Company: Central Bank of Nigeria, Abuja, Nigeria

Company Description: As Governor of the Central Bank of Nigeria (CBN) since May 2004, Prof. Soludo has embarked on ambitious reforms of the CBN and the entire financial sector. The most significant aspect of these reforms was the requirement for all the deposit money banks to raise their capital base to a minimum of N25 billion.

Nomination Category: Individual Awards Categories

Nomination Sub Category: Best Finance Executive

Nomination Title: Charles Soludo, Central Bank Governor

   1. Tell the story about what this nominee achieved in the past year (up to 500 words). Focus on specific accomplishments, and relate these accomplishments to past performance or industry norms. Be sure to mention obstacles overcome, innovations or discoveries made, and outcomes:

3. Prof. Soludo's Achievements

To guarantee capital adequacy, liquidity and zero tolerance regulatory frameworks in the Nigerian banking sector, Prof. Charles C. Soludo initiated the Banking Consolidation programme in July 6, 2004, which was concluded in December, 2005.

Outcomes

The exercise saw 75 banks coalesce into 25 strong banks with larger capital base of over $5billion each within a short span of 18 months from 89 banks with less than $3billion. This enhanced liquidity in the banking sector, forcing interest rate down and raised credit to private sector from less than 5% to 40%. As a result, non-oil sector grew by 8.5% in 2005.  The successful consolidation of the sector helped to minimize cyclical distress

among the banking sector and improved corporate governance within the banks.  It also boosted the capital market with additional N500 billion, the highest non-oil related investment ever mobilized within a space of 18 months and raised share of market capitalization by banks from 30% to 50%.  Interestingly, the cost of Liquidation was less than 1% of GDP, the lowest ever in the history of banking sector consolidation in the world.

Opposition

The bold initiative of the banking sector consolidation was met with stiff opposition from vested interests. The exercise was greeted with much

condemnation and cynicism from vested interests- (directors of weak banks and depositors with fund in the weak banks).   The 18 months notice within which banks were to finalize the consolidation was regarded as too short. As a palliative, the Central Bank of Nigeria (CBN) had to propose a forbearance policy to bailout weak banks with the condition that insider related credits were recovered.  Possible liquidation of banks not likely to meet the capital requirements also gave added impetus to the opposition.  As a counter measure, mergers and acquisition was proposed to minimize the burden of banks that might not be able to raise the capital base alone.  The anxiety that depositors might likely lose their fund in the event of

liquidation of the weak banks posed another problem. In response, the CBN provided 100% cover for depositor affected by the liquidation.  

Innovations

To reposition the CBN to discharge its supervisory role, Prof. Soludo created the Monetary Policy Department to fill up noticeable capacity gaps in order to strengthen monetary policy formulation and monitoring.  The Bank deployed IT infrastructure such as e-FASS, T-24, Oracle-ERP and RTGS in order to enhance productivity and supervision of the banks. The CBN also issued new sets of code of corporate governance guidelines to banks. This was intended to minimize the hitherto undue influence of directors and eliminate the dominance of a bank by a single family.  The successful completion of the financial sector reform and the bank consolidation exercise provides a veritable framework for efficient resource allocation with a private sector-led market economic management as enunciated in the National Economic Empowerment Development Strategy (NEEDS).   This major feat achieved at a least cost to the economy compared to similar reforms in other parts of the world deserves some commendation. 

   2. List hyperlinks to any online news stories, press releases, or other documents that support the claims made in the section above. IMPORTANT: Begin each link with http://, and enclose each link in square brackets; for example, http://www.youraddress.com:

4. Supporting Claims on Prof. Charles Soludo Achievements

1.0       African Economy Magazine

At the 2005 Annual Meetings of the IMF/World Bank in Washington, DC the publishers of the Annual Meetings Daily and African Economy Magazine awarded him "The Global Central Bank Governor of the Year, 2005" , citing the result of his financial sector reforms as unprecedented anywhere within such a short period of time.

2.0 Newswatch Magazine, January 9, 2006, e-mail: newswatchngr@aol.com

The idea was greeted by widespread protestations, condemnation and cynicism but Soludo was unrelenting in his resolve to battle vested interests and an influential corporate constituency in order to successfully ensure compliance with the N25 billion recapitalization directives. This has been the single most important thing that has happened to the economy for a long time. And his success in ensuring compliance makes him a joint winner of the Newswatch's Man of the Year 2005.

3.0 The Banker Magazine published by the Financial Times of London:

In a citation published in a special edition to mark The Banker Magazine's 80th anniversary, it said of Professor Soludo's successful execution of the first phase of the banking sector reform: Website: www.thebanker.com

The scale of the transformation, the difficulty of the obstacles overcome, the emphatic on-time success of the plan and the early positive outcomes all add up to an achievement that puts Mr. Soudo clearly ahead as THE Banker's 2006 Global Central Bank Governor of the Year. The Banker, January 2006 edition

4.0 ThisDay Newspapers of Nigeria: Website: www.thisdayonline.com

To economic watchers, there is no policy change that has been so fundamental and far reaching in its future impact, than the current banking sector

reforms. ThisDay Newspaper, January 14, 2006.

5.0 Daily Independenct Newspaper: website: www.independent ng.com  

In making Professor Charles Soludo our man of the Year, we are applauding his managerial skills in steering through the reforms, in sticking to his timetable and his unwavering self-confidence and composure in the face of skepticism and widespread discomfiture. The fact, however, is that he pushed his conviction through in a difficult terrain and we applaud his courage. Daily Independent Newspaper, January 2, 2006.

6.0 Leadership Newspaper of Nigeria

Succeeding against all odds in transforming (not just reforming) the banking and financial landscape of Nigeria within so short a time, and doing so forever, Professor Charles Chukwuma Soludo, the ninth governor of the Central Bank of Nigeria is our 2005 man of the Year. Thanks to "the Soludo Solution", as the consolidation in the banking sector inspired by the CBN Governor is now widely known; taxi drivers, market women, students, junior civil servants, artisans, the old and young, illiterates have become shareholders, not only of fragile banks that used to exist on these shores but very big banks with a minimum N25 billion capital base.  Leadership Newspaper, January 1, 2006.

   3. Provide a brief (up to 100 words) biography about this nominee:

Born on July 28, 1960, Charles Chukwuma Soludo hails from Isuofia, Aguata, Anambra State Nigeria.  He has very outstanding undergraduate and post-graduate training in Economics from the University of Nigeria Nsukka. 

Prof. Soludo has had extensive research, teaching and work experience in some of the world's best research institutions, universities and multilateral financial institutions.  As the Chief Economic Advisor to President Obasanjo in 2003, Prof. Soludo coordinated Nigeria's economic and social reform program (2003-2007) - the National Economic Empowerment and Development Strategy (NEEDS), which aided the debt relief for Nigeria.  He was voted the world Central Bank Governor of the Year, 2006.