Soludo Is Nigeria's Worst CBN Governor, Says Okonjo-Iweala

The Coordinating Minister for the Economy and Minister of Finance Dr. Ngozi Okonjo-Iweala has responded to former Governor of the Central Bank of Nigeria (CBN) Charles Soludo’s recent critique of the Nigerian economy, describing Soludo as the worst CBN Governor in Nigeria’s history.

Okonjo-Iweala in a statement from her office noted that "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."

The Finance Minister stated that after Soludo’s consolidation exercise, "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 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 Okonjo-Iweala said "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."

Okonjo-Iweala accused Soludo of bringing the banking sector to its knees and as such the sector "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 Asset Management Company of Nigeria (AMCON), from where they are managed today."

For the record Okonjo-Iweala stated that "Soludo’s single-handed mismanagement of the banking sector led to an incredible accumulation of liabilities that will cost tax payers about ₦5.67 trillion (being the total face value of AMCON-issued bonds) to clean up."

This amount she said "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."

Concerning Soludo’s comments on the mismanagement of the economy and the imposition of the austerity measures, the Finance Minister lamented that "the 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."

Thorough examination of the facts on performance under the Jonathan Administration, Okonjo-Iweala said "will also reveal that at a time when global economic performance was mediocre, with GDP growth averaging about three percent per annum, Nigeria’s GDP growth - averaging about six percent per annum - is indeed remarkable."

Even more interesting she said "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."