Nigeria Before ConSOLUDation And Soludo’s Anambra Cross

JOE C. ANATUNE

Patrick Osemene Ph.D, teaches pharmacy at Obafemi Awolowo University, Ile Ife. He heads the department too. Pat was my best man and has been a remarkable friend till date. He is inquisitive and enquiring like the scientist he is. He is enamoured by Prof. Chukwuma Soludo’s personality and track records of performance in public office. Last week, Pat thundered during a telephone conversation and in reference to his expectations of Soludo’ s next  moves;  “buddy, after CONSOLUDATION, what next for Prof. Soludo?”

Consoludation, for our younger readers, is a coinage by some columnists to describe and celebrate the banking reforms which Soludo successfully executed during his stellar tenure as Governor of Central Bank of Nigeria.  So, I unhesitatingly told Pat, that Anambra is waiting for African Dubai Taiwan (ADT) and that Anambra is waiting for the Soludo Solution. We will return to these.

If you grew up like I did, in a rural setting with balanced and beautiful ecosystem that man has not yet degraded, you may be aware of a specie or variety of palm fruit/nut called ‘okpurukpu’ (I don’t know the botanical name). Okpurukpu is noted for its big nut and little flesh and produces minimal oil. Compared with the more fancied Osukwu specie, palm tree farmers will not knowingly touch the Okpurukpu ten poles away. People who attempt eating the okpurukpu fruit say it is neither juicy nor lavish. Indeed, it is a hard nut to crack just like implementing a disruptive but positive change that moves society to a higher plane.

The foregoing has given rise to a metaphor and adage which the sages use to describe a tough and successful task undertaken by maestros without much ado; onuma na-ata okpurukpu odi ka dighi aku. Change is one thing I have come to realise that though many crave for, many also resist, because it alters their comfort zones. So while vision is important, the gut and hard work to drive the vision to life is equally imperative. Having these rare God-given attributes are not too common. 

Happily, one of the empirically, most frequently mentioned gubernatorial hopefuls for Anambra 2021, Prof. Cee Cee has these natural gifts – a thorough-bred thinker and exceptional doer.

 Before we forget, here is how the financial landscape of Nigeria was, before he got into the leadership of the Central Bank of Nigeria (CBN). The summation is that due to the structure and depth of the financial architecture, the industry was not playing its pivotal role in moving the Nigerian economy forward. I understand that ensuring our financial institutions play their developmental roles was the key reason why former President Chief Olusegun Obasanjo chose Soludo for the job, among other candidates. This was a departure from the previous practice where the headship of the CBN was a retirement haven for bank top brasses.

On July 6, 2004, Prof. Chukwuma Soludo, the  newly appointed Governor of CBN in a historic and special meeting with the Bankers Committee at CBN headquarters, Abuja, succinctly itemised the major draw backs of the industry as follows:
a) “Weak corporate governance, evidence of high turnover in the board and management staff, inaccurate reporting  and non–compliance  with regulatory requirements, falling ethics and de-marketing of other banks in the industry.b) Late or non-publication of annual accounts that obviates the impact of market discipline in ensuring banking soundness.c) Gross insider abuses resulting in huge non-performing insider related credits.d) Insolvency, as evidenced by negative capital adequacy ratio and shareholders’ funds that had been completely eroded by operating losses;e) Weak capital base, even for those banks that have met the minimum capital requirement which currently stands at N1 billion or USS7.53 million for existing banks and N 2 billion or US$15.06 million for new banks, compared with the RM 2 billion or US$26.4 in Malaysia.f) Over-dependency on public sector deposits and neglect of small and medium class savers’’

Having rigorously evaluated the prevailing situation at the time, which was very fragile and marginal, Soludo presented his vision for the industry. “Our vision  is a banking system that is part of the global change, and which is strong, competitive and reliable. It is a banking system which depositors can trust, and investors can rely upon. Evolving such a banking system is a collective responsibility of all agents in the Nigeria economy. Everyone has a role to play,” he told a pensive gathering of bank chiefs and chairmen at the said meeting.  He then unfolded his 13-point agenda in pursuance of the vision, principal which were; the requirement that the minimum capitalisation  for banks  should be N25 billion, consolidation of banking institutions through mergers and acquisitions, establishment of an Assets Management Company as an important element of distress resolution, rehabilitation of the Mints to reverse printing our currency and banks collaterals, which would henceforth be done in Nigeria among others.

Typical of Soludo, he put timelines in all the activities that made up his reform agenda. For example, recapitalization had a timeline of December 31, 2005 with the incentives that only such recapitalized banks can hold public sector deposits, and participate in the DAS auction. It was therefore, not surprising that the biggest and first merger between Standard Trust Bank PLC, Continental Trust Bank Ltd and United Bank of Africa was concluded in the consolidation process by early 2006 with  Mr.  Tony Elumelu as the Group Managing Director.

The rest as they say is history, because today, there are banks made in Nigeria for the world; banks that can finance big projects with the hitherto popular practice of loan syndication. But was it all smooth sailing for Soludo in bringing about these changes  which also included the rehabilitation and effective management of the Mint that reversed printing currencies and cheque books abroad?

True, those whose interests were affected fought back viciously with everything they got. Soludo’ s courage, will and staying power  was put to test. He stayed on course like the biblical Job, brought the reforms to  conclusion in recorded time. Honours, encomiums and laurels followed by a grateful nation and the world  for what many economic historians have noted as an unprecedented revolution.

It is no longer news that his vision not only repositioned the banks to be sound and reliable catalysts of development in all sectors of the economy but also saved Nigeria from the negative impacts of the 2008 global financial meltdown.

Today another challenge beckons on Soludo. Fifteen years ago, he stirred the hornet’s nest when he proposed a development model to Ndi Anambra  at an economic development platform organised by The League of Anambra Professionals (LAP) which has remained very relevant and irresistible. The  African Dubai Taiwan which entails developing Anambra as a smart megacity is the Soludo Solution for making Anambra  the happiest, the safest and the most prosperous city state in Africa in the next 50 years. The clamour for him to come home and make this happen has become a movement of sorts because the minds of Ndi Anambra have been stretched and  once the minds see or visualise higher and more alluring realms, like the promised land,  they  can never be the same. So, as we intoned sometime last year, Anambra is waiting for Soludo. This is his cross!

– Joe C. Anatune writes from Awa in Orumba North Local Government Area, Anambra State.