Jonathan. The Entertainment Industry that is presently employing highest number of young people in Nigeria outside the Agriculture sector is a big one. It has never featured in the calculations in our Gross Domestic Product before the rebasing. And for the benefit of those who do not know, our GDP is calculated by summing up or totaling all the goods and services bought and sold in financial transactions in the economy in a given year. So, is Prof Soludo saying that the millions of naira that are being earned by Don Jazzy, Banky W and P square, by Omotola and Ramzy Noah are not real? That the N120 million earned by “30 days in Atlanta” the Movie is not real? That the hundreds of United States citizens, especially their young people I have personally heard singing along to the tune “Dorobuci” after they have purchased the song on iTunes is not real money? The fact that Radio stations in the USA, and I have personally witnessed this, are playing Nigerian music to their American audiences, and stimulating purchase orders, for Nigerian music, which in turn is fueling a new export industry for Nigerian entertainment, is no longer a fact? 

   What about the Internet and the Telecommunications industry, which is an economy in itself. It also was a major part of the rebasing of the GDP, as this industry did not exist as a basis for previous calculations of our GDP. And whereas the Telecommunications Revolution was started by President Obasanjo as even I have pointed out in previous write-ups, it was President GoodluckJonathan that hasconsolidated the Telecommunications industry and provided additional policy support for it to keep growing, there lies the justification to include it in the GDP calculations, hence the need for rebasing the GDP. So, is Prof Soludo saying that the over $6 billion that the four GSM telecommunications firms are earning every year is not real? Or that the Value added services industry, which was built on the back of the GSM industry and ispresently worth over $1 billion a year  is also not real? Is Prof Soludo saying that over one million recharge card resellers that are presently in every village across Nigeria are not real and that the money they are earning and using to feed their families does not exist? I think Soludo should rethink his position on the rebasing of the GDP, as he is misinforming the Nigerian people and he is being disingenuous. 

Debt Relief and Domestic Debt: Again, with all the respect I had for Prof Soludo I cannot understand why he would say the things he said about management of our debt. After reading the article again, I then noticed very clearly why his words cannot be trusted. He made it very clear that the debt relief and buy back carried out by the President Obasanjo Administration was a great thing. However, I combed the thesis to find anywhere he gave credit to where credit is due, and I did not find it. So Prof Soludo has suddenly developed selective amnesia. He has deliberately forgotten that the architect of the Debt relief and the driver that made it possible is the present Coordinating Minister of the Economy, Dr. Ngozi Okonjo Iweala and for which she was appointed Managing Director of the World Bank in recognition of her outstanding achievement as Minister of Finance for Nigeria at that time. Why would Prof Soludo fail to point this out? In any case, I believe he was being disingenuous and I don’t think anybody else should trust his words. And in talking about domestic debt, Prof Soludo knows very well that prior to 2004 Nigeria did not have a domestic debt market. The Federal Government of Nigeria had stopped issuing bonds for over thirty years. I as the Chief Strategy Officer of the Nigerian Stock Exchange was one of those who made elaborate presentations to him and to other members of the Federal Government in 2004 on the need for the Federal Government to develop a domestic debt market. We made the case that private companies could not issue bonds until the Federal Government issued bonds as this would set a bench mark. The Federal Government listened and they have since been issuing Bonds through the Debt Management office and now Prof Soludo says it is all wrong. I cannot take on the argument on domestic vs foreign debt in this paper, but I will in the future. However, I will say this, domestic debt is far better than foreign debt, and even if the buyers of the bonds issued are foreigners, they the foreigners know that the bonds were issued according to certain domestic rules of issuance and so they are well aware of the risk of investing in Nigerian debt. It is on the basis of this that many of our Banks have been able to issue bonds internationally and many corporations have issued commercial paper internationally and are warming up to issue bonds as well, Prof Soludo would rather see all this come to a halt with the resultant negative effect it would have on millions of Nigerian jobs. In any case, a lot of the debt now on the books of Nigeria as domestic debt includes the billions of dollars used to restructure the bad debt created by his friends in the banks that SanusiLamidoSanusi had to rescue by getting CBN to set up AMCON, in association with the Federal Ministry of Finance. I wonder why he is talking in this way, whose side is Prof Soludo on? He is clearly not on Nigeria’s side in this matter of domestic debt issuances.

Speed Bumps to reparation of foreign earnings: Someone should tell me I did not read Prof Soludo state that he placed some speed bumps on the road to the reparation of foreign earnings from investments made in Nigeria by foreigners. Again he lied. In fact, under Prof Soludo, the ability of foreign investors to take out their earnings in dollars was never so easy. Many of the telecommunications companies took out billions of dollars in the days leading up to the financial meltdown in 2008 and it went on till May of 2009.  In fact, after the meltdown the new Governor of the Central Bank, Sanusi Lamido Sanusi in August of 2009, hired me as a consultant to the Central Bank to determine the link between the financial meltdown, the fall in the capital market and the reparations of foreign investments, as he felt they were all linked and tied together. We spent hours debating it in his office and I was mandated to provide solutions on how the Banks could lend money to the capital markets safely in the future, as these solutions would assist the Central Bank, the Securities and Exchange Commission and the Financial Services Regulatory Coordinating Committee (FSRCC) to implement new rules. I did my job. And I pointed out to the Central Bank Governor and the FSRCC at a full meeting, that it was the Global financial meltdown that led to the meltdown of the Nigerian Capital market, because international Fund managers were taking their money out of Nigeria, and this in turn led to the near collapse of the financial system and the collapse of many Banks. Many international fund managers rushed to take their investments out of Nigeria as a way of augmenting their losses in their home markets. I pointed out to Sanusi and the FSRCC, that internationally, Governments and Central Banks tend to slow down the process of reparation of foreignearnings when they see that there is a rush from outside investors and that our Central Bank under Soludo did not do this. In fact, I went further to say that what Nigeria experienced in 2008 was nothing but a “Run on the Bank” by foreign fund managers, the Central Bank of Nigeria in this case being the bank that was rushed. And the Central Bank Governor then, Prof ChukwumaSoludo did nothing to stop the run on Nigeria, I guess he felt we had the reserves, which we did, but he did not see the resultant effects on other parts of the economy. I went further to explain that it was this run on the CBN by Foreign Fund Managers taking out their investments from the Stock Exchange, and the CBN having to provide the resultant foreign exchange that led to the fall in the Nigeria capital market, which put pressure on margin loans that our commercial Banks had lent to the capital Market operators, which in turn led to the crisis in the Banks, as the loans could not be paid back. This crisis further fueled the selloff in the Nigerian Stock Exchange, which in turn caused a panic and a bandwagon effect, which had much larger implications for the wider Nigerian economy, and sure to the wide spread failure of many companies, many banks and the loss of hundreds of thousands of jobs. The Central Bank under Sanusi Lamido Sanusi thus mandated me to develop some new rules and guide lines for the participation of commercial banks and lendingin the capital market in the future. I did that, we called it “Margin Lending Guide Lines” and the Central Bank in association with the Securities and Exchange Commission issued it for both the Banks and the Broker/dealers of the Stock Market. 

   This history is important because Prof Soludo was Governor of the Central Bank for 2007, 2008 and he left May 2009. So he was in charge when billions and billions of dollars were demanded by foreign investors and they got it, and he did nothing to stop them or to slow down the process of their exit. Yes we could afford to pay them and it was their right to get their money, however, either Prof Soludo did not know, he did not understand or he did not care about the linkages between foreign currency reparations, which he allowed to happen, the stability of the Nigerian Stock Market and the wider stability of the financial system, and by definition the Nigerian economy, which was brought to its knees as a direct result of Soludo’saction or should I say inaction.  He was therefore responsible for the hundreds of thousands of job lost as well the over N5 trillion in bad debt that AMCON is presently restructuring and managing. 

Economic Team: I wonder why all of a sudden Prof Soludo is trying to remind the Nigerian people that the constitution provides some specific roles for the Vice President. We know that there is and there has always been a National Economic Council, however Prof Solodu failed to mention that the Council is an Advisory Council and not an implementing agency. It is set up to advice the President and that is that. The President may choose to manage the economy in any way he feels fit as Prof Soludo rightly pointed out very clearly, that the President has the mandate of the Nigerian people, even though Soludo was being mischievous by saying it is a joint mandate, it is a joint ticket, yes but it is not a joined mandate Prof Soludo, you should know better. The National Planning Commission is again a planning body and not an implementation body. It has many agencies that preform supporting roles for planning, including, but not limited to the National Bureau of Statistics. As for the National Council on Privatization its role is very clear in the law that set it up. And there is no issue here as to how it is managed and what we expect from its performance. I still do not see why these were mentioned at all in Soludo’s thesis. Maybe I am a bit slow, but I will give Prof Soludo the benefit of doubt that he was not trying to knock heads together in the Federal Government at this most critical time when all hands must be on deck and we are just a few days to a national election. 

The Economy: And just in case the so-called Professor of Economics, Soludo and those who agree with him continue in their self-delusion that President Goodluck Jonathan has done nothing and his Administration has failed on the economy, I refer them to the CNN Money web site (or twitter @CNNMONEY) in which a team of World Class analysts have rated all the economies of the World and have stipulated that Nigeria will be among the top three economies in the entire World in terms of growth for 2015. After China and Qatar. Where China will grow that 7.3%, Qatar 7.1% and Nigeria 7%. I wonder who made this happen. 

IN conclusion Prof Chukwuma Charles Soludo has disappointed me. As a younger brother that used to look up to him, I felt rather betrayed by the lies and contradictions in his thesis. It is obvious that he has personality issues with some of the players he mentioned as well as with some he did not mention. However, I would have expected him to stick to the facts and not make up facts of his own in order to bring people down or to rewrite history. And I would like to point out that people on his level of national accomplishment and recognition should learn how to speak more accurately. For instance, saying that 95% of the voting population has made up their mind on who to vote for is simply not true, I wonder where he got those statistics from. Most of the polls I have read say that we have between 33% and 35% of the voting population that is still undecided, which means that the election can go either way. So the results will come down to the wire and one strategic push in the final days to the election could tip the balance in favour of the one or the other candidate. 

   In addition, Prof Soludo and others like him need to be reminded that since May 1999, Nigeria has been ruled by the PDP. We did not have an Obasanjo Political Party, it was the Peoples Democratic Party that ruled, while President Obasanjo was in power and so it is wrong to try to separate the continuity in governance. The great achievements of Debt Relief, Telecommunications, Banking Consolidation, Amnesty Program, more recently Transportation and Rail reforms, Pension Reforms, Agriculture Revolution, AlmaJiri education, Mortgage and Housing reform, Power reform, Nigeria Content revolution, the list is endless are all achievements of the PDP controlled Federal Government of Nigeria in which our Presidents were either President Obasanjo, President Yar’adua or President Goodluck Jonathan. And whether Prof Soludo likes it or not he served the PDP controlled Government and is now a part of the PDP legacy. 

We now know where Prof Soludo’sympathy lies, and it is inconsistent with his party APGA. His arrogance, misinformation and double talk tells me that we in Anambra State are lucky he never became our governor.  

Nicholas Okoye is the CEO of ANABEL GROUP, Founder of EMPOWER NIGERIA and the convener of the Nigeria Leadership Summit.