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Sunday, September 29, 2013

CBN GOVERNORSHIP: COMPARING SANUSI WITH SOLUDO


    
        During the year 2003, when Professor Charles Soludo assumed the governorship of central Bank of Nigeria, he came full of energy and confidence fully believing that he is the man for the job, the one genius that would transformed the Nigerian banking landscape. His predecessor in the job Joseph Sanusi was slow and conservative something of the old school, when compare to Soludo's academic background and revolutionary neoclassical economics ideas.Soludo was the economic adviser to the then President Obasanjo before been nominated for the top CBN job; as the economic adviser he was credited with formulating NEEDS (National Economic Empowerment and Development Strategy) among other things. The one single policy that Soludo has always been associated with when his tenure as CBN governor is remembered is his now controversial banking sector consolidation. During this banking consolidation Nigerian banks were rushed into increasing their capital base without any thinking about the effect this rush process would have on the Nigerian banking landscape, particularly its effects on Banking stability and customers confidence on these banks.

    During the process the number of Nigerian banks came down from 80+ to 24 which till date stand as unprecedented in the history of Nigerian banking sector. These 24 banks were as well rushed into boosting their capital base and total deposit, so that they could become number one in this or that on the continent. At the end of the day the ability of these banks to control and manage the various risks they were building up as they increased in size were weaken. And, all prior alerts and warnings from careful observers of the industry were ignored. This is another evidence pointing to the arrogant nature of the man Soludo; he was i knew it all and i don't need any body to tell me how to do this or that. 

 SOLUDO
SANUSI
     Sanusi came to the job with a background as commercial banker; though, he was in the academia but it was for a short period of time unlike Soludo who attended the level of professorship. His backgound as a professional risk manager helped him in dealing with the rots that soludo left behind after his banking consolidation. The man Sanusi did a lot of good work in cleaning the mess after Soludo, albeit, controversially. Sanusi fired the heads of about eight banks and jailed some of them. He came out with a list of major bank debtors, that includes the who's who of business and political elites in Nigeria, threaten them with jail term but back off later. Till date some of these chronic and bad bank debtors are still walking Nigerian streets free. 

     The Nigerian banking landscape has changed a lot from Soludo's period that was characterized by rapid changes to Sanusi's era of costly restoration of stability in the industry. Unlike, the universal banking system we had during the time of Soludo, today, Sanusi has reverted the industry back to the Pre-Soludo period, that put a line between commercial and merchant banking. But, both of them are talkative, controversial and unpredictable figures not like the slow phase Joseph Sanusi. Both, people came to the job relatively younger than most that held the job before them. while Sanusi is aristocratic and always ready to tell the world about it (remember his occasional attendance of official gathering in traditional attire), Soludo was much carried away by the desire to cut an image of  a typical western influenced academic central banker - a genius (remember his boasting, 'i am an Econometrician, macro-monetary economist,.....blah, blah').

Friday, September 27, 2013

DANGOTE AND MEMBERSHIP OF PRESIDENT JONATHAN'S CABINET



    Many people are wondering whether the billionaire Alhaji Aliko Dangote (the owner of Dangote group of companies) is a cabinet minister in the current regime of president Goodluck Jonathan. His current romance with the regime depicted him as one of the members of his executive team; the other time he was in Kenya with the President and his cabinet showering all kinds of praise on the man, including associating his success as businessman with the efforts Jonathan is making to revamp the economy. Immediately after signing that loan agreement (in Abuja) with some Nigerians banks for the financing of his refinery and fertilizer plants he headed to Jonathan office and do the same praise singing where as usual he attributed all his success to President Jonathan. This week he was in New York together with other inner cabinet members of the regime doing the same praise singing. Some would say that he is a member of Jonathan economic management team as justification for all he is doing now as the image maker of the regime. But, many other people will not see it that way. What will come to many people minds is that as 2015 is fast approaching Jonathan is using the successes of Dangote in building his business empire to realise his desire to get re-elected in 2015 general election. But, that is not where the real issue for Dangote lie, should Dangote mortgage his future and that of his empire for this regime even if it means the regime win re-election - it will only last for another four years till 2019. But, ordinarily business empires such as that of Dangote should last for much longer than that - for decades or centuries.


  In countries such as China you cannot make it as far as Dangote made it here in Nigeria without belonging to the communist party or being in their good book. Likewise in Russia you must be in the good book of Mr. Putin, but, come to think of it of Billionaire Bill Gate having to be in this kind of romance with Obama or any other US President for him to maintain his wealth. I am not here trying to exonerate the US system and its inherent weakness, but at least they are doing better than this. It is acceptable for businessmen to follow the President of their country when he is on a mission abroad to generate business back into the country, but not with the kind of desperation i have seen here. Dangote should remember that now he is not like any ordinary developing country Billionaire, he is a global star and all the eyes of the world are on him. And, activities such as the one he is involve with this government now will cost him direly and affect his international image and money making potentials. In the run off to the 2007 Presidential election, the then CEO of the Nigerian stock exchange Mrs Ndidi Okereke was involved in an embracing mess of sourcing money (albeit illigally) to fund the election of Obasanjo's candidate. It is this sort of corruption that is slowing the efforts of African countries to sources foreign investments. It is not normal that a businessman has to be in bed with every African government in power for him to make money for his business. African nations such as Nigeria should at least have the courtesy to excuse business people with highly needed money and ideas from their dirty politicking.

Monday, September 23, 2013

THE RISING TIDE OF POVERTY IN NIGERIA





       New statistics coming from both the Nigeria’s statistics body and World Bank have shown that incidence of poverty has continue to increase in Nigeria, where as things stand now about seventy percent of the population are living below poverty line. This is happening despite the stupendous wealth the country’s few elites continue amass. A visit to Abuja the nation seat of power is enough to demonstrate to you how the lucky few are living in luxury while the majority Nigerians wallow in abject poverty in the rural areas and far fringe parts of the country. Graduate unemployment has been on the increase since the returns to democracy, and despite, the fact that the country has realized billions of Dollars from the sells of crude oil in the international market. Recently, in Nairobi the capital of Kenya, Nigeria’s richest man Aliko Dangote during a visit of a Nigerian delegate to the country that include President Jonathan tells the gathering of diplomats and businessmen that he heard from an authoritative source that Nigeria is now the second largest market for private jets in the world. While rich Nigerians such as Dangote and co travelers are enjoying their wealth, hundred thousands are dying due ill health, lack of clean water, and poor sanitary conditions. In Kano, Aliko Dangote home state, lack of electricity has put many industries out of business while millions of beggars are roaming the streets looking for charity. Nigeria’s media in recent days was full of stories of an allege federal government deal with a Dubai based luxury goods dealer to supply it with fifty three Gold plated mobile phones to be given out as gifts to some few Nigeria’s elites during next month country’s fifty three independence anniversary on October first.


 ABUJA
 A Ghetto

      The rising tide of poverty in the country’s North East, as many analysts has argued, is the aftermath of poverty and central government neglect of the region. In many of my write ups on this blog I have made mention of my sojourns in the region and how I came face to face with abject poverty. Roads in the region are dead, schools dilapidated, industries non existing, health centres few and ill equipped, and begging the order of the day. While the federal government in Abuja is making noises about it non-existing achievements - being blown out of proportion by its huge propaganda machinery, a visit to social networking sites such as Facebook, is enough tell one how this government is being condemn by majority Nigerians because of its inability to get the majority of the poor out of the current hardship they are enduring. In the country’s oil rich Niger delta, where the President come from, billions of Naira has been squandered on the so called amnesty program for militant which ends up in the pockets of few militants leaders; who despite all these government gestures continue to stolen government crude oil. In the country’s South east kidnapping is the order of the day where many unemployed graduates engage in the act in order to make quick money. Not surprisingly, the victims of all these kidnappings are the country’s rich elites who after all are the ones who have stolen the money needed to provide these unemployed graduates with descent jobs – as the saying goes a child who stops his mother from catching a sleep will not catch any sleep, too. In the South Western part of the country, arm robbers have terrorized communities killing and stolen people possessions a phenomenon which when look at critically is the same out come that is common in a society where youth are not provided with jobs. It will be better for President Jonathan’s regime if he concentrates on fighting poverty instead of his current preoccupation with ways to get re-elected in 2015 which is about to years ahead.