$7 billion: Why Falana must apologise to me – Soludo

Charles Soludo
Charles Soludo

A former Governor of the Central Bank, Chukwuma Soludo, has insisted that senior lawyer, Femi Falana, apologise for making incorrect allegations.

Mr. Falana had called for Mr. Soludo’s probe, after he accused the former bank chief of doling out $7 billion to commercial bankers while he was in office. The Senior Advocate claimed that the loan was never returned by the beneficiary banks.

Mr. Soludo has, however, clarified the disbursements; saying it was never a loan, but deposits placed in the appropriate banks by the federal government.

“I can’t believe that the learned and respected Senior Advocate of Nigeria does not know the difference between a bank LOAN and a bank DEPOSIT,” Mr. Soludo said.

The former Central Bank chief added that “none of the 14 Nigerian banks needed a loan or requested for a loan, and the CBN did not grant any loan with our foreign reserves.”

Read Mr. Soludo’s full statement below:

FEMI FALANA CONTINUES TO LIE: I INSIST ON HIS APOLOGY

Chukwuma Charles Soludo

I have just read further statement from Femi Falana in response to mine and his position that he does not need to apologize to me but that instead I may wish to direct my demand for apology to Mr. Festus Odoko (then head of corporate affairs at the CBN). I hereby further wish to state as follows:

When I read Falana’s original statement, claiming that he had “evidence”, that I ‘dolled out’ $7 billion of foreign reserves to banks as a LOAN, I denied the charge and challenged him to publish such evidence. His “evidence” turns out to be a newspaper report quoting the announcement by CBN through Mr. Odoko that “deposits worth $7 billion representing the apex bank’s share of the foreign reserves estimated at about $38 billion has been released to the consortium of bankers” (The Guardian newspaper of 5/10/2006). The same newspaper report noted that the Investment Committee of the CBN (charged with responsibility for deciding where and how our foreign reserves should be kept) approved the decision to allow 14 Nigerian banks with capital base of more than $500 million to be part of the consortium of banks that hold our foreign reserves as deposits.

In all honesty, I can’t believe that the learned and respected Senior Advocate of Nigeria does not know the difference between a bank LOAN and a bank DEPOSIT, and there is no way I would have imagined that he was referring to the deposits with banks as LOAN. As I stated in my earlier response, Nigeria’s foreign reserves are required by law to be kept in foreign currency abroad. This has been kept either as deposits in banks or invested in sovereign instruments such as the US treasury bill. Before 2006, none of the Nigerian banks was considered big enough or with the infrastructure to manage our foreign reserves. Consequently, our reserves were kept with a consortium of other countries’ banks such as JP Morgan Chase, USA, UBS of Switzerland, Citibank, USA, Bank for International Settlement (BIS), Switzerland, etc. Indeed, in much of the 1990s especially under Gen. Abacha, our reserves were almost exclusively kept with BIS Switzerland.

After the consolidation of banks by December 2005 and as part of our long term vision that Nigerian banks should ultimately take charge and manage Nigeria’s entire foreign reserves, the CBN took the patriotic step of allowing the biggest of our banks to join the consortium of other countries’ banks holding our reserves as deposits. The CBN decided as a first step to give the biggest Nigerian banks a small portion of our reserves, $7 billion as deposits, while the remaining $31 billion as at that date remained with other countries’ banks as deposits and other investments.

It is interesting that Femi Falana would refer to the deposits held by Nigerian banks as LOAN while saying nothing about the other deposits with other countries’ banks.

Let me state that none of the 14 Nigerian banks needed a loan or requested for a loan, and the CBN did not grant any loan with our foreign reserves. As I stated in my earlier statement, the CBN Act does not allow the CBN to grant loans with our reserves to banks, and no loan was ever made. Chief Falana is therefore looking for a repayment of a LOAN by banks that never existed in the first instance. Under my tenure, Nigeria’s foreign reserves grew from $10 billion to all time high of over $62 billion and due to our efficient management, Nigeria never lost a penny of it.

Finally, I must say that I don’t believe any of the conspiracy theories flying around, including those who question the motive, timing, and content of his bogus claims, and some even allude to it as a hatchet job. Going into the archives to fish out a newspaper report of 10 years ago about deposits and making up a fantasy story around it to become a loan, could give anyone cause for suspicion. Even several of the allegations against my successor, Emir Sanusi, are laughable and betray a lack of most elementary knowledge of how a bank such as the CBN works. As one of his admirers, I want to believe that this is one of those cases he is proving to be human after all and therefore could get his facts completely wrong. It may be challenging for him to admit his error and apologize, but if he is not on a mission, it is the only honourable thing for him to do.


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  • Olu from South Africa

    “Under my tenure, Nigeria’s foreign reserves grew from $10 billion to all time high of over $62 billion and due to our efficient management, Nigeria NEVER lost a penny of it”- Prof Charles Soludo…… I wish madam Ngozi can come out and make a declaration like this one. Respect Prof Soludo.

    • Höly Wähala

      You are so stoopid you forgot that Soludo worked under Dr. NOI.

      • Amir

        It is not who you worked under. It’s what you achieved. For Ngozi she is the world’s most overrated failure. Without software such a mind would have finished World Bank where she was just an admin manager before Obasanjo picked and sacked her.

        • FuzzyLogic

          The current finance minister who is your sister does not even know what recession is. She calls it ‘mere words’ while thousands of factories and closing shop and laying off millions of workers. She is not in the same league with Ms Iweala. She inspires confidence in no one both with her demeanor and personality. I guess Buhari put her there to placate Tinubu. Obviously she in over her head.

        • Amechi Nwali

          But late yaradua picked her back nah

      • Rommel

        Are you crazy? you mean central bank is under ministry of finance? which school did you attend?

        • Höly Wähala

          You are the academic moron here… The CBN Governor is a member of the Economic Management Team, a member of the NEC and thus, does not work in isolation. Where educated people are discussing… Shut-up! Monkey.

          • FuzzyLogic

            Going by the constitution, The CBN governor is more independent than the FInance Minister. Even the sitting President cannot remove him/her but can only refuse to extend there 4 year term. This is deliberately put there to make the Governors discharge their duties devoid of politics. What Jonathan did to Sanusi was unconstitutional. Ofcourse the constitution is just a piece of paper that no one in power cares about.

          • Höly Wähala

            The issue is whether he is a member of the EMT or not… Go siddon with odeku biko! You need’am…

          • Rommel

            You see your life, can you see what you have turned yourself into? how everyone now knows that you a moron

          • Höly Wähala

            Hahahahaaa… defeated academically. Now claiming names that I invented here that went viral, you are the illiterate moron who does not know the simple modalities of governance. The issue and your blunder remains: The CBN Governor is a member of the EMT. Learn that today… “Aborigne education is contaminated education” was what I used to type to @Deri Orbuka, you have just confirmed that. Monkey! IMBECILE.

          • Rommel

            You are unbelievable!!!!!!!!!!!!!!!!

          • Höly Wähala

            Imbecile… The CBN Governor is a member of the EMT.

        • Dele Awogbeoba

          The man is ignorant. Soludo worked under OBJ not NOI.

          • Höly Wähala

            Fraudster… I taught you that the MPC decides on monetary policies so, how could you have told me anything about the BO? It was I who correctly told the world that you had been grandstanding to that Dr. NOI initially resigned as Finance Minister bcos OBJ wanted to remove the BO from her ministry… so how could you have possibly told me about the implications of things that I am an expert on? I successfully defended NOI online for 4yrs dirty Yoro idyiots like you and Falana have been attacking her, how could I have done that if I’m not an expert on developmental economics? But watch Kemi closely, I will sack her from that office and revert to a vanquished, poorly-educated Yoruba tout like you. Monkey, you can never ignor me, you posted most your comments under my iconic moniker with. “For Attention Readers Only…” Remember? Ingrate Yoro imbecile… Hateful bigot!

        • Olu from South Africa

          I replied the dumb ass, @Höly Wähala, I don’t know why PT keep blocking it.

    • Amir

      At least NgozI used Jona dumb to pay off her crippling mortgage in the US.

      • Höly Wähala

        Who told you she had crippling bills to pay off? Moron, it was not for nada that Dr. NOI negotiated her salary in dollars, it is so she wouldn’t need to steal from paupers like you. This topic is about Falana vs. Soludo, no where in the article was NOI mentioned but it’s imbeciles like you bringing her into your miseries as if she’s still your problem. Animals!

        • Amir

          Next time you rant your empty brain here I publish her mortgage overhang and how much was rapidly paid as soon as she got the post in Nigeria. Ewu. Do you think every one is like the literate failure that Ngozi was. Under her tenure a Nigerian president was labelled ineffectual buffoon. Did Ngozi not work under a clueless Jonathan administration? Anuofia, go find a job. Schwarz ashlecker.

          • Höly Wähala

            Publish it punk, private finances are personal business so, whatever fake Yoro oluwole data you publish must be verifiable. Monkey! Animal. Fuck-off jare!

          • FuzzyLogic

            She is a failure but your current president is on his knees begging her to come and help him. She of course has given him the cold shoulder that he eminently deserves.

            She is one of the most influential women in the World. A prophet of course has no honor in his hometown. Tribalism will continue to rob you and your Falana of the academic joy that comes with objective analysis.

          • sylvok

            Buhari is the most clueless president Nigeria will ever get. infact he has put Nigerian progress in full reverse gear. lol

    • Mayo

      Iweala was finance Minister while Soludo was CBN governor – 2 different posts.

      • Olu from South Africa

        I need not be told. Let madam come out and tell us what happened under her leadership. For example, how “beautiful” she left our economy and how she contributed to the growth of our ECA.

        • FuzzyLogic

          Right now they are secretly on their knees begging her to help rescue the sinking ship of state. She has rebuffed their overtures and told them that there are other competent Nigerians who are not from Daura but capable of doing the job.

          • Kamalu

            Fantasy!! The glorification of Ngozi Okonjo Iweala by a group of Social Media Paparazzi is becoming weird and ignominous. People had better leave the woman to carry her cross

          • Olu from South Africa

            Not until we see her behind bars for economic treason against humanity.

          • Kamalu

            You heard the Chairman of the Transition Committee between Dumbo Jona and PMB’s Government that the woman was incredulously crafty. She left nothing behind with which to throw her into prison. People should leave her to her conscience. I have repeatedly said it in this forum that she devilishly employed her proven technical abilities when she had the opportunity to showcase her prowess in leadership. It’s such a missed opportunity but some people akin to flies wants to be lowered to the same grave like the woman. Shame! Shame!!

          • Olu from South Africa

            In your dreams. You better wake up!

  • NWODOH COLLINS

    Falana has taken into weeds since his hope of securing a job under Buhari government hit the rock.

    Soludo should sue his sorry ass to court else he will keep on disgracing himself

  • DanielOsazuwa

    Prof is trying to be a Prof with this his NEW explanation about LOAN or DEPOSIT. The question is where is the $7 Billion that was given to 14 Nigeria Banks including Oceanic Bank and Intercontinental Bank.

    That is the issue here Prof. Please don’t pollute the water with semantics.

    • Mayo

      No. A deposit is different from a loan. One of our problems in Nigeria is that we tend to be loose with words. During the Ebola crisis, Lagos government announced there were new suspected cases of Ebola, the FG through the Health Minister announced there were no new confirmed cases of Ebola. Papers went to town that the FG was on a different page from the Lagos govt and it was due to politics. But if you looked at their words, they were not. One person talked about suspected while the other talked about confirmed.

      • DanielOsazuwa

        My friend I don’t involve myself in demagoguery. Call it by whatever name, the fact still remain that $7 billion left the Nigeria government treasury to 14 Nigeria Banks.

        When Oga Soludo made his rejoinder to Falana petition last week Friday, he never made mentioned of placing deposit with any Bank. Going through Falana petition also, there is no where he said the money was given as loan to the Banks.

        Facts a scared.

        • FuzzyLogic

          Has Nigeria recovered the $500 Billion, yes $500B, your brother Oshiomonkey claimed that the US government told him was frittered away by Jonathan’s aids? In times of economic crisis unstable people usually look for scapegoats where none exists. The same Falana has been chasing and harassing Ngozi Iweala all over the world with nothing to show for it. He gives the SAN award a bad rap.

          • Rommel

            The figure they put out was more like $150 billion and not your sarcastic $500 billion,the figure they put out is realistic considering what we now know.

          • FuzzyLogic

            Even the minister of Justice put out a far greater number. It is grossly exaggerated. That is more than 30% (your $150B) of all crude oil sales by Nigeria since 1970. They just through the numbers around with reckless abandon because Nigerians don’t hold their feet to the fire.

          • Mufu Ola

            Ngozi has a lot to answer.Her time is coming.

        • Mayo

          From Falana’s original statement

          ….Sometime in 2006, former Central Bank Governor, Profesor Chukwuma Soludo removed $7 billion from the nation’s external reserves and doled it out to 14 Nigerian banks. Two years later, the Central Bank Governor, Mallam Sanusi Lamido Sanusi (the current Emir of Kano) also gave a bailout of N600 billion to the same banks. The request of some civil society organisations for the recovery of the huge loan of $7 billion and N600 billion from the commercial banks has been ignored by the management of the Central Bank….

    • sylvok

      was the account opened with his name? when he left office would he be receiving alerts of the account? the people that took over from him never complained the deposit disappeared. again, even if the banks merged or was acquired by another bank the banks that acquire them are still existing and they acqired both assets and liabilities of the former banks. it is as simple as ABCD. the dullards that voted change in Nigeria are now looking for their heads on another peoples shoulders. lol

  • UmuOmoAlhaji

    Prof,teach the lawyer.

  • Rommel

    This is getting interesting by the hour,it means that Mr Falana is unto something tangible as clarifications are now being made,whether it is loan and deposit,what is the status of the $7 billion now? has the CBN recouped it?

  • Oloriebi

    Hmmmm, Lies can endure for several years, the truth will catch up someday. Prof gave these banks that were clearly in need of life support, soft loan and called it ‘deposit’. If the story had ended there, prosperity may forgive Prof but guess what? Prof was collected “side” interest on deposits from the banks. Is it not surprising that the banks that got the largest chunk of the money were no more today. I will strongly advice Prof to let sleeping dog lie else…………

    • sylvok

      hahahaha wake up guy. Nigerian dullards.

  • serubawon70

    As a layman what I see here is a book of Revelation of Questions; 1 How can Central Bank, the ultimate holder of Ngeria’s wealth make deposits with commercial banks it is supposed to be regulating? 2 Who is the account holder and signatory to the accounts? 3 What has the account holder been doing with these deposits? If Soludo can give answers then we know if Falana should apologise or not

    • Rommel

      Because with central banks,no interests will accrue to the money but with commercial banks,interests will accrue because they can lend and make profits,that is the professional way to go

    • sylvok

      remember he said by law. he is not the author of that law and that answers your question.

      • serubawon70

        Yes. …..by law to be kept in foreign currencies abroad….

    • gabin

      Stop displaying your ignorance of elementary economics, CBN manages our reserves. It has the power to deposits funds with any credible commercial bank any were in the world including Nigerian bank.

      • serubawon70

        Thank you Mr Know It All. So what happened to the funds deposited in the cedible commercial banks sir?

  • CharteredNGdreamer

    Soludo is classy.
    Very decent and informative response.
    I nominate him for the minister of finance job.
    He will do better than Kemi.

  • Mufu Ola

    I never believed Soludo will just dash banks 7$m & walk away. For what? I believe his explanation.

  • JasV

    Why would placement of deposit be a big deal that was announced at that time with fanfare? In any case whether loan or deposit or whatever, where is the money now with interest as and when due?

  • Tyo, Lagos

    Soludo’s position on this matter is very distracting.
    What people are waiting for him to prove is whether the deposits were paid back.
    What Oga Femi was alleging as I can understand, is that government still went ahead and bailed out these financial institutions after the melt down of 2008 despite that the government had earlier invested $7b in the system which nobody has proved liquidated before or after the meltdown.
    This is a simple allegation. Soludo is just twisting issues and appealing to sympathies of laymen.
    And who even says deposit is not loan? We know both are obligations to be paid back with interest at a specified period.