Okonjo-Iweala, Ezekwesili clash over Soludo

The Federal Government on Wednesday said the five-year tenure of Prof. Chukwuma Soludo as the Governor of the Central Bank of Nigeria was a disaster to the banking sector.

While the Minister of Finance, Dr. Ngozi Okonjo-Iweala, described Soludo’s criticism of the management of the economy under President Goodluck Jonathan as “intellectual hara-kiri,” a former Minister of Education, Dr. Obiageli Ezekwesili, called for a public debate by all parties on the actual state of the economy.

Similarly, a faction of the Nigeria Governors’ Forum led by Governor Jonah Jang of Plateau State described as illusionary and attention-seeking, Soludo’s recent article on the state of the economy.

Soludo, who was the CBN governor between May 2004 and May 2009, had on Monday written an article in which he claimed that the Nigerian economy under Jonathan had performed woefully.

While reacting to the article, Okonjo-Iweala through a statement issued by her Special Adviser on Communications, Mr. Paul Nwabuikwu, said not only was it littered with abusive and unbecoming language, it showed Soludo, whom she described as an “embittered loser in the Nigerian political space,” could get so derailed by misquoting economic facts and maliciously turning statistics on their head to justify a hatchet job.

However, Ezekwesili said on her Twitter handle shortly after Okonjo-Iweala’s response was made public, that the “nation and people seem to be on an accelerated race to the bottom. So sad! Why would a statement from (the) government read like that? Gosh!”

She also demanded to know what had happened to the report of the forensic audit on the reported missing $20bn from the Nigerian National Petroleum Corporation as alleged by Sanusi shortly before he was suspended from office by the President.

Okonjo-Iweala had said the Federal Government had hired forensic auditors to scrutinise the accounts of the NNPC following the controversies generated by the allegation of the missing money. But up untill now, the report of the audit has not been made public.

In a telephone interview with one of our correspondents, Ezekwesili said that rather than resort to abusive language over Soludo’s comments, the government and the critics of its management of the economy should opt for a national dialogue where the touted achievements of the administration of the President could be subjected to deeper analysis.

In an earlier tweet, she had said that with the character of the response the managers of the economy, have given to Soludo, “a debate is imperative.”

She told one of our correspondents that if the government had been receptive to her observations made in a lecture she delivered at the convocation of the University of Nigeria, Nnsuka in January 2013 on the management of the external reserves and the ECA, the nation would not have found herself in the current economic crisis as a result of dwindling revenue from crude oil.

Okonjo-Iweala had said in her response to Soludo, “It is a sad day for Nigeria and the economics profession that someone like Soludo, a former CBN governor, should write such an article. If Soludo wants to regain respect, he should return to the path of professionalism. He certainly needs something to improve his image from that of someone whose sojourn into national economic management ended in disaster for the banking sector.

“His sojourn in politics ended in overwhelming rejection by the electorate, and more recently, his sojourn abroad has put him out of touch with the reality of the Nigerian economy.”

Okonjo-Iweala noted that the banking sector was practically brought to its knees and required a massive bailout by Nigerian taxpayers during the tenure of Soludo.

This bailout, which according to her, was carried out by Soludo’s successor, Mallam Lamido Sanusi, cleaned up all the bad debts and transferred them to the newly-established Assets Management Corporation of Nigeria, from where they are currently being managed.

She said, “There is definitely an issue of character with Prof. Charles Soludo and his desperate search for power and relevance in Nigeria. So much of what is written is outright nonsense and self-seeking aggrandisement that need not be dignified with a response.

“It is totally remarkable that Prof. Charles Chukwuma Soludo, the man who presided over the worst mismanagement of Nigeria’s banking sector as Governor of the Central Bank of Nigeria between May 2004 and May 2009, can write about the mismanagement of the economy.

“The consolidation of the banking sector was a good policy idea of the Olusegun Obasanjo administration but Soludo went on to thoroughly mismanage its implementation, leading to the worst financial crisis in Nigeria’s history.

“So what did Soludo do? After consolidation, the regulatory functions of the Soludo-led CBN were very poorly exercised. As governor, he failed to adequately supervise and regulate the now larger banks, an anomaly in financial sector supervision.

“In fact, as every Nigerian knows in his time, there was very little separation between the regulators and the regulated, which is a violation of a key requirement of central banking success.

“This led to infractions in corporate governance in many banks as loans and other credit instruments running to hundreds of billions of naira were extended to clients without following due process, and several of these loans could not be paid back.”

The minister claimed that Soludo singlehandedly mismanaged the banking sector, which led to the accumulation of huge toxic assets, and allowed paralysis to get to the banking sector during the period of the global financial crisis.

The liabilities of the banking, according to her, cost Nigerian taxpayers the sum of N5.67tn to clean up the books of the banks.

Okonjo-Iweala said, “This massive accumulation of bad debts, or non-performing loans as they are called in the banking sector, meant that our banks were ill-positioned to deal with the global financial crisis when it hit. In fact, the banking sector was brought to its knees and required a massive bailout by Nigerian taxpayers.

“So, let it be noted for the record that Soludo’s single-handed mismanagement of the banking sector led to an incredible accumulation of liabilities that will cost taxpayers about N5.67tn (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’s 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.”

The minister said the cost-cutting measures introduced by the Federal Government were in response to the drop in crude oil prices.

A statement released in Abuja and signed by the Secretary and Administrator of the Jang faction of the Nigeria Governors’ Forum, Mr. Osaro Onaiwu, stated that members of the faction were at a loss as to the motive behind the Soludo article, adding that the “half-truths and falsehood in the article could not be a sincere attempt to contribute to the national discourse, but rather a failed attempt at self-aggrandisement.”