• Mark: Banking consolidation, divine intervention
From Kunle Aderinokun
The Central Bank of Nigeria (CBN) Governor, Prof. Chukwuma Soludo, has said Nigeria and the rest of the world should be prepared for the next economic crisis, which is bound to occur at any point in time, due to the innovative and dynamic nature of the global economy.
Speaking at the International Conference to mark the 50th anniversary of the CBN in Abuja, yesterday, Soludo said: “no matter the quality and quantum of efforts we make for the current global economic crisis, another one is bound to happen.”
Senate President David Mark also appraised the banking sector consolidation, describing it as “divine intervention”.
Soludo said since there is increasing globalisation, the world economy is “inherently crisis-prone and inherently unstable”.
He said: “In a world of increasing globalisation, the world is inherently crisis prone, inherently unstable- and therefore if there is any lesson that we are taking home from here today, it is that the CBN, Nigerian government and indeed African governments as well as the rest of the world, while we are learning lesson from the current crisis, we must now go back and begin to prepare for the next crisis because there will be crisis in the future.
“No matter what effort we make today to deal with the current crisis, we will only deal with the current one.... in market economic framework of innovation, we will always come up with other framework that will also trigger new crisis.”
Soludo explained that the way the world is intertwined in a globalised economy today, any shock from any country could trigger a crisis around the world. But he added that, despite the globalisation, each country of the world was still an independent and highly-protected, with each government fending for its own people.
He said: “We have a globalising world with almost a global economy to the extent that one shock in one end could trigger off crisis around the world. The globalised economy is being managed by about 190 independent entities, each one with the responsibility to provide jobs and prosperity within its own power. In that world, each government with its own citizens as the immediate constituency, to whom it must be accountable, is therefore under pressure to protect and deliver to the benefit of its own constituency. No matter what we try to do, that world is still a highly protected world, in which each one try to maximize the interest of its own.”
Noting that the challenges stemming from the global economic crisis was even greater, Soludo however ruled out any bailout package for any bank or organisation as the Federal Government could not afford such.
He pointed out that, already, the national budget was a stimulus package.
“For us as a developing world, the challenges are even greater. People talk about bailouts, stimulus packages, that is what you hear now all over the world. Unfortunately, whenever people ask me, Americans are doing stimulus packages, other people are doing this and that, why aren’t you? I remind them that the national budget is a stimulus package- both the state budgets and the Federal budget, if we put them all together for the last seven years, they are already a stimulus package. But more fundamentally, when they asked why is it that these people are doing it? I answered, you do so if you can, you do so if you can afford. That’s part of the unfairness of the global economy. Some people can afford it, others cannot. That’s part of the realities of the global economic system,” he said.
Senator Mark, while saying “the successful banking consolidation exercise” was designed by God to save the nation’s economy from collapse, observed that it now serves as a buoy for the economy in the face of the continued global economic crisis.
Mark was speaking at the inauguration of the CBN Currency Museum, as part of activities to mark the 50th anniversary of the CBN.
He said but for the financial sector consolidation exercise, the country would have been swept away by the storm that had been raging from the global crisis.
He urged Nigerians to thank God for the feat recorded through the landmark exercise driven by Soludo.
He said: “I think the financial sector consolidation programme by Prof. Soludo is divine intervention for the Nigerian economy, looking at the global financial meltdown now.
“We have every reason to celebrate that programme and also to celebrate CBN at 50 because it’s worthy of celebration. I hope when Nigeria attains 50 years of nationhood, she would have a reason to celebrate.”
Soludo explained that the idea of the Currency Museum was mooted to have a data bank of Nigeria’s currency evolution preceding even the CBN in 1959. -Thisdayonline