1.  Soludo’s Self-Serving Article on Economic Management is Deficit in Facts, Logic and Honour  - by Paul Nwabuikwu

2.  Soludo’s Misinformation – by Nicholas Okoye

3.  Chukwuma Soludo: Serving a diet of half truths, outright lies and self serving propaganda – by Temi Jack

4.  Voice of Obasanjo, Hands of Soludo; A Rejoinder to Prof. Chukwuma Soludo –  by Daniel Essien

5.  The CBN And Soludo’s Ponzi Scheme  - By Odilim Enwegbara



(Response to “Buhari Vs Jonathan: Beyond the Election, by Charles Soludo”)

1.     For anyone who has not read Professor Charles Soludo’s article in the Vanguard (online version) on January 25 2015, I would encourage them to do so. It is littered with abusive and unbecoming language. It shows how an embittered loser in the Nigerian political space can get so derailed that they commit intellectualharakiri by deliberately misquoting economic facts and maliciously turning statistics on their head to justify a hatchet job. We hope all the intellectuals in the international circles in which Professor Soludo has told us he flies around in will read what a Professor of Economics has chosen to do with his intellect.

2.     In this one article Soludo has shamelessly pandered to so many past leaders that Nigerians are asking one more time – what position is Soludo gunning for now? He claims in his article that he has had his own share of public service, yet he has failed twice in his attempts to be Governor of Anambra State and Vice Presidential candidate of various parties. There is definitely an issue of character with Prof. Charles Soludo and his desperate search for power and relevance in Nigeria. Nigerians should therefore beware of so-called intellectuals without character and wisdom because this combination is fatal.

3.     But let us turn to the main subject of Soludo’s discourse. 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.

4.     Nigerians must be reminded of his antecedents as CBN Governor, and even prior to that, as the Chief Economic Adviser to the President. The consolidation of the banking sector was a good policy idea of the 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?

5.     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. 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.

6.     In fact, the banking sector was brought to its knees and required a massive bailout by Nigerian tax payers. This bailout was done by his successor (now Emir of Kano) who cleaned up all the bad debts and transferred them to the newly-established AMCON, from where they are managed today. 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.

7.     Let us now look at some of the points he makes. Luckily, Soludo has told us that he has been busy travelling internationally, hobnobbing with his global partners. It is obvious from this article that from the rarefied heights at which he is flying he is completely out of touch with what is happening with the management of this economy. Take his comments on the mismanagement of the economy and the imposition of the austerity measures. The present fall in oil prices, a global phenomenon over which Nigeria has no control, has given every charlatan the opportunity to attack the economy, and by extension the managers of the economy

8.     It is true that the economy grew well during the second-term of former President Obasanjo as a result of the reforms supported by the President and implemented by the Economic Management Team. Please note that the Finance Minister under whose leadership that good performance took place, including massive unprecedented debt relief, is still Finance Minister today. But thorough examination of the facts on performance under the Jonathan Administration will also reveal that at a time when global economic performance was mediocre, with GDP growth averaging about 3 percent per annum, Nigeria’s GDP growth – averaging about 6 percent per annum – is indeed remarkable. Even more interesting is the fact that the oil sector did not drive this economic performance but the non-oil sector (Agriculture, Manufacturing, Telecommunications, the Creative Economy, and so on), which shows that the current Administration’s diversification objective under the Transformation Agenda is working. Transformation equals diversification

9.     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.

10.                        In fact, history will recall that careless remarks by Prof. Soludo (then Chief Economic Adviser to the President) hypothesizing a possible naira devaluation, condemned the naira to a free fall towards the end of 2003. Ray Echebiri, in his 2004 article in the Financial Standard, wrote that not even the assurances given by the then CBN Governor, Mr. Joseph Sanusi or President Obasanjo that any plans to devalue the naira existed only in the head of Professor Soludo could halt the fall of the naira from N128 to the dollar in the official market to about N140 between September and December 2003.

11.                        It is true that our foreign reserve accumulation is less than what it should be but the reason for this has been fully given, not as excuses but simply as fact: lower oil production and crude oil theft along with the refusal to save in the Excess Crude Account (ECA) are the reasons. Contrary to what Soludo said, oil production under President Obasanjo was higher than current levels. Quantities produced averaged 2.4 million bdp, 2.22 million bpd, and 2.21 million bpd in 2005, 2006, and 2007 respectively but has declined now to between 1.95 and 2.21 million bdp due to vandalism of the pipelines and the resulting “shut-ins” to fix the problem. 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. Please recall that even as we speak the States have taken the Federal Government to the Supreme Court on this issue

12.                        Sol

udo’s claim that 71 percent of Nigerians live below the poverty line is misleading and disingenuous. He uses 2011 statistics on poverty by the NBS to support his argument while ignoring more recent figures. But as stated in the Nigeria Economic Report 2014 by the World Bank, poverty rate in Nigeria has dropped from 35.2 percent of population in 2010/2011 to 33.1 percent in 2012/2013. By the way, the reason why our poverty numbers have been so wrong is that the National Bureau of Statistics (NBS), under Soludo’s supervision as CEA and Vice-Chair of the National Planning Commission, departed from the international standard method of poverty measurement. Is he now ignoring the right economic statistics to wilfully manipulate information?

13.                        No doubt we have a problem with unemployment in this country and we must deal with it. Indeed this Administration is dealing with it and stands proud of what it has accomplished so far and is pushing hard to accomplish much more. As a first step, the Administration, through the office of the Chief Economic Adviser to the President and the NBS, worked hard to determine how many jobs we need to create in a year. What you don’t measure you cannot make progress on. Why didn’t Soludo do this when he was CEA?

14.                        We need to create about 1.8 million jobs a year in this country to cater for the new entrants into the labour market, but we also need to deal with the backlog of the unemployed and the underemployed, e.g. those selling on the streets. Dealing with this global challenge of unemployment is not an easy task for any country, as can be seen from the experiences of developed countries particularly in the euro area. But the Jonathan Administration is making good progress, creating an average of about 1.4 million jobs per year by driving quality growth in key sectors like Agriculture, where the bulk of new jobs are being created, Housing, Manufacturing, Financial Services, and the Creative Industries like Nollywood.

15.                        In addition we have special programs to promote job creation among the youth and these include:

v Promoting entrepreneurship among the youth through the “Nagropreneurs” program to support 750,000 youth farmers with grants and training, andthe YOUWIN progra

m that is directly supporting up to 5,400 young entrepreneurs with grants, training, and mentorship and so far beneficiaries are creating an average of 9 jobs each, for themselves and others. About 22,000 jobs have been created by the first 2,400 youwinners.

v Graduate Internship Scheme: that is reducing the vulnerability of unemployed graduates by enhancing their employability. The Scheme targets up to 50,000 unemployed graduates in the 36 states of the Federation and FCT and about 22,000 graduates have so far been placed by the program.

v Community Services Scheme under SURE-P: developed to empower young unskilled Nigerians, women and people with disabilities. About 120,000 mostly young workers have been engaged across the country

16.                         On the issue of debt, Nigerians deserve to know the truth and we have said it before. The truth is that the government borrowed in 2010 to pay an unprecedented 53.7 percent wage increase to all categories of federal employees as demanded by labour unions.  The total wage bill rose from N857 billion in 2009 to about N1.4 trillion in 2010, and as a result, domestic borrowing increased from N200 billion in 2007 to about N1.1 trillion in 2010 to meet the wage payments.Where was Soludo at the time? Why did he not react to the borrowing then? Was it because he wanted to pander to labour in preparation for his political career?

17.                        It is noteworthy that since 2011, the Administration of President Goodluck Ebele Jonathan has been prudent with the issue of debt and borrowing. The Economic Management Team not only looks at debt to GDP ratio, where Nigeria has one of the lowest numbers in the world at 12.51 percent but it looks at debt service to revenues. That is why in spite of the rebasing and a larger GDP, the administration has taken a prudent approach to borrowing. The prudent approach helped to drive down domestic borrowing from N1.1 trillion in 2010 to N642 billion in 2014. In fact for the first time in our nation’s borrowing history we even managed to retire N75 billion of domestic bonds outright in 2013.

18.                        Des

pite the present tough situation, we do not plan to go on a borrowing spree but to keep borrowing modest at a level sufficient to help us weather the present situation. We have already ramped up efforts to generate more non-oil revenues for the government while cutting costs of governance. Therefore, Soludo’

s claim that this Administration is reckless with debt does not hold true.

19.                        Sin

ce Soludo seems so ignorant to what has been achieved by the Jonathan Administration, let us present just a few examples of them here again. This information is easily verified.

·        We are improving infrastructure across the country. For example, 22 airport terminals are being refurbished, and five new international airport terminals under construction in Lagos, Port Harcourt, Kano, Abuja, and Enugu. Soludo’s kinsmen in the South East now have an international airport in Enugu, and for the first time in Nigeria’s history can fly direct from Enugu to anywhere in world for which they are very grateful to this Administration. But with Soludo being up in the air with his international travels, he has not touched ground in the Southeast to observe this development for himself.

·        Various road and bridge projects have either been completed or are under construction. Those completed include the Enugu – Abaliki road in Enugu/Ebonyi States, the Oturkpo – Oweto road in Benue State, the Benin – Ore – Shagamu highway, and the Abuja – Abaji – Lokoja dualization, and the Kano – Maiduguri dualization. The Lagos – Ibadan expressway and the Second Niger Bridge are under construction.

·         Rail from Lagos to Kano is now functional, as is parts of the rail link between Port Harcourt and Maiduguri. All these have brought transport costs down. We recognise that more needs to be done in the power sector, but bold steps (like the privatisation of the GENCOs and DISCOs) have been taken, and our gas infrastructure is being developed to power electricity generation

·        In Agriculture, over 6 million farmers now have access to inputs like fertilizers and seeds through an e-wallet system, which is more than the 403,222 that had access in 2011. Rice paddy production took off for the first time in our history, adding about 7 million MT to rice supply. An additional 1.3 million MT of Cassava has also been produced and as a result, the rate of food price increase has slowed considerably, according to the NBS.

·        In Housing, we have put in place a new wholesale mortgage provider – the Nigerian Mortgage Refinance Corporation (NMRC) – to provide affordable mortgages to ordinary Nigerians, starting with those in the low-middle income bracket. This sector will help the economy grow as we tap it as an economic driver for the first time. Mortgage applications from 66,000 people are currently being processed and 23,000 have already received mortgage offers

·        Our Manufacturing sec

tor is reviving with new automobile plants by Nissan, Toyota, etc. This is in addition to the backward integration policy in key sectors like petrochemical, sugar, textiles, agro processing and cement, which Nigeria is now producing 39,000 MT and exporting to the region.

·        The Creative sector is now a factor in our GDP, with Nollywood alone accounting for 1.4 percent, creating over 200,000 direct jobs and nearly 1 million indirect jobs. This is the first Administration to recognise its importance and support its further development with a grant program.

·        A new bank – the Development Bank of Nigeria – will soon be operational and this bank will help bridge the access to finance gap, which is a major constraint for the private sector especially SMEs. The bank will provide long-term (5 – 10 years) financing at affordable rates for the first time in our nation’s history.

20.                        Thi

s is the path that the government has been on before this fall in oil prices. The response to the economic shock has been spelled out to the Nigerian public over and over again, and the Administration intends to focus on managing this crisis appropriately. This year will be difficult. To say anything less to Nigerians will be untruthful. It would have been better if there had been a bigger cushion of the Excess Crude Account to manage this situation but despite this the nation can rise to the challenge. More importantly, President Goodluck Ebele Jonathan and the Economic Management Team are seeing this as an opportunity to diversify the revenue sources of an already diversifying economy. In fact let me at this juncture use this opportunity to comment on Soludo’s appalling statement that rebasing brings no policy value. Rebasing has enabled us to better grasp the new diversified nature of our economy. This provides the basis for our present drive to support different sectors with appropriate policy instruments to enhance their development. Rebasing has also enabled the Administration to create the platform from which to drive our work on increasing non-oil revenues. These are areas of critical policy value.

21.                        Sol

udo mentioned the issue of the Economic Partnership Agreement with the EU, noting that this Administration has not been vocal or clear on its direction with this agreement. On the contrary, the Administration, particularly the Ministry of Industry, Trade, and Investment, has been clear on this issue but since Soludo has been in the air he probably has not been aware of this. Just recently, the Minister of Industry, Trade and Investment reiterated again to the corporate sector that Nigeria has not signed and does not propose to sign the EPA in its present form.

22.                        The point is that this government has been pursuing the right economic policies, and its efforts have been acknowledged nationally and internationally. Let me say that there are objective ways to measure performance. There are international institutions globally accepted to do this. They have acknowledged this Administration’s good economic management up to the recent crisis and even now.

23.                        We cannot go by someone’s subjective view, driven by bitterness and bile. We need to look to the truth and to professionalism. This is where ProfessorSoludo totally fails. For the other gratuitous, political, and personal attacks, we are sure that those mentioned will respond appropriately. 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.

Paul C Nwabuikwu

Special Adviser to the Coordinating Minister for the Economy and Minister of Finance

Soludo’s Misinformation

Sunday, 01 February 2015 00:00

Written by Nicholas Okoye

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 Soludoon 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 beintelligence, 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 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 OkonjoIweala 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 ProfSoludo 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, Alma Jiri 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 ProfSoludo 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.

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

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Chukwuma Soludo: Serving a diet of half truths, outright lies and self serving propaganda

Dealing with the Professor’s selective amnesia

By Temi Jack

Opinion – Without doubt, Professor Charles Soludo is a brilliant macro-economists and public intellectual. It appears however, that the Professor suffers from an incurable tendency to emasculate reason; intellect and good judgement when his ambition and rabid desire to stay relevant is involved. His recent article which deliberately ignored and distorted facts for clearly pecuniary reasons is reminiscent of the shock Nigerians experienced when Sanusi blew open the rot that he deliberately ignored and covered while serving as the CBN Governor. Of what profit then, is the Professor’s brilliance, if it is not anchored on sound principles and integrity?

Facts we know do not lie and facts, if they are to be presented must be verifiable, current and a reflection of the reality. Why would Soludo, a professor of economics use 2010 and 2011 to judge macro- economic performance in 2014? Does it mean that he could not access recent data to work with? It is clear that he deliberately and conveniently ignored the most recent statistical information from CBN, NBS, World Bank and other reputable international organizations because they don’t tally with his objective which clearly is to discredit the President Goodluck Jonathan administration and his economic management team lead by Dr Ngozi Okonjo Iweala. Whose errand is Soludo running? Must one resort to cheap lies to be relevant?

Let’s hear Prof Soludo verbatim: “…poverty incidence and unemployment are also simultaneously at all-time high levels. According to the NBS, poverty incidence grew to 69% in 2010 and projected to be 71% in 2011, with unemployment at 24%. This is the worst record in Nigeria’s history, and the paradox is that this happened during the unprecedented oil boom …”

Is this the truth? Hell no! According to recent figures from the National Bureau of Statistics, NBS, current poverty figures stands at 33.1% and not 71% like Soludo bogusly claimed. Unlike what the professor said in his much-publicised essay, under the Jonathan administration, Nigeria is experiencing her lowest incidence of poverty in history.

Let’s hear Soludo again: “…His record on the economy is a clear ‘F’ grade. As one reviews the laundry list of micro interventions the government calls its achievements, one wonders whether such list is all that the government could deliver with an unprecedented oil boom and an unprecedented public debt accumulation. …” This is clearly not an objective assessment or a reflection of the reality on ground today. For someone of Soludo’s academic and professional stature, I cannot attribute this to ignorance or lack of facts. This leaves me with the sad and pitiful conclusion that the Professor is being deliberately mischievous and his entire distorted monologue is meant only to disparage the government and the economic team. His blanket dismissal of economic performance and condescending ascription of “F” grade just makes this the more obvious.

Contrary to his maligned view, Nigeria according to analysts at Wall Street Journal, “has emerged as the frontier-market economy that is attracting the most attention from American and European multinationals.” The report went on to state that “Nigeria is joined by Argentina and Vietnam as the frontier markets that multinational corporations are most interested in, according to a new index of corporate sentiment.”

This is coming from the Frontier Markets Sentiment Index, created exclusively for the Wall Street Journal by Washington DC-based advisory firm Frontier Strategy Group. This tracks the level of interest shown by major European and American multinational companies in countries across the frontier markets world. Is Soludo saying that investors from America and European multinationals would willy-nilly troop to an F-grade economy? Can Soludo be this petty? This is only possible if in pursuit of an ulterior motive, which he makes so obvious.

Is it also not curious that Soludo’s “F-grade” economy has witnessed an unprecedented growth rate of 7% in the last couple of years according to CNN Money? Nigeria’s economy in the years under review is witnessing the third highest growth in the world behind China, 7.3% and Qatar 7.1%. What is Soludo really saying? If he is nursing a grouse with the economic management team lead by Dr Ngozi Okonjo Iweala, he should be bold enough to raise it straight and not dress it with this non-sense veiled as economic analysis.

Beyond quoting data from various agencies, it is on record that under the Jonathan’s administration and his economic management team, the power sector reform has reached an irreversible level, the power infrastructure has been effectively privatized, PHCN is no longer a government behemoth.

Soludo has clearly joined the chorus of the opposition who in spite of overwhelming evidence of unrivalled transformation of Nigeria; choose to sing that “Jonathan has done nothing”. He is free to do so, but should be bold enough to approach them for membership. However, he cannot succeed to distract discerning, honest and patriotic Nigerians from the many achievements of the President even as they read his lengthy essay:

a) Power generation has reached an unprecedented 4, 500 megawatts. This feat was made possible under the Jonathan administration as a result of careful, deliberate and concerted planning, dogged execution and effective policy monitoring. Of course there are still teething issues with evacuation and distribution as a result of the destructive activities of gas pipelines vandals, which the government is set to confront head on.

b) Unlike Soludo’s lies about depleting foreign reserves, available data from CBN shows that Nigeria’s foreign reserve as at December 2014 stood at a historical high of $41.67 billion. This data can be verified from the CBN website and puts a lie to the claim by Soludo say that “no penny” has been added into the nation’s foreign reserve.

c) Any discerning and honest Nigeria will not deny that federal roads across the length and breadth of Nigeria are better today than they have ever been in our recent history. The Benin-Ore road, Benin- Auchi, Enugu- Port Harcourt Road, Kano-Maidugiri Road, Auchi-Okene-Lokoja-Abaji Road, Lokoja-Abaji-Abuja, Abakaliki-Mbok Road, Apapa-Oshodi Expressway, Owerri-Aba Road and so many other federal highways have been reconstructed/rehabilitated under the Jonathan administration. These are things that matter to every-day Nigerians. They don’t need an economics professor to teach them non-sense- apologies to Fela Anikulapo Kuti .

d) Under this administration, the rail lines are back, people now have an alternative means of transport and the pressure on our road is drastically reduced. Commuters in Lagos, Enugu, Port Harcourt, Kano, Kaduna and Abuja now are experiencing the pleasure of a train ride- many for the first time in their lives. This is certainly not what you get in an “F” grade economy.

e) Soludo stated that he had been engaged in extensive international travels in the last couple of months and has only followed political events in the country by watching the presidential candidates on TV. Soludo must be commended for exporting his knowledge to diverse ends of the earth but one wonders if he skipped the airports the last time he came to Nigeria. Can he deny the facelifts and system upgrades that have been effected at these airports? Were they possible with by magic? Is it not fair to at least acknowledge that even while we are not where we need to be, we cannot be said to be where we were- the last time the Professor was around in public circles.

f) Soludo made the very laughable claim of saying that the performance of the agricultural sector under Obasanjo was better than what we have presently. How low can he sink so low in shame to make such an obviously untrue statement? It is well known that in the last couple of years, Nigeria spent a whopping $11 billion importing wheat, rice, sugar and fish alone. Today, Nigeria’s import bill for agricultural produce is less than one billion dollars. It is all due to the dedication and commitment of the economic management team that Soludo has set out to denigrate in his essay. Nigerian farmers know better. More than ever before, Fertilizers, farm supplements and even funds are getting to them a lot faster and easily than before via the “e-wallet” initiative of the President.

g) Soludo said that our exchange rate is bad because of wastage. He favours defending the Naira with our Foreign Reserve. That’s short-term thinking. Russia defended her currency and saw that it was unsustainable. So they devalued. Why should the eggheads managing our economy be crucified for doing the sensible thing? Short-term thinking, like Soludo favours won’t take us far. Prof., long term means keeping some of the earnings away for the rainy day. That is the idea of GEJ’s Sovereign Wealth Fund (SWF).

h) On the debt issue, Prof. Soludo tried very hard to create a mischievous impression about the government and it will serve our interest to set the records straight. In 2004, our national debt stock stood at $46.2B or 64.3% GDP. It took an Ngozi Okonjo Iweala (whom Soludo now criticizes) to secure a relief from the Paris Club. By 2007, our national debt stock stood at a total of US$17.3 billion or 11.8% of GDP. This was after Ngozi Okonjo Iweala left in 2006. In 2011 when President Jonathan was elected president, our national debt was at US$47.9 billion or 21% of GDP. I don’t want to go into all the details of the global economic meltdown during Umaru Musa Yar’Adua era that led to that rise in debt. The 21% debt to GDP ratio cannot be described as bad economic management.

i) It is imperative to note that the only noticeable change is the growth of our domestic debt. The reason: the federal government wanted to deepen the domestic debt markets and generate a new yield curve for Nigeria which ultimately could help our corporate bodies. The strategy is for corporate bodies to access capital markets and borrow funds at more affordable rates. The Debt Management Office, DMO, has been successful on this. Also, the FG raised domestic debts in order to finance budget increases like the 53% increase in Salaries of Federal Civil servants in 2011. The hike in domestic debt was expedient to fund the increase in workers’ salaries.

I would end by admonishing Professor Chukwuma Soludo to face the realities of the time. Nigeria is on a journey, a journey of transformation, of national rebirth and renewal. We sure have challenges (and which country does not?), there are more hills and valleys to cross but only a fool or a hate-driven cynic would deny the many strides recorded by the present economic management team assembled by President Jonathan. Political disagreements must not entail bitterness and envy. Soludo is advised to truly “devote his time and energy in pursuit of other passions, especially abroad.” and not distract the patriots who are working to secure the future of Nigeria. Yes, Soludo is right, Nigeria must survive and prosper beyond Buhari and Jonathan but Nigerians cannot be fooled into jumping out of the transformation train in pursuit of some esoteric agenda of a few disgruntled hardliners and ego-driven public intellectuals.

Voice of Obasanjo, Hands of Soludo; A Rejoinder to Prof. Chukwuma Soludo by Daniel Essien

In a skewed article dressed up as an innocuous assessment of the ongoing political campaigns by both the ruling party and the opposition, Prof. Charles Soludo finally broke the silence after over five years of avoiding the public eye. Many of the points raised in the article are typical of grudges hitherto suppressed for a prolonged period but that have finally bubbled to the surface or were perhaps forced out by a higher force.

The article published in the Vanguard newspaper of January 25th did not say anything different from what opposition sympathizers, armed with a hunger for power but with limited awareness or with a deliberate disregard for the current hard data, would be disposed to putting out. If this article represents Prof. Soludo’s ‘big idea’ and epiphany, it surely is too little and is coming too late to alter our perception of Soludo the man. For keener minds will see the article for what it is; a subtle act of self-worship by a glory hunter desperate to crawl back into relevance; a ‘me too’ submission by a man eager to update the public that he is now into ‘international’ engagements. The last time we heard from the former CBN governor was in 2011 when he was decisively defeated in the Anambra governorship elections by the amiable Peter Obi. Ex governor Obi has moved on to become the head of President Jonathan’s re-election campaign in the South East. But it appears that, judging from the content of the ex-CBN governor’s recent article, Prof. Soludo has not forgotten that humbling loss.

Prof. Soludo set out in his article to discredit the current government’s economic management records by twisting facts and drawing ridiculous parallels. Ordinarily, seeing that we are seemingly in an era of ultra-liberal politics where Nigerians enjoy the full rights and privileges of free speech, one would be tempted to ignore Prof. Soludo’s submission as just another opinion piece. But one is constrained to put out a rejoinder because a little misinformation in our current climate is too much misinformation. And although the government is yet to issue an official response, this one by a private citizen will seek to examine, paragraph by paragraph, the misrepresentations in Prof. Soludo’s article.

- Comparing Melons and Water Melons

Prof. Soludo’s reference to Shagari’s government failure to check excessive borrowing and frivolous spending by the different tiers of government, and his equation of same with the current administration’s approach, shows that he may be out of touch with the times. The global economic environment and the current government’s policy responses to that environment are markedly different from the Shagari era. For one, while President Shagari had no stoppers in place to control borrowing by the different tiers of government, the current administration has a coherent policy that streamlines the borrowing process for federal and state governments. It is Known as the Medium Term Rolling External Borrowing Plan, a policy which requires that borrowings to be undertaken by the federal and states governments within a three-year planning framework be transparently shown with the aim of focusing borrowings on priority projects and reducing borrowings for non-priority projects. Another plan called  Medium-Term Debt Strategy limits both domestic and foreign debt exposures of the government. So now, more than ever, the government has taken deliberate steps to control the debt burden.

Also, the increased spending carried out under this administration is focused on critical infrastructure to support the diversification of the economy. Prof. Soludo’s position seems to favour pilling up foreign reserve to shore the value of the Naira. This is unsustainable short-term thinking which will do little to help the economy should the oil glut persist, as Russia learnt quite quickly following its initial attempt to defend the Ruble as the falling oil price combined with economic sanctions to hit its economy. And the glut is expected to persist given the prevailing oil supply and political situations in the international market which are markedly d

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