Tuesday, March 3, 2009

After almost 5 years, Nigeria's current Central Bank Governor, Charles Soludo,is set to step down in May. However, given the current economic climate, is now a good time to hand over the reigns of Nigeria's economy to someone else? And if so, who should that person be?

Soludo was fortunate to manage the Central Bank (CBN) during a time of wealth, as the price of oil was high and oil profits were put into financial arrangements like the Excess Crude Fund (created by a military dictator) and the nation's Sovereign Wealth Fund. Additionally, he successfully heralded the improvement and empowerment of Nigeria's financial sector, resulting in 16 Nigerian banks ranking in the world's top 1000. Furthermore, he has repeatedly proclaimed the aspiration of transforming the nation's commercial capital, Lagos, into a global financial city. However, not every decision he made was considered a success. His announcement of the re-denomination of the Naira in 2007 was quickly shot down by Yar'Adua, who explained that the plan had not been approved by his office.

Despite any problems Soludo had, he arguably was good for Nigeria's financial sector which grew under his care. That is why his potential replacement, assuming that he is indeed replaced, must be closely scrutinized. The new Governor of the CBN must be someone with proven experience in dealing with national economic matters, particularly in tough times. Furthermore, that person must be one who gives the market confidence and will not discourage local and foreign investors from investing their money in the country. Considering the current instability in Nigeria's economy, and the fact that the Naira has fallen by at least 20% against the US Dollar in recent months, Nigerians will need someone capable of creating and implementing innovative schemes to prevent the complete breakdown of Nigeria's financial markets and system.

Nigeria has been declared one of, if not the, safest economy in the world by the likes of Merril Lynch and the Africa Rainbow Consulting, which announced Nigeria as the best African country for investment. Despite the tightening of the foreign exchange rate policy, and the drop in foreign reserves, investors, like George Soros, still keep their eyes on the country as a potential investment location. As such, the CBN governor position is a plum position to have.
Given this reality, it is curious that the Leadership paper reported that the President's newest son-in-law, Isa Yuguda, the governor of Bauchi State, could likely head the CBN. It is unclear what his qualifications would be for such a job, except for his governorship over a state currently experiencing religious violence which he, Yuguda, summed up as being the work of his "political detractors".

The possibility of such an appointment is dangerous for Nigeria and its people. Nigeria is a struggling democracy trying to shed its reputation for extreme corruption. Having the Presiden't son-in-law at the CBN will leave little confidence that the coffers will not be emptied the way they have routinely been emptied in the past. That attitude will not necessarily be because Yuguda or Yar'Adua are known for corruption and stealing from the people, but rather, it will be due to the nation's history of having corrupt leaders steal from the very people they were to serve. After all, Nigeria is still recovering millions of the estimated $2 - 5 billion stolen and hidden all over the world by its last military dictator, Sani Abacha.

Nigeria is a country that has made it through tough times before and will undoubtedly make it through tough times in the future. Nevertheless, every Nigerian has a vested interest in ensuring that control of the Central Bank is passed on to credible hands. Nigeria cannot afford to have anyone but the best person, man or woman, in that position and there must be no room for corruption. Whoever takes on that job, when Soludo leaves, will need to be ready to keep the nation's financial sector afloat in these difficult economic times, while creating confidence in the economy for foreign investors and most importantly, for the Nigerian people.

Related Articles of Interest:
- When Oil Wealth Goes
- Excess Crude Fund Depleted
- Nigeria's Sovereign Wealth Fund
- The Guinean Coup: Babangida vs. Yar'Adua
- Rewriting Abacha's History
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joicee said...

Say it aint so!!

My jaws dropped as I read this article...Why is Soludo leaving now??? I know he can't be in that postion forever but WHY NOW??

It will be extremely difficult, an enormous task, to find someone to fill in the shoes of Soludo..

I remember being really excited at the prospect of the naira evaluation only to be disappointed that it did not go through. Who knows.. it would have probably helped especially during this global financial meltdown.

As for Yuguda, Yar'Adua's in law being schosen to replace Soludo...I hope that IT IS NOT TRUE. This is not the time for the President to play neptism...we are talking about the financial sector and we are in the middle of a recession.

I hope they appoint someone with THE BRAINS and INITIATIVE to carry on where Soludo has left off.

Geebee said...

This post strikes me deep especially because I have a dream of becoming a tower in the nation’s financial sector in latter years, hence my choice of my course of study - Economics. . . probably as Minister of Finance or CBN Governor or both. Then, the next target will be the Presidency. Watch out for me from 2023 to 2027 and beyond in the political and financial spheres of this country . . . On a more serious note now, Soludo has done a great job (I am still disappointed with the rejection of his redenomination policy by Yaradua) and I bet it would be so hard to get a better replacement for him. I totally oppose the choice of Isa Yuguda (where did that come from anyway and what are his qualifications?) especially because of his relationship with the President. A much more neutral person would do.

Jinta said...

if ribadu could be replaced, what chance does soludo have, especially as his term is about to expire?

i do get totally frustrated when i read about this govt's excesses. i read about yuguda and think they are just testing opinions to see if they can get away with it.

all these remind me of the worst of the shagari regime, just before the coup. i hope wwe dont have another coup, i'd rather settle for thieving politicians than thieving soldiers

Anonymous said...

I can only hope and pray along with other well meaning Nigerians that the same forces that succeeded in getting Soludo into that position in the first place will somehow resurface and prevail over the appointment of the next CBN governor. Wishful thinking? Well, prayer works.


@ joicee: "I hope they appoint someone with THE BRAINS and INITIATIVE to carry on where Soludo has left off."

That is the issue, isn't it? Assuming Yar'Adua will not ask Soludo to stay on board, his replacement must be capable.

How are you?

@ Geebee: If and when you get there, give me a call oh!

As for Yuguda, I cannot confirm that he will get the job. We all have to wait and see, but definitely, I agree with you that it wouldn't be right if he did get the position. Thanks for swinging by!

@ Jinta: "if ribadu could be replaced, what chance does soludo have, especially as his term is about to expire?"

You are so right. Personally, if the man's tenure is up, and he has no interest in renewing his contract, then it is fine for him to go. However, it is possible that the nation needs him to stay on or at least that his replacement be someone capable. The possibility that Yuguda could have the position or someone else with little experience, is troubling.

Like you, I hope we never have another military coup. That would cost the nation dearly and would further stunt our journey towards better democracy.

@ ShawndaVinci: I am joining you in that prayer. Yar;'Adua could still shock us all. And, by shock, I mean in the good sense.

How you dey?

Anonymous said...

Am not even gonna try to comment on this. Rubbish


Jess said...

I give up! Nepotism will not kill us in Nigeria. It's crazy enough as it is. Yar'adua's son-in-law? Must our families be involved with all of us in politics. I hope it is not true.

As for Soludo, he has tried. He needs to go off. . . I think he's done a lot in his time there.

doll (retired blogger) said...

Is Soludo's tenure over

tobenna said...

fantastic reporting SSD.
Brilliantly written. Especially with the links for further reading.

Soludo, I think should be returned for another tenure at least.
Look what happened to Nigeria after Okonjo left. No other finance minister has been able to measure up to her. Is Soludo the finance minister? No! But his, is the lone finance voice we have heard in the past 4yrs at least.
Try to imagine how far we would have come if Soludo and Okonjo continued their partnership.

ANyways, the CBN Guv is a role for technocrats and not politicians. I do not see Yuguda or whatever his name is getting the assignment.

As an aside, I still cant get over the fact that the president of Nigeria would allow his lovely looking daughter to become the 3/4/5th wife of a 3rd rate politician.

I rest.

Anonymous said...

If Soludo tenure's over, then it is expected of the government to replace him (if need be - especially @ this period) with someone who has made marks in the financial sector, better qualifications, better idea and higher integrity.

I do not think family affair should be invloved in selecting the 37th Governor of Nigeria, especially @ this economic meltdown period. We need someone with idea to "ice up" our economy & not President's inlaw who cannot manage his crisis torn State. (I pray its a joke sha)

Wonderful post in all.

Anonymous said...

Change is constant but it is in adapting to it that makes us survivors. To those hanging in and on in Nigeria, the future is yours. Let those so called leaders continue to throw wrong spanners into the works for history will judge each person according to contribution.

What is the true legacy of the current CBN governor and what qualifies the new one? Those are irrelevant questions, it would be nicer to see measurable benefits for our country after all is said and done.

Buttercup said...

We can only hope and pray the right person for the job will be appointed. And if it is indeed Yuguda....

Anonymous said...

Well... I think it is high time when we begin to mobilize our forces as concerned citizens to demand people with the required skills to occupy our public offices. Usually they will do what they want to do, but I am beginning to feel that era in Nigeria should be over with.
Government must be accountable to us and make sure their appointments are a reflection of the will of the people. I strongly believe that if Soludo is quitting, he should be required to recommend someone to take his place, considering that he has worked with many knowledgeable people. I am also wondering where Bode Agusto is? That is one capable mind that can successfully occupy that office.

fredo said...

The president, please remember that this is central bank of Nigeria not committee of friends or family meeting.

Savings said...

In my opionion it is important that banks undertake reform. So if the governor is to step down then it is very important that he is replaced by somebody sourced externally who is willing to make change within the bank for the better.

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