One of the high points of the Obasanjo administration was his sagacity in assembling an array of technocrats to manage the economy even though it turned out that most of the technocrats were espionaging for the “big money lenders in the Masonic capitalist West. The serving Central Bank Governor (CBN) Professor Charles Soludo is one of those who infused into the Federal Cabinet a ray of hope to some Nigerians because as Economic Adviser, he introduced some neoliberal economic policies that seemed well crafted to place the nation on the orbit of fast track development.
He assumed office as the CBN czar and rolled out seemingly innovation action programmes, the most prominent being the banking sector reforms, privatization of government enterprises and other IMF – inspired policies ostensibly designed to reposition the tottering economy. First he hurriedly closed down must bank by raising the liquidity ratio and in one fell swoop, 64 banks submarined. Secondly he advised ex-president Obasanjo to privatize most of the government owned enterprises and a huge chunk of them were sold to their fronts and cronies. Thirdly he convinced Aso Rock of the wretched re-denominating policy and minted new currencies making Nigerian believe that the devil holding back the economy was the colour and denomination of the Naira. As a face saving measure they negotiated a debt forgiveness package and all Nigerians hailed them as economic reformers comparable to Mohammed Ali of Egypt and Emperor Menelik of Ethiopia.
Through the privatization spree, the CBN technocrats only re-stated the Marxist thesis that the bourgeois class has the tendency of concentrating, centralizing and over-accumulating capital, which is the underlying principle of imperialism. The Nigerian economy has been harassed by double-digit inflation, capacity under-utilization and unstable economic climate. Most companies that existed in Nigeria had wound-up because of the inclement business weather compounded by lack of basic infrastructure such as good roads, an efficient transport system and power supply.
I had raised alarm as far back as 2006 that Professor Soludo was not capable of affecting the much needed quantum lead to jump start the economy. On one hand Soludo told Nigerian that there were excess foreign reserves to shore-up the economy in the event of any crisis. For me it was bad economics to wind up the 64 banks without evolving a policy to absorb the legion of workers, who were the primary causalities of the banking reforms. Soludo never put in place any policy to diversify the economy hence Foreign Direct Investment (FDI) in the economy was shrinking while the CBN Chief was basking in the euphoria of his reforms.
The unpardonable “sin” Professor Soludo perpetrated against Nigeria is the manufacturing of figures based on guestimates or outright falsehood that inflating rate was single digit even when the ordinary market woman who buys tomatoes knows that inflation was spiraling. At the wake of the global economic meltdown, Soludo also assured Nigerian that the impact of the tumble- down would not be severe on the nation, but just before he gave that eloquent speech at the hallowed chambers, Peugeot Automobile Nigeria (PAN) had laid off about 600 workers, Cadbury also laid of about 335 staff and since then most parastatals, even the so called consolidated banks” have started to downsize. Sadly amidst these sordid realities, the CBN Governor was still trumpeting that the Nigerians economy was growing at a supersonic speed. When there is economic growth, there are visible indicators such as reduced inflation, the propensity of workers to save because they earn living wages, stability of the exchange rate of the currency, job creation and industrialization to mention just a few. None of these has happened since Soludo introduced the so called reforms.
On the re-denomination propaganda, Soludo’s argued that the economic benefits for re-denomination of the Naira to include: making pricing more efficient such that under the new regime one kobo will have relative value; cultivating the habit of using coins and reinforcing the on-going currency reforms and the promoting more efficient payment system such as making ATM part of our payment culture and decongesting banking halls. Others are reducing the risks associated with carrying out physical cash as we eliminate the large denominations with very little value; discouraging currency substitution and addressing the perception that the domestic currency is weak. He also posited that the new Naira will have relatively high value and coins will dominate transactions.
Nigerians now know that all these arguments are a wretched falsity. Soludo still advanced the stale, sterile argument that re-denomination of the currency would make Nigeria realize the aspirations to become the financial hub of Africa. It is a known fact that all the 25 big banks put together are not up to the 4th largest bank in South Africa. How is that possible?
Elementary economics teaches us that it is not the denomination of a currency that makes pricing efficient; rather price is a function of the interaction between demand and supply. The second argument that cultivating the habit of using coins and reinforcing the on-going currency reforms is baseless as there is no correlation between the use of coins and economic development. Soludo’s argument that reducing the risks associated with carrying physical cash and the introduction of a coin economy will even aggravate the carrying of physical cash. It is difficult to fathom the ambivalence of the CBN Chief. A coin dominated economy will not engineer economic growth at all; it’s a giant leap backwards to the Stone Age civilization. If one may ask, how many Nigerians are using Soludo’s coins? Even the banks abhor the use of coins. Therefore, on the parameter, Soludonomics is a weeping failure.
Soludo is the “generalissimo” of the home grown economic strategy called New Economic Empowerment Development Strategy (NEEDS). While the objectives in NEEDS 1 have not transcended the levels of wild contemplating, the CBN technocrats crafted NEEDS 2. The resources invested in NEEDS 1 and 2 could have floated some industries to employ some persons to alleviate poverty. What is even most irksome is that in the full glare of these promises the exchange rate of the Naira has plummeted, our foreign reserves depleted and government has resorted to taking more and more loans.
Let me assert here and now that economics is a living science, a dynamic enterprise that cannot be manipulated by prophet or pseudo- technocrats. Only war economies run by failed state that operate a “war economy” become a huge segment of the 140 millions people has been disempowered. There is also a legal vacuum and this has forced many Nigerians to adopt coping strategies of survival of the fittest. It is illicit businesses that thrive because law and order are not enforceable in our land (apologies to the apostles of the rule of law).
One unedifying quality that makes Professor Soludo eligible for immediate resignation is that sustainable economic development does not thrive on prophesies predictions and outright lies. A very important higher law in governance and management is the ability of the role incumbent to, at all times, give a true picture of what is happening. Even Adolf Hitler - the scion of the Third Reich did not hesitate to tell the Germans that they were to face extra-ordinary hardship hence he enjoined every German to protect the Third Reich by any means necessary. Obama’s America did not hide the economic adversities Americans are facing today because of eight years of Bush’s misrule and excessive war funding in Iraq and Afghanistan. On the contrary Prof. Soludo has always refused to show Nigerians the true picture of the economy. Soludo’s insincerity has put a big question mark on his macro-economics policies cocooned and packaged in the form of economic reforms.
If the reforms are working would the World Bank have listed Nigeria as a fragile State along with Burundi, Cambodia Comoros Congo Democratic Republic Guinea Bissau and Kosovo?. Why is Soludo propagating the “catechism” that Nigeria which occupies the 154th position will jump to rank the 20th greatest economy in the world come 2020? Would that be a miracle?
Nigeria under Soludo has had an overdose of reforms and swallowed IMF prescribed pills yet the ailment seems to be worsening. I find it difficult to understand why Soludo has refused to explain the nuance of our pathetic situation that Nigeria economy does not fit into capitalism as conceptualized by Marx and Engel’s, or the Friedman neoliberal paradigm as far as the logic of development is concerned. The economy cannot respond to the surgical operation prescribed by the Keynesian model either because there is no where in the world where unfettered free market capitalism has thrived without the control.
Unemployment is on the rise, the economy remains a crude oil mono-culture, hyperinflation, low capacity utilization and lack of basic infrastructure have all conspired to debase the economy. The misery index is not showing signs of abatement, the colony the disillusioned have expanded exponentially, so does the population trapped in anomie. It is becoming more and more risky to place the lives of 140 million people in the hands of an insincere reformer.
If Professor Soludo were the Chancellor of the Exchequer, he would have long taken a bow, having realized that his reforms have plunged the nation deeper and deeper into the dungeon of anomie. Even Pinochet who first experimented neoliberalism in Latin America worked in tandem with IMF prescriptions and restructured the Chilean economy according to neo-liberal economic orthodoxies. In Nigeria Soludo’s reforms have only consolidated the existing patronage network – the same group that is feeding fat on government resources through the momenta of primitive accumulation.
This writer is one of those Nigerians pushing for the immediate sack of the CBN Chief. As a Professor of Economics, Soludo should apologize to Nigerians and quit. For five years running, he has continued to promise wealth creation and Nigeria’s ability to meet the Millennium Development Goals, but the lot of the ordinary Nigerian is crushing poverty and the number of scavengers in refuse bins is also on the increase. If I were a Senior Advocate of Nigeria and Soludo were in my court of law, I will not plead alocutus for him. The only verdict that will be acceptable to the ordinary Nigerian is that Soludo quits now. I do hope and pray that the Presidency will conjure the bravura, audacity and wisdom to tell Soludo to quit now in the interest of good governance and the RULE OF LAW.
Idumange John
Is a University Lecturer and Activist
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