Nigerians comment on Prof CC Soludo’s “The Hard Facts To Rescue The Nigerian Economy” speech

Whenever Prof CC Soludo, the former Central Bank of Nigeria governor, speaks, everyone listens. He is an eminent economist and one of the finest economic thinkers of his generation. Recently, in a program organized by the Vanguard, he brought that analytical vigor he has been known for years. Read his talk here.

Now the conversation is ON across the social media, on what he said, and meant for the recession-plagued nation – our Nigeria.

The Comments by Nigerians

We aggregate comments from Sahara Reports (here and here), Vanguard and other platforms.

• Prof Soludo was not vocal during Jonathan Goodluck administration. Most accused him as being part of the “intellectual economy” with so many analyses and modeling but no action. Most Nigerians noted that Prof Soludo was part of the system in the past and barely built anything sustainable

This so-called “economic summit” was a sham. If you set up a Summitt and your keynote speaker is one of the perpetrators of the economic mess we find ourselves today, then the whole exercise is a fraud. Soludo should’ve been put on trial. Where did all the money go? What did you do to stop the greatest heist of a country’s wealth in human history? But, of course, Vanguard being a favorite mouthpiece for the Biafraudsters of the world, skews the reporting to fit their intentions. This was not an economic summit; it was a fraud.

---

The annoying thing about these so called economist and experts is that they had opportunities to move Nigeria forward but never did. They all looted and move down on leaving the economy and Nigeria worst than they met it.

• He is speaking to power and many have branded him a Biafran.. “Any body that ever speak the truth to Buhari and his bankrupt clueless government is branded a biafran”. Yet, he has many supporters who appreciated his intellectual brilliance.

Soludo’s reasoning is higly realisitc. Arguabley most Nigerian professionals are simply a bunch of theorists. This one problem facing Nigeria. But Soludo is among the few who are very practical, able to translate theory into practice. At least many agree that when it was Soludo’s turn to serve, people saw the impact he made. No be small impact; real impact.

---

Soludo helped bring the economy down? Seriously? By his astute management of global economic headwinds that brought countries like USA, Uk and most of Europe to their knees between 2006 and 2008, Soludo cannot be faulted by an informed person, Nigeria was able to withstand the tsunami that pillaged most economies that period. This is notwithstanding the poor fiscal regime that prevailed that time. That we saw some measure of stability was down to his masterful application of monetary policy which is the turf of CBN. Introducing prejudice in discussing technical matters helps nobody.

• The independence of CBN from the Presidency is a weak link and continues to affect the performance of any CBN governor in Nigeria. That will help explain the inaction and action of many governors of the bank.

The CBN was not independent of the FG for 90% of the time that Soludo was CBN governor. Soludo was heavily marked by OBJ who essentially directed and micro managed his workers. The year that the CBN under Soludo was given independence (during Yar Adua’s time) we know full well how the entire banking system nearly collapsed.

• Nigerians want results and not analysis as many cannot understand all the analyses when nothing is working from one leader to another.

Mr Soludo, we have heard all the economic theories, Okonjo spent years saying similar craps but we are not in the lecture theatre, please suggest some practical solutions. You were the Governor of Central Bank, what did you actually do, Nigeria was not any good then

• These past leaders have supporters and some Nigerians tend to appreciate,

Okonjo midwifed our economy into the largest in africa, GDP was growing at a rate of 3-5% year on year, FDI was increasing , Dollar was stable, and inflation was kept at a single digit.
Enter APC and clueless GMB, inflation is now 19%(its actually higher if you do the maths, it should be closer to about 50%), GDP is contracting year on year, Dollar exchnage rate has hit the roof, there are now at least 5 rates for FX in the country.

Its obvious APC and GMB have no idea of economics, but will continue to blame GEJ for the next 50 years if allowed.

Contrary to public opinion, Foreign reserves when GEJ left was higher than $25Billion, and considering that Ameachi took GEh and team to court to deplete both the foreign reserves and the ECA, that is to be expected. Especially taking into account that just before the 2015 elections, dollar was released to Fuel importers to clear a backlog of FX needed to import fuel into the country(i am sure you remember the fuel shortage then).

The problem is GMB has no economic idea, no economic policy, how will you explain a budget(2 years now infact) , where 100% of the capital expenditure was funded by loans? A budget 3 times higher than that when crude oil was at a high of $80-120, how will you explain a budget where GMB allocated 10 times what GEJ allocated to himself as feeding allowance?
Does that not reek to you of economic saboteuring?

Its not even like the budget increased to fund some heavy infratsuructure needs, we will have understood if that was the case.
But the budget increased bcos they need to fund and pay back their paymaster.
And so we r still left in a situation where our president after budgeting an hefty amount for aso rock clinic and shouting “Buy nigeria” is jetting out for any small illness.

Counter Proposal as Comments

One commenter proposed a new economic model with clear fiscal steps:

I just read this article and a number of things jumped out at me. 1. It concentrated on the state of the economy left by the PDP. It criticized the implementation of the TSA and macro economic monetary policy of the CBN (all points made by me over the years) and identified the worsening indices of the economic performance under the APC government. It also identified gaps in the recently released economic blue print of government. What it is lacking is any positive counter suggestions for the future that would aid economic regeneration. In a nutshell, it is a lot of hot air about failures of the past with no suggestion as to wise future actions.

My two cents for the government are as follows:

Fiscal steps:

1. Dispose of FG assets that require management of state run companies. It should only keep investments in those ventures that yield to it passive income without the burden of management (eg NLNG). This should reduce the govt wage bill and increase its net positive income.

2. It should change the constitution that allows states to exploit mineral resources within their states and keep 50% of the income derived therefrom. This will increase the income levels of all states and the income accruing to the FG. All states will be richer (some states will however be significantly richer than others). The Nigerian state will however by significantly richer. The solid minerals ministry cannot exploit, optimally, the resources found in 744 LGA. It lacks the manpower, resources, funding or staff to do that. The individual states will be able to do this much more efficiently.

3. The FG should significantly reduce the costs of government and if that means consolidating certain overlapping parastatals then so be it. Should there be an ICPC and EFCC?

4. Tax policies should be considered that gives tax advantages to business start-ups. That means reducing tax rates to banks, commercial landlords, etc that cater to small and start up businesses. Also give tax holidays to start – businesses in their first 5 years of operation.

5. Universities should be compelled to have courses that identify productive gaps in the Nigerian business market and train undergraduates on the benefits of self -employment.

6. Laws that make it difficult or expensive to start a new business should be looked at, addressed and repealed.

Monetary policy

1. Remove currency controls

2. Allow a managed floating rate of the Naira. Where the CBN has the resources to intervene then it should purchase Naira and sell dollars.

3. It should reduce interest rates and CRR rates. At the moment, the CBN should focus on growth and then address inflation by systematically reducing money supply in the economy as growth increases.

4. Encourage commercial banks to redirect lending to the small business sector and to the solid minerals industry sector.

Rounding Up

Nigeria needs DO-Tanks and not THINK-Tanks. We have so many analyses with no action. Soludo has served his country and he has rights to his comments. We do hope that those holding the different government positions are listening. It is not all that he says that must be taken into considerations. They have to balance his insights and do what is best for Nigeria today.

Our problem is that we do not have many great business leaders. Imagine if we can make 20 each of Dangotes, Elumelus, and Ovias within a decade. That is the economic thesis anyone will believe because that is practice in action.