Professor Chukwuma Soludo, former Central Bank of Nigeria (CBN) governor and current Anambra State governor, has lauded Nigeria’s banking industry for its recent recapitalization efforts. He however, expressed concerns that the new capital requirements might not suffice in light of the depreciation of the naira.
Soludo made these remarks at the launch of “The Power of One Man,” a book about the 2004 banking sector consolidation written by Dr. Ray Echebiri.
Soludo, who championed the consolidation that reduced the number of banks in Nigeria from 89 to 25, acknowledged the exercise’s impact on the country’s private sector growth. He emphasized that strong banks are essential for private sector-led development and commended the CBN for the recapitalization move, which increases international banks’ capital base by over 10 times.
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However, Soludo and other dignitaries, including the governors of Lagos, Ogun, and Kwara states, as well as former President Olusegun Obasanjo, expressed concerns about the high interest rate, currently at nearly 30%. They argued that this rate hinders economic growth and makes it challenging for both the private and public sectors to thrive.
Obasanjo, represented by Donald Duke, urged policymakers to balance inflation control with growth promotion, emphasizing that high interest rates will only drive investments away from critical sectors. He also advocated for policies that safeguard domestic industries and cultivate them into indigenous champions capable of generating jobs and fostering prosperity.
Azu Ishiekwene, senior vice chairman and editor-in-chief of LEADERSHIP Newspaper Group, praised the book as a historical record that could guide the present and shape the future. He noted that the 2004 consolidation, though successful, was partly due to favorable circumstances like the oil price boom, and emphasized the importance of teamwork and leadership in achieving success.
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The book launch highlighted the need for policymakers to prioritize the greater good over personal interests and to be willing to make sacrifices for the country’s economic growth. The high interest rate and its impact on the economy were also a major focus of discussion.
