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Bank Recapitalisation: Learn from Soludo’s strides, Lagos, Ogun govs urge CBN – Tribune Online

By Chima Nwokoji

Governors Babajide Sanwo-Olu of Lagos State and Dapo Abiodun of Ogun State have urged the Yemi Cardoso-led Central Bank of Nigeria (CBN) to learn from the accomplishments of Professor Chukwuma Soludo and implement a seamless banking sector recapitalization exercise from 2024 to 2026.

Professor Chukwuma Soludo, the former Governor of the Central Bank of Nigeria, led a banking recapitalization program between 2004 and 2005 that transformed Nigeria’s banking landscape.

To mark two decades of this landmark banking reform, political and business leaders, economists, analysts, and financial media gathered for the launch of the book “The Power of One Man: How Soludo Engineered Consolidation Transformed Nigerian Banks to Global Players,” written by Dr. Ray Echebiri, a notable economist and journalist.

In their goodwill messages, Governors Babajide Sanwo-Olu and Dapo Abiodun commended the author for documenting the 2004-05 recapitalization exercise.

They described the now Governor of Anambra State, Charles Soludo, as a reformer and a man worthy of emulation.

The Deputy Governor in charge of Financial System Stability at the CBN, Mr. Phillip Ikeazor, who represented Mr. Yemi Cardoso, the current CBN Governor, lauded Professor Soludo for the reforms that transformed the banking system 20 years ago.

He assured stakeholders that the CBN is committed to building a robust, resilient, and fit-for-purpose banking system in the upcoming 2024 to 2026 exercise.

According to the CBN Governor, the apex bank will soon be able to slow down increases in the benchmark interest rate.

“For us as a central bank, we are focusing on our core mandate of price stability, maintaining a stable exchange rate, and, of course, economic growth. But it is a question of sequencing. It is very important that we do not enter hyperinflation. Once you enter hyperinflation, the transmission of monetary economic tools becomes completely ineffective. It is important that we avoid that.

Regarding the duration of the rate hikes, the regulator said, “That will be as long as we can control and reverse galloping inflation. Once we can do that, we maintain. We are all aware that in the Western world, rate hikes were used to control inflation and maintained for a very long time.

” It is only now that they have stopped rate hikes but they have not even started dropping the rates as we speak. It is important that we tighten and hold on for a little while and in no distant future, we will be able to slow down on the rate hikes.”
Professor Soludo, the current Governor of Anambra State, thanked Nigerians for the confidence they placed in him during the banking recapitalization 20 years ago. He attributed the success to teamwork with Deputy Governors like Mr. Tunde Lemo and Mrs. Sarah Alade.

“The recapitalization exercise of 2004 to 2005 demonstrated the infinite possibilities of Nigeria, and the watershed is that today, the Nigerian banking system has the capacity to fund economic activities. We have seen remarkable innovation, technology adoption, and the financing of significant infrastructure projects and the aviation industry,” he stated.

Governor Soludo informed stakeholders that the reforms came at great personal risk to his family. The recapitalization exercise faced significant opposition from vested interests.

He thanked former President Obasanjo for his political will and support.

In his opening address, Dr. Ray Echebiri said his motivation to write the book was the Soludo-led banking recapitalization exercise, which transformed the financial system.

He said, “Professor Soludo guided the process to a resounding success, and his performance reinforces the need for the right leadership recruitment in Nigeria’s economic management.”

Chairman of the occasion, Professor Akpan Ekpo, former Director General of the West Africa Institute of Financial and Economic Management (WAIFEM), noted that before Soludo’s consolidation of the banking system, the sector was wobbly.

He commended Dr. Echebiri for documenting the 2004 to 2005 recapitalization exercise and lauded the former CBN Governor for his courage, patriotism, and determination to implement the program.

“The Soludo recapitalization era enabled the Nigerian banking sector to navigate the 2008-2009 global financial crisis because of the robust reserves and strength of the banks. In any economy, you must use the right people to drive economic activities to achieve sustainable growth.
”Delivering the review, Mr. Azu Ishiekwene, Senior Vice Chairman of Leadership Newspapers, described the book as a testament to the serendipity, teamwork, collaboration, and political will Professor Soludo forged to achieve the recapitalization exercise’s objectives.
He noted that the former CBN Governor demonstrated that to make critical and transformational reforms, one must go against the wind.

Former Governor of Cross River State, Mr. Donald Duke, representing former President Obasanjo, led the formal unveiling of the book. He urged the CBN to strengthen the governance system of banks to ensure their sustainability as the banks brace for another round of recapitalization.

Obasanjo advocated for appropriate fiscal and monetary policy synergy to revolutionise the banking industry and achieve economic stability.“To sustain this growth, there must be appropriate consultations between fiscal and monetary authorities,” he said.

Meanwhile, stakeholders in the country have called for political will to support monetary policy actions that promote economic growth, as seen during the period between 2003 and 2007.


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