Soludo’s Banking Revolution: A 20-Year Legacy of Transformation

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By: Paul Nwosu

History was writ large as the book written by Dr. Ray Echebiri entitled The Power of One Man: How the Soludo-Engineered Consolidation Transformed Nigerian Banks to Global Players was unveiled at Eko Hotels & Suites, Victoria Island, Lagos on Saturday, July 6.

The grand occasion marked exactly 20 years of the revolutionary banking reforms that culminated in the emergence of 25 banks that beefed up their capital base to a minimum of N25 billion under the watch of the then Central Bank of Nigeria (CBN) Governor, Prof Charles Chukwuma Soludo, CFR.

The Nigerian President at the time who gave Soludo the backing to undertake the landmark change, Chief Olusegun Obasanjo, was represented at the launch by the former Governor of Cross River State, Donald Duke.

The title of the book The Power of One Man is steeped in the Igbo lore of “Ike-otu-onye”. It informs that the power of one determined man can bring about profound change in the society. This does not discountenance the need for a team, but then the team needs a leader, and Soludo provided the needed leadership and drive.

In the review of The Power of One Man, the Senior Vice-Chairman and Editor-in-Chief of Leadership Newspapers Group, Azu Ishiekwene makes the case that the 2004 banking consolidation should serve as a historical record needed to guide the present time and shape the future. Ishiekwene avers that Nigeria can ill-afford to repeat past mistakes in this day and age “just as we forgot the era of failed banks, which landed the country in serious trouble” before the 2004 banking consolidation.

The Power of One Man should stand as a warning of the shape of dangers around. Ishiekwene states powerfully in praise of Soludo’s courage thusly: “Sometimes, to succeed and to succeed outstandingly, one must be prepared to blow against the wind”.

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Soludo, true to his typical humble being, states that the day belongs to the writer of the book, Dr Ray Echebiri, and not to him the maker of the banking revolution, Prof Soludo.

The banking revolution that has come to be hailed as “Soludo Shuffle” in which 89 “how-for-do” banks were reduced to 25 global banking institutions was akin to a godsend.

Before the coming of Soludo, Nigerian banks had been reduced to the laughing-stock of comedians who joked of how Nigerians were reduced to carrying mats to sleep in banks because of delays.

The inimitable comic actor, Lomaji Ugorji of “Icheoku” fame, was fond of asking “Where is my Tally Number?” as a mockery of the ill-assorted numbers then assigned to banks’ customers.

The impact and import of Soludo’s consolidation and reform had to happen to address the weak capital base, digitization, loan capacity, risks, global perception of the banks etc.

Following his appointment to the CBN post in June 2004 by President Obasanjo, Soludo blazed a trail that left his fellow countrymen and women almost breathless. Keeping pace with Soludo became well-nigh impossible. Barely a month in office, he met the Bankers Committee and promptly released a 13-point agenda designed to turn around the financial sector of the country. The feather on the crown was the banking consolidation initiative of Soludo.

Before consolidation, all of the banks in existence in Nigeria put together could not match one South African bank. The recapitalization initiative led to the making of 25 big banks out of the 89 banks previously in existence in the country, and Soludo was dubbed “Mr Consolidation”.

Through the efforts of Soludo, Nigerian banks have been able to go global. The banks opened up offshore branches, thus becoming true global players in the financial world. New York, Paris, London, and sundry capitals of African countries now count Nigerian banks and bankers amongst the top players.

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Soludo courageously made all the banks to adopt a common year-end strategy, thus stopping the hanky-panky stratagem of banks cooking their books. He stressed that the banks must undertake a strict observance of sound corporate governance. He upped the ante in macroeconomic stability, and through his efforts foreign investments found pride of place in Nigeria.

His work in the microfinance sector was also nothing short of revolutionary. Some 800-odd microfinance houses were granted licences, spreading across the country thus: Southwest 40.5 percent, Southeast 21.2 percent, South-south 14.3 percent, North-central 12.9 percent, Northwest 6.9 percent, Northeast 4.1 percent. The microfinance houses were meant to carter to the needs of petty traders, transporters, barbers, local farmers etc.

Soludo breathed fresh life into the Nigerian Security Printing and Minting (NSPM) Company, and he made ATMs a fact of daily Nigerian life.

A hands-on leader, he prefers to show the way through personal example. As Chinua Achebe wrote in The Trouble with Nigeria, “The Nigerian problem is the unwillingness or inability of its leaders to rise to the responsibility, to the challenge of personal example which are the hallmarks of true leadership”.

Soludo preaches the gospel of the old school that sees honesty as the best policy. He remains unafraid to jump into terrains where angels fear to tread. He dared all dangers in the banking consolidation struggle, as he reveals: “At a personal level, undertaking the banking revolution in Nigeria came with 19 written threats to me and my family, including physical attacks.”

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It’s noteworthy that Soludo in his epochal lecture entitled “The Purpose and Price of Disruptive Change,” had stated: “Every society that has prospered and endured has been led by men and women who have discovered a higher purpose beyond self. For such people, politics is a vocation for selfless service and not a job. Such people are driven by a single purpose to make a difference and leave legacies. Whenever and wherever competence is augmented with character and developmental ideology, the society wins.”

To demonstrate his deep appreciation of Soludo’s extraordinary contribution to the banking sector and by extention, governance, President Umaru Musa Yar’Adua who did not renew Soludo’s tenure ended up officially congratulating “Mr. Consolidation” via a letter written with presidential seal: “As your tenure as Governor of the Central Bank of Nigeria comes to a glorious end, I write on behalf of the Government and people of Nigeria to place on record our debt of gratitude to you for your dedicated service and uncommon sense of duty over the past five years. I am confident that your worthy antecedents in the CBN and in prior appointments in the service of our nation remain sources of inspiration to an entire generation. As I wish you even more astounding successes in the years ahead, it is my fervent hope that you will readily avail us of your distinguished service when the need arises in the future. Yours sincerely, Umaru Musa Yar’Adua.”

The Power of One Man: How the Soludo-Engineered Consolidation Transformed Nigerian Banks to Global Players is a penetrating testament to Soludo’s solution to Nigeria’s banking quagmire. July 6 every year deserves to be marked as the day of the banking revolution.

Commissioner for Information
Anambra State

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