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Socialist Democracy Aug - Sept 2005



Soludo Should Resign Now!

By Chinedu Bosah

It was shocking to Nigerians that Professor Charles Soludo's led Central Bank recently announced the decision of the apex bank to grant debt forgiveness to some commercial banks in the country to the tune of 82 billion naira.

The reasons given by Prof. Soludo are: "there will be massive payments of compensation of N17 billion to depositors by NDIC if the Central Bank does not come to their rescue since the affected 13 commercial banks are in distress and could be liquidated. That also 9.1billion naira of depositors would be uncertain and that if the banks are liquidated, the CBN will lose all the debts owed it by the affected banks but it can still retrieve about 20% of the debt if the 13 banks are granted debt forgiveness". This defense by Prof Soludo is a complete fraud. The primary duty of the central bank is to oversee and regulate the activities of banks in order to conform to the laws and not to arrogate to itself the powers to forgive debt or to deliberately fund private business with tax payer's money. For example, when Nigerians Airways and some other public corporations were to be privatised, this same rule did not apply.

The same government that has refused to subsidise basic commodities consumed by the masses is deliberately subsidizing private companies. Why did this government not pump this same 82billion naira into Nigerian Airways in order to revive it after bringing the bureaucrats who ran the corporations aground to book? The same Prof Soludo anticipates retrieving about 16billion naira (20%) of the debt and loss of 66 billion naira of taxpayer's money to these banks. No probe has been conducted so as to ascertain what happened to the 82 billion naira. It is just as if the money and the bank chiefs have disappeared to the blues

It is clear that this government rests so much on secrecy in order to perpetuate fraud. At least, Prof Soludo owes Nigerians explanation of the identity of the 13 commercial banks involved, their directors and bank chiefs, how this N82billion was utilized, which of the bank directors misappropriated this money? This is the only way a responsible government and its central bank should react to similar issues if really its primary responsibility is to protect its citizenry.

However, amongst the Nigerian working people, there are those who have direct relationship with these banks, such as the depositors and shareholders who do not know that they have been relating with corrupt and irresponsible banks. And the implication of this is that their money is most unsafe.

Although, under this capitalist system, banking is supposed to be carried out on the bases of lending money to productive outfit and intending ones with the view to collecting interest from the borrower which invariably should constitute their profit. But most banks today indulge more in financial crimes such as foreign exchange racketeering, money laundering and falsification of bank statements and accounts than lending of money for legitimate purposes. We are all witnesses to how Dr Olusola Saraki and the bank directors ran Societe General Bank aground; how Jim Nwobodo and wife ran Savannah bank aground; how over 30 banks had collapsed in the past ten years.

However, financial fraud is not limited to Nigeria, it is an international phenomenon. Recently, a bank in America in collaboration with Deloitte, Parmalat founder-Calisto Tanzi, 15 other executives and financial institutions plunged one of Italy's best-known banks into insolvency through a financial scandal of $17billion. In fact, these financial institutions and their collaborators stunned investors and shareholders of Parmalat in 2003 when it revealed that a 4 billion Euro bank account did not exist.

We have a government that runs this country on anti-people policies (privatisation, commercialisation, deregulation, liberalization etc) which rest on capitalist philosophy of neo-liberal policies that government should not be responsible to its people when it comes to creating the necessary infrastructures e.g. good roads, adequate functional schools, potable water, hospitals, constant power supply etc. The implication is that all these responsibilities are transferred to private individuals to run for profit. And these private individuals have at one time or the other contributed to the collapse of our public corporations. Such private individuals have only enriched themselves fraudulently through government contracts which ware never executed. And now, these set of people, owners of the 13 distressed commercial banks are being given a gift of N82 billion debt forgiveness.

Like the late Fela would say "'na padi padi government we dey". Just before the 2003 massively rigged elections, this same banks were part of corporate Nigerian led by the NSE DG Dr Ndi Okereke Onyuike that doled out 2 billion naira for President Obasanjo re-election. The same 13 banks were part of the banks that donated 622 million naira to Obasanjo Presidential private library. So one can see that it is pay back time, by giving them back 82billion naira in form of debt forgiveness, invariably helping the banks to re-capitalize at the expense of tax payers and the public while the same bank chiefs will in turn, use this money fraudulently, take away from the working people in connivance with those in power to buy our common heritage, public companies and properties.

There has been total wastage and corrupt practices not just nationally, but also internationally, where monies laundered worldwide according to IMF is close to 10% of the world's GDP, which is put at $2.5 trillion. Hypocritically, IMF and the imperialist, claim to be fighting this crime with huge sums of money. In order to stop these waste and sharp corrupt practices in the financial industry, the banks and finance houses must be nationalized and placed under democratic control and management of the workers.

We hereby demand immediate resignation of Prof Charles Soludo as the Governer of Central Bank. We also call on the federal government to constitute a probe panel that comprises of government representatives, workers representatives; representatives of the civil societies etc to probe into the 82billion naira fraud with the aim of retrieving this money back from the banks. This money should ultimately be used for the benefit of the working people such as building of roads, schools, hospitals etc.



Socialist Democracy Aug - Sept 2005