Charles Chukwuma Soludo
Prof Charles Chukwuma Soludo, an economist, was named governor and chairman of the board of directors of the Central Bank of Nigeria (CBN) on 29 May 2004. Soludo, a core professional in macroeconomics, has a weight of credentials that distinguish him from any other central bank governor Nigeria has had.
He earned three degrees and then professorship at the University of Nigeria in Nsukka all in six years. He graduated with a first class honors degree in 1984, obtained a masters degree in Economics in 1987 and a PhD in 1989 with prizes for the best student at all the three levels.
A wide exposure in training and practice equipped him for the great accomplishments he registered while he was CBN governor. He had cumulative four years of post-doctoral training in some of the world’s most prestigious institutions – a visiting scholar at the International Monetary Fund, the University of Cambridge, the Brookings Institution, University of Warwick, University of Oxford and a visiting professor at Swarthmore College (USA).
He has also worked as an international consultant for a number of organisations, including the World Bank, United Nations Economic Commission for Africa and United Nations Development Programme. Soludo has served as senior technical advisor/consultant at IMF since 1994 and also taught IMF’s financial programming and policy course to senior staff of central banks in West Africa and other developing regions.
His multi disciplinary knowledge gave him an edge in formulating policies that register desired effects across economic sectors and industries. He has been deeply involved in research, teaching and auditing in several disciplines as the multi-country macro econometric modeling, techniques of computable general equilibrium modeling, survey methodology and panel data econometrics, among others.
Soludo is the Nigerian equivalent of Ben Bernanke, the US Federal Reserve chairman, who employed his deep research work on Great Depression to provide the way out of global financial crisis for the United States and for the rest of the world. Soludo studied and taught courses that shed light on growing economic complexities at many respected universities, including Oxford, Cambridge and Warwick. He has written a number of books on the subjects.
Prior to his appointment as CBN governor in 2004, Soludo held the positions of chief economic adviser to former President OlusegunObasanjo as well as chief executive of the National Planning Commission of Nigeria. He came into central banking bringing with him the wisdom of proactive policies that strengthened the banking industry and prepared it for the global financial crisis that soon followed.
Before his coming, the CBN had struggled for several years to deal with a lingering problem of financial distress among the operating banks. Pervasive weakness and uncertainty existed in the banking system before the consolidation. Soludo is the man who provided a once and for all solution. It was a big catastrophe averted in that the global financial crisis did not meet Nigerian banks in a state of financial distress.
Soludo clearly established himself as an economic policy authority and displayed a great understanding of using monetary policy to spur economic prosperity. The economy needed to build a new capacity in output and consumption and Soludo’s banking consolidation created the biggest capacity ever in the banking system and consequently positioned it to create the big capacity needed in the rest of the economy.
The banking consolidation policy initially looked like a tall order – raising the minimum capital requirement from a paid-up capital of N2 to shareholders’ funds of N25 billion. He accomplished it in 18 months – compressing the number of banks from 89 – most of which were weak and distressed to 25 large banks recharged for a rapid growth. The consolidation programme therefore provided the much needed stability and lifted public confidence in the Nigeria banking sector to the highest level in history.
Consequently, Nigeria’s banking sector became the fastest growing in Africa and one of the fastest growing in the world. The largest retail network extension of banks, the most rapid growth ever in the size of bank balance sheets and the biggest presence of Nigerian banks in the offshore markets happened within the five years of Soludo’s leadership of the CBN. The percentage of non-performing loans dropped to an all time low and rapidly growing deposits alongside the massive build up of equity resources, spurred an astronomical growth in credit to private sector.
He also championed the establishment of the Africa Finance Corporation (AFC), a continental, private sector-driven investment bank. He promoted the Financial System Strategy 2020, a blue print for Nigeria’s financial system to become Africa’s financial hub and to launch the economy into the global league of top 20 economies by 2020.
Policymakers in Nigeria are largely known to be shortsighted; Soludo is different from the lot. He anticipated that banks were likely to experience challenges on the asset side of the balance sheet and therefore provided for the establishment of Asset Management Company of Nigeria [AMCON]. This institution became the saving grace for banks awash with toxic assets in the wake of global financial crisis.
Soludo placed the Nigerian economy at the centre of the global flow of financial capital in his mission to see Nigeria become Africa’s financial hub. Never before have the financial markets become a major destination of foreign capital inflow in Nigeria. The attraction of huge foreign investment into the Nigerian economy through the instrument of banking consolidation shielded the economy from the full impact of global financial crisis. It created economic prosperity in Nigeria that opened up new opportunities for ordinary people at the grassroots.
The instrument of microfinance was a veritable strategy in his financial policies aimed at making credit widely available to the micro, small- and medium-scale operators that hold the key to rapid economic growth and employment creation. Neither before nor after his regime have Nigerians, rich and poor, had such an easy access to bank credit.
For his achievements, Soludo is the recipient of scores of awards and recognitions from many quarters. The Financial Times of London named him ‘a great reformer’. He won the Global and African Central Bank Governor of the Year awards in 2005, 2006 and 2007 by different international media institutions, including The Banker Magazine.