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Labaran Maku Says Banking Mess Is Soludo's Fault - Politics - Nairaland

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Labaran Maku Says Banking Mess Is Soludo's Fault by MRMoneyE(m): 4:37am On Sep 16, 2010
THE Presidency Wednesday replied former Governor, Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo, on his claims that Nigeria’s economy is "doomed" to a worse form of Structural Adjustment Programme (SAP).

The government blamed the crisis in the banking sector on misdirection and misapplication of past reforms in the financial sector, which it inherited.

For the presidency, the timing of Soludo’s tirade was unmistakable.

Its coincidence with the Presidential declarations of opposition figures was no accident.

Minister if State for Information, Mr Labaran Maku, said it was untrue the economy is heading for doom.

While Maku, on one hand described Soludo’s comments as innocuous, he held the former Governor responsible for the mess in the financial sector

"Professor Soludo as you know was CBN governor until about two years ago and we hold him accountable for all that is happening in the financial sector and therefore we want to look critically at what he said.

He added: "You know we are in partisan economic times and so every person speaking about the Nigerian economy today, you have to analyse critically why those comments are coming at this critical time.

"We know that in the last one year, we have been contending with the issues in the financial sector following the very difficult circumstances we inherited as a result of the misdirection and sometimes misapplication of the reforms in the banking sector and government has struggled with some of this banks and as of today,

"We want to assure you that the establishment of the Asset Management Company of Nigeria (AMCON) was indeed to address some of the crisis that we inherited.

Today the financial sector is stabilising as every report on the economy has shown.

"Suffice it to say that in recent months of our participation in government, let me say that we have had reports on the state of our economy submitted by the current CBN governor Lamido Sanusi. And in that report which was widely circulated the CBN Governor informed council and Nigeria on the state of the economy and that the Nigerian economy is due to grow by seven per cent and this projected growth will increase from year to year as we proceed with the implemetation of our programme.

"Government is determined to grow this economy. We welcome criticisms and comments on government programmes and activities. We don’t take them as offensive but we are confident in the economic policies of this administration and what we are doing to grow the economy.

http://nigerianbulletin.com/2010/09/16/presidency-says-banking-mess-is-soludo%E2%80%99s-fault-the-nation/
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by MRMoneyE(m): 4:46am On Sep 16, 2010
During Soludo regime Bank managers, loot, stole and  perpetrate themselves into office , the bank managers are not a bit better than IBB in the
way and manner IBB looted Nigerian economy untill the economy became a 'WALKING CORPSE'    
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by Nobody: 4:59am On Sep 16, 2010
http://www.thisdayonline.info/nview.php?id=182941

Soludo to Blame for Poor Economy, Says FG
From Kunle Akogun in Abuja, 09.15.2010

Former Central Bank of Nigeria (CBN) Governor Chukwuma Soludo’s warning of an impending economic crisis for the country yesterday drew the flaks of the Federal Government, which said he should be held responsible for the bad times the economy is currently facing.

Soludo had warned in an essay published in yesterday’s edition of THISDAY that if pre-emptive measures were not taken now, "Nigeria’s economy is ‘doomed’ to a worse form of Structural Adjustment Programme (SAP)” and “something will have to give”.
The former CBN helmsman had expressed concern that the government had been piling up domestic and foreign debts with no improvement in the economy.

But the Minister of State for Information and Communications, Mr. Labaran Maku, told State House correspondents shortly after the weekly Federal Executive Council (FEC) meeting yesterday that Soludo who was until about last year the CBN governor and should be held "accountable for all that is happening".

Maku insisted that the establishment of the Asset Management Company of Nigeria (AMCON) was indeed to address the misdirection and sometimes misapplication of the reforms in the banking sector which government inherited.
Said the minister: "He (Soludo) is a distinguished Nigerian and as you do know he was CBN governor until slightly over a year ago when he was relieved of his responsibilities and therefore we want to look critically at what he said.

Suffice it to say that in recent months of our participation in government, let me say that we have had reports on the state of our economy submitted by the current CBN Governor Lamido Sanusi. And in that report which was widely circulated, the CBN governor informed council and Nigeria on the state of the economy and that the Nigerian economy is due to grow by seven per cent and this projected growth will increase from year to year as we proceed with the implementation of our programme.
"You know we are in partisan economic times and so every person speaking about the Nigerian economy today, you have to analyse critically why those comments are coming at this critical times.

We know that in the last one year, we have been contending with the issues in the financial sector following the very difficult circumstances we inherited as a result of the misdirection and sometimes misapplication of the reforms in the banking sector and government has struggled with some of this banks and as of today, we want to assure you that the establishment of the Asset Management Company of Nigeria was indeed to address some of the crisis that we inherited.

"Today, the financial sector is stabilising as every report on the economy has shown. Government is determined to grow this economy. We welcome criticisms and comments on government programmes and activities. We don't take them as offensive but we are confident in the economic policies of this administration and what we are doing to grow the economy."
Meanwhile, the FEC yesterday approved the augmentation of contract for completion of the revised estimated total cost for Sabke Dam head work and access road project in Daura local government area of Katsina state, at a cost of N1.2 billion with a 10 months completion period.

According to the Minister of Information and Communications, Professor Dora Akunyili, the ministry of water resources also sought and got approval for ratification of the law of non-navigational uses on international water course to conform with the legal requirements following its adoption by the United Nations General Assembly.
The ministry also got approval for augmentation for the Owena Water treatment Plant project in the sum of N11.7 billion with a completion period of 24 months.

The minister said there is N1 billion provision for the project in the 2010 budget.
Other approvals at the Council meeting were the ratification of the agreement on the functioning of the Gas Exporting Countries Forum (GECF), the signing of the convention on substantive rules regarding intermediate securities which is also known as the Geneva Securities Convention and the ratification of the hosting agreement signed between the Federal Government of Nigeria and African Minister's Council on Water (AMCOW).

Akunyili said the “the objectives of the convention include the promotion of growth and development of global Capital Markets through establishment of a common legal framework aimed at protecting investors, including legal and associated risks and costs in relation to domestic and cross-border transactions involving intermediated securities
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by FrankC3: 9:11am On Sep 16, 2010
Lagos — Former governor of the Central Bank of Nigeria (CBN), Professor Chukwuma Soludo, has warned that if pre-emptive measures are not taken now, Nigeria's economy is "doomed" to a worse form of structural adjustment programme (SAP) and "something will have to give".

In an exclusive essay published in THISDAY today, Soludo, who also ran for governorship election in Anambra State in March, challenged presidential aspirants to debate economic issues before the general election.

Soludo expressed concern that the government had been piling up domestic and foreign debts with no improvement in the economy.

He wrote: "In spite of the heavy external debt of $34 billion and oil prices ranging between $25- $50 during the (ex-President Olusegun) Obasanjo's second term, we managed to grow the economy at about 6-7 per cent per annum (from average of 2.8 per cent in the 1990s). We started saving for the rainy day when oil prices reached $35 and by 2007, despite paying $12 billion to write off the Paris Club debt in 2006, we had saved about $22 billion as 'Excess Crude'.

"In the last few years, oil prices have averaged $70 to $85 per barrel. What has happened? We have spent the $22 billion saved under Obasanjo, and now massively borrowing at an alarming rate (domestically and externally) during a period of unprecedented oil price boom, and yet the economy remains static at 6-7% growth rate. Recurrent expenditure of the public sector has more than doubled since 2004, leaving very little for investment."

The excess crude savings are now a little above $350 million, with the three tiers of government drawing down to the tune of over $21 billion in the last two years to augment expenditure.

Soludo said with the cessation of hostilities in the Niger Delta, and oil price rising to about $79, "external reserves ought to be growing".

He is worried that rather, external reserves are depleting "precariously" to about $36 billion currently, "with weekly sales at the WDAS running into hundreds of millions of dollars. Private capital inflows have largely ceased. The capital market is comatose and capital flight is back with vengeance! With private saving rate of below 20 per cent, public sector dis-saving (borrowing), and huge net capital flight, the numbers on the macro economy do not simply add up. Add to this the surfeit of liquidity and misalignment of basic prices and the conclusion is self evident: sooner or later, something will have to give!"

He said if not for the devaluation of the naira in the heat of the global economic crisis two years ago, states would have been in serious fiscal crisis today.

"Recall that during the global financial crisis, we took a deliberate decision to allow the naira to depreciate as part of the strategies to mitigate the effects of the global crisis. Today, that effectively means that governments at all levels receive (in naira terms) about 27 per cent more revenue from oil receipts than would otherwise. Indeed, but for this exchange rate change under this circumstance, there would not be more than 11 state governments that can still pay salaries on a consistent basis," he wrote.

The Professor of Economics said as elections draw near, the next four years are "very critical" to the next phase of national life as the nation celebrates 50 years of existence and begins another journey of 50 years.

"It appears that the future is foggy and serious discussions about that future - the new Nigeria in the next 50 years - have not begun. The debate so far is about who would be President or so, and not about what they will offer. I am afraid that we may again conduct elections without any serious issues being canvassed and 'winners' will emerge.

"There are no alternative visions, no ideologies and no programmes that offer the voters clear choices about their future," he said, warning that at current GDP and population growth rates, "Nigeria would still be a developing country in 2060 (below $11,000 per capita income). At current rates, it will only be in 30 years time (2040) that Nigeria will attain South Africa's current per capita income. The tragedy is that the country has no implementable plan to steer a different outcome," he wrote.

For Nigeria to take a shot at its 2020 targets, he said: "The economy needs to be growing at about 14-15 per cent per annum (more than twice the current rates of 6-7 per cent). Even with improved efficiency, this requires annual investment rates of more than 40 per cent of GDP (higher than total earnings from oil)".

But he said it is not all bad news for the country, explaining: "With economy-wide capacity underutilisation at about 60 per cent and oil prices at unprecedented levels, broadly shared growth rate of about 15 per cent is possible. This is where the debate needs to begin. Candidates and political parties need to outline their visions of Nigeria in the next 50 years and HOW they intend to rapidly create a broadly shared and sustainable prosperity."

He listed issues he expects presidential aspirants to discuss, the first being how they hope to reconstruct public finance "and put it back on the path of sustainability".

Soludo asked: "How can they rein in the obtuse and rapacious federal bureaucracy in particular and the state bureaucracies, balance our budget during this period of oil boom, and yet spend at least 40 per cent of the budget on capital expenditure as required by the Fiscal Responsibility Act? Where do candidates stand on political restructuring in the face of agitation for more states such that every village wants to become a state in so far as allocations continue to come from Abuja to pay salaries?"

He also asked: who has the strategy to achieve uninterrupted power supply over the 2011- 2015 period? Where is the strategy to ensure accurate population census with biometric data of every citizen? What is the magic wand to ensure that we have a free, fair and transparent electoral system where only votes count and all votes are counted? What is the new strategy to fight corruption? Where is the sustainable plan for the Niger Delta and the long term strategy for environmental sustainability of locations amenable to natural resource extraction?

Source: http://allafrica.com/stories/201009150742.html

I guess that the problem of Pres Jonathan administration is that his aides are not exactly intelligent, because this guy (Soludo) raise factual and obvious concerns which should be taken seriously by any serious person. Soludo spoke facts but i regret to see that Mr Maku's replies are B.U.L.L,
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by Nobody: 9:35am On Sep 16, 2010
^^^^

I don't blame Soludo for this hypocritical statement. Rather I blame the Presidency & our corrupt institutions that allowed him to continue strutting up and down the country after he had been clearly implicated in the rot in the banking sector. He even had the effrontery to contest Governorship election in Anambra state, a man that is clearly a candidate for KiriKiri prison.
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by otokx(m): 9:41am On Sep 16, 2010
Truly the government is at fault for allowing SOLUDO to walk free on the streets; he should have charged to court on multiple counts of financial recklessness.
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by Nobody: 9:55am On Sep 16, 2010
otokx:

Truly the government is at fault for allowing SOLUDO to walk free on the streets; he should have charged to court on multiple counts of financial recklessness.

You're right. He was the CBN boss and referees have been sanctioned for poor officiating which was exactly what he wa guilty of. Risk Management and scrutiny of banks under him was poor. His move for re-capitalization of banks was very okay but I think he or some people under him lost it. Sanusi is doing a good job though but I think it won't have been this bad if we had a Sanusi before the GEM
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by omojand: 9:57am On Sep 16, 2010
Soludu's making lots of sense. The last 3 years have been the worst, as far as fiscal and monetary policies go - in the last 10 years.

Despite the banking crisis, Soludu was a more progressive, charismatic leader overall. When economies expand at the pace seen during his time, gaps in policy implementation are bound to grow. Federal Reserve chairmen worldwide -  UK - Mervin King, US - Alan Greenspan etc made mistakes.


He is spot on. Nothing has been created, saved in the last 3 years. Yaradua's goverment laid the foundation for waste and excess! what is there to show for all that money? I'm convinced that there was much more curruption in the last 3 years in Nigeria (though covertly) than all of OBJ's years combined!
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by KnowAll(m): 9:58am On Sep 16, 2010
[size=14pt]The problem of Nigerians is that our so called political elites are a bunch of envious and jealous lot, Ibru and Akingbola’s bank are private banks started some 20 odd years ago. They built it to the conglomerate we have today.

If the owners are drawing down on their investment which is common in most businesses, I don’t see any problem with that, except of course the business is now a public company and listed in the stock exchange.

But come on we are talking Nigeria here where illegality is the what makes the society ticks, do u overkill because of a minor financial misdemeanour when there are more urgent and delicate issues to take care off. I see Sanusi ‘ s action as someone using a sledge hammer to kill a fly. If corruption has not permeated our financial industry why do we have a problem in NSE today.

No depositor in any of these Banks loss a Kobo or were prevented from withdrawing their money b4 Sanusi’s heavy handedness.[/size]
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by tkb417(m): 11:15am On Sep 16, 2010
even a plantain seller on the streets know Soludo aided the rot in the economy

after all said and done, hes going gung ho into politics after aiding and abetting massive fraud in the banking sector

who knows if his share of the loot is what hes using to campaign

animals
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by Ibime(m): 12:06pm On Sep 16, 2010
Forget what Soludo may or may not have contributed to the banking crisis.

His statement that Nigeria faces a worse form of SAP due to external debt and conditions that come with those debts hold a lot of merit. He is correct to say oil prices have increased without the attendant spillover into ECA and Foreign Reserve savings. The budget just increases astronomically as prices rise. A counterargument is that production levels have not kept up with the Obasanjo years due to MEND and such. Whatever the case, the fact that Nigeria is falling into new debts without the attendant improvement in infrastructure should be cause for alarm. In the spirit of fairness, I hope Soludo would equally agree that his statement is also an indictment of IBB and Olu Falae's SAP.
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by tkb417(m): 12:55pm On Sep 16, 2010
Ibime:

Forget what Soludo may or may not have contributed to the banking crisis.

His statement that Nigeria faces a worse form of SAP due to external debt and conditions that come with those debts hold a lot of merit. He is correct to say oil prices have increased without the attendant spillover into ECA and Foreign Reserve savings. The budget just increases astronomically as prices rise. A counterargument is that production levels have not kept up with the Obasanjo years due to MEND and such. Whatever the case, the fact that Nigeria is falling into new debts without the attendant improvement in infrastructure should be cause for alarm. In the spirit of fairness, I hope Soludo would equally agree that his statement is also an indictment of IBB and Olu Falae's SAP.
i thought the subliminal arrow in his message is that SAP was a failure
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by Moves: 1:31pm On Sep 16, 2010
The Minister of state for Information is chatting poo, How is it Soludo's fault that we are taking one more debt and fritted away $Billions that they saved when oil production was lower and price lower, Is it Soludo sharing responsible for sharing all the money or for our overbloated Cost of democracy expenditures, Let seperate the banking crises from this, even though I believe that Soludo negligence might have aided it, the banks chief's mismanaging funds with the aid of creative accounting and so called auditors should be held more accountable,
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by KnowAll(m): 2:34pm On Sep 16, 2010
[size=14pt]Barclay’s Bank in the UK mismanaged her funds and took some unprecedented risk during the sub-prime mortgage crisis, what did they do to re-coup some of the loss back, they offered a right offer at £0.45p per share, a lot people bought it then, I missed out, those who bought it early last year are smiling all the way to their Banks. Today the share is worth £4.75p that is almost 9 times the right offer price.

Today Barclays Bank is not only solvent but sound and back to their feet, all the panic and disaster of that era is now history.

What our CBN needed to do was to call IBRU and Akingbola to order, advise them to re-capitalise and all would be history, it is not rocket science. But what did our clueless Mallam Governor do, unleash a sledge hammer on what is a simple Banking procedure that can be reversed.[/size]
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by isimili: 5:10pm On Sep 16, 2010
Those in glass houses must not throw stones.

I am surprised that this castigation is coming so late. I don't think that i can remember any Nigerian who held a public or political office who leaves office in peace without being criticised.

Personally Soludo failed and and surprised me. I believe that if he had disappeared for a little while before showing his face in that ugly Anambra state elections, and return years after, he would have been spared the troubles.
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by naijaking1: 5:41pm On Sep 16, 2010
Our core financial and banking should have been immune to politics as much as possible, unfortunately, the arrival of Sanusi brought an end to age-old political neutrality of the CBN.

In the US, Ben Bernanke serves both republican and democratic administrations, and even though he's expected to tow the line of white house policies, he or his predecessor have never been as politicized as we have it in Nigeria these days.

I'll be happy to see Soludo prosecuted if the govt. and Sanusi can find actionable negligence or crime on him. I want this trial to take place, because it would be an opportunity to show the World that like many academic disciplines, banking is not an exact science by itself. Where a manager might have seen reason to grant a loan, another might equally see reason not to grant a loan. One can move interest up while another would move it down. Each of these bankers have their "well balanced" academic reasons--I hope.

While it's easy to retrospectively argue that one was more correct than the other, I don't think either constitutes and actionable crime. Sanusi himself has raised the bar on professional criticsm based on hindsight, and he too will be judged in the same way after his tenure ends.

If Soludo made so much mess while in office why did the goverment wait almost 2 years to say so, and only after he said some uncomplimentary things about the government?

Hopefully, after Sanusi, Soludo, and even Jonathan is gone we can all look back and really see who was right or wrong.
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by Nobody: 6:04pm On Sep 16, 2010
naijaking1:

Our core financial and banking should have been immune to politics as much as possible, unfortunately, the arrival of Sanusi brought an end to age-old political neutrality of the CBN.

In the US, Ben Bernanke serves both republican and democratic administrations, and even though he's expected to tow the line of white house policies, he or his predecessor have never been as politicized as we have it in Nigeria these days.

I'll be happy to see Soludo prosecuted if the govt. and Sanusi can find actionable negligence or crime on him. I want this trial to take place, because it would be an opportunity to show the World that like many academic disciplines, banking is not an exact science by itself. Where a manager might have seen reason to grant a loan, another might equally see reason not to grant a loan. One can move interest up while another would move it down. Each of these bankers have their "well balanced" academic reasons--I hope.

While it's easy to retrospectively argue that one was more correct than the other, I don't think either constitutes and actionable crime. Sanusi himself has raised the bar on professional criticsm based on hindsight, and he too will be judged in the same way after his tenure ends.

If Soludo made so much mess while in office why did the goverment wait almost 2 years to say so, and only after he said some uncomplimentary things about the government?

Hopefully, after Sanusi, Soludo, and even Jonathan is gone we can all look back and really see who was right or wrong.

Banking may not be an exact science but there are laws that guide banking practices like in most professional disciplines. Last time I checked, granting of loans without proper security/collateral is a crime under those laws, so also is concealment of directors' interests in loans granted, and these are just a tip of the iceberg where Akingbola, Ibru & co's recent activities in the banking sector are concerned.
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by naijaking1: 6:30pm On Sep 16, 2010
ziddy:

Banking may not be an exact science but there are laws that guide banking practices like in most professional disciplines. Last time I checked, granting of loans without proper security/collateral is a crime under those laws, so also is concealment of directors' interests in loans granted, and these are just a tip of the iceberg where Akingbola, Ibru & co's recent activities in the banking sector are concerned.

We're not going to restart the usual arguement of the banking sector that has been going on for the past 1 year.
However, there's no banking law that criminalizes lending, even without collaterals. What one manager may not accept as security, another more aggressive manager who wants to make profit for the company may accept as security.

When I used to work in a Nigerian bank, some of these securities included importation papers/bill of laden, contract award papers, and even share certificates. A manager might hold your import papers for goods worth 10 million naira when you're looking for 1million naira to clear and sell these items--that legal and practiced all over the World.

Government contracts used to be executed directly with bank financing, but the bank will hold papers asking that the proceeds of these contracts come directly to them, that's also legal. The petroluem importers were the latest example during the early days of Sanusi. The list goes on and on angry
Now, i don't have any experience with sharia or islamic banking, but I know that in modern western style banking granting bad loans maybe a mark of poor judgement or professional incompetence, but it's not criminalized.

If bankers give loans to themselves under false pretence, that may qualify for a crime and even bank directors are urged to declare their interest.
Re: Labaran Maku Says Banking Mess Is Soludo's Fault by 4Play(m): 7:16pm On Sep 16, 2010
Soludo's comments about the economy are valid. Of course, he's being hypocritical given his incompetence in his role as the country's banking regulator, but the Govt's ad hominen attacks do not address the substantive points he has raised.

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