Professor Chukwuma Soludo, a former governor of Anambra State and governor of the Central Bank of Nigeria, has applauded the banking industry's recapitalization move, but he also stated that the new capital base, which takes effect in 2026, is insufficient given the devaluation of the naira.
At the book launch for "The Power of One Man," a book on the 2004 banking sector consolidation written by Dr. Ray Echebiri in Lagos, he lamented the high interest rates, along with the governors of Lagos, Ogun, and Kwara states and former President of Nigeria Olusegun Obasanjo, for impeding the nation's desperately needed economic growth.
Soludo, the supporter of the banking Nigeria's private sector grew as a result of the 2004 recapitalization operation, according to the consolidation that saw the country's bank count drop from 89 to 25.
While the consolidation had cost him his family's safety, Soludo pointed out that without strong banks, there could not be a private sector-led development. Instead, it had altered the trajectory of Nigeria's banking sector and opened up countless opportunities for the nation.
He praised the CBN for the recapitalization, which has increased the capital base of foreign banks by more than ten times, but he also pointed out that the nation's decision-makers need to be willing to pay a high price and demonstrate "self sacrificing" behavior without "serving personal interests."
In the meanwhile, he stated that the benchmark interest rate of approximately 30 percent has hindered the growth of both the public and private sectors. During the introduction, Lagos State Governor Babajide Sanwo-Olu bemoaned the state of the economy, stating that the public sector is having difficulty due to the burden of growing interest rates.
The Lagos State governor stated, "It is tough for the public sector at this time and we don't know how we will survive this interest rate regime," with the benchmark interest rate at 26.25 percent. Recall that Aliko Dangote, the president of the Dangote Group, had criticized the Central Bank of Nigeria for raising interest rates to almost thirty percent.
The renowned businessman additionally supported policies that, in the face of the current global economic difficulties, protect home businesses and develop them into native champions capable of creating jobs and promoting prosperity.
Former Cross River State governor Donald Duke spoke on behalf of former President Olusegun Obasanjo, who stated that the high interest rate will further impede the nation's growth and development.
As the book's chief guest of honor, Obasanjo stated that governments shouldn't combat inflation at the expense of economic expansion. He stated that an interest rate of more than 20% at the Treasury Bills end of the market will merely divert investments from vital industries and direct them into the money market, pointing out the large profits at that market.
Obasanjo, the one who talked Duke also asked the CBN to make sure that bank ownership is evenly distributed and that no single person owns more than 5% of the shares in any one bank. He says there's an institutional risk here.
Although the CBN, led by its former governor, Sanusi Lamido, had restricted the length of time bank chiefs could serve, he claimed the CBN had "played smart by half" by switching to holding companies, which allowed them to maintain control over the banking institutions.
The book “The Power of One Man – How the Soludo-engineered Consolidation Transformed Nigerian Banks to Global Players” details the events of the 2004 banking consolidation and was reviewed by Azu Ishiekwene, senior vice chairman and editor in chief of LEADERSHIP Newspaper Group.
acts as a historical chronicle that might influence the present and possibly the future.
In the same way that we easily forgot the period of bank failures that put the nation in significant danger because those institutions' mistakes were repeated, he observes that it is simple to forget what occurred prior to the consolidation of Nigerian banks in 2004–2005.
"Echebiri's endeavor in this book to aid in memory is not the final instance in which we will recall, merely to forget." However, it wouldn't be for lack of warning if we were to find ourselves in that dark place once more, which we nearly did not too long ago and may not be quite out of.
Observing that the consolidation of the Soludo era might not have been as successful if it hadn't benefited from the surge in oil prices, which made it possible for investors to allocate surplus funds to share investments, Without discounting the fervor, concentration, and foresight that carried out the consolidation, Ishiekwene stated, "the surge in oil prices is but one illustration of how generosity can occasionally help heroes break through their shells.
The title, idea, or premise of this book does not inherently address the dichotomous question of Teams vs. One. Or the reality that, on occasion, success in life depends on serendipity, collaboration, and the resolute support of the highest level of political leadership. However, the book demonstrates that sometimes one must be willing to go against the grain in order to achieve—and succeed spectacularly at that.
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