Former President Olusegun Obasanjo has advocated appropriate fiscal and monetary policy synergy that would help achieve economic growth for the country.

The former President, who made the call at the unveiling of the book titled, “The Power of One Man: How the Soludo-Engineered Consolidation Transformed Nigerian Banks to Global Players,” held in Lagos on Saturday, said there is need for the fiscal authority to have a representative from the Central Bank of Nigeria (CBN) in their team of policy formulation.

The book, written by Ray Echebiri, captured happenings in the Nigerian economy, the events that led to 2004/2005 banking consolidations and lessons from the exercise.

Obasanjo, who was represented by the former Governor of Cross River state, Donald Duke, said although the apex bank is expected to be an independent entity, appropriate consultations are needed on the path of both authorities to ensure speedy economic growth and stability.

According to him: “The Central Bank is independent but independent doesn’t mean that it will not consult.”

He applauded the courage of the Governor of Anambra state, Professor Charles Soludo for initiating and implementing the 2004/2005 banking consolidation, when he was CBN Governor, which he said, strengthened the nation’s banking industry and enhanced banks’ ability to finance the private sector and long term projects in Nigeria.

Duke, however, faulted the CBN on the current high interest rate environment.

As he put it: “Personally, I can’t seem to understand how we are going to grow this economy on the current interest rate.

“They have tried to convince me but you can’t get loan on an interest rate of less than 30 per cent today. And for me, it is important we contain inflation but is it at the expense of growth or are we going to try and do both because there are many policies that can affect inflation. The issue of growth is very important in this environment.

“Another thing that gives me concern is the interest on treasury bills, which is at 20 per cent. If you have money today, it is better you buy T-bills because the risk of business in this environment is very high.

“So, we are leaving growth to embrace stabilisation. I think when you look at the rate of unemployment we have in this country, you cannot divorce growth completely from this.”

The former Governor of Cross River state also urged the CBN to review its policy with regard to the amount of shares that bank owners can hold.

He said: “I think it is frightening that an individual can own a bank. I don’t think an individual should own more than five per cent share of any bank because it is dangerous to allow bank owners to have more than five per cent shares.

“And most of the big banks in this country, one person has maybe more than 30 per cent of shares and that is very dangerous. We are not learning from history.

“I think that it is a policy the CBN has to look into because it is too dangerous. In fact one policy can wipe out the bank.”

Also speaking, Lagos state governor, Babajide Sanwo-olu lamented that the country is facing some of the challenges that led to the 2004 banking reform.

“He urged the CBN to do everything within its powers to ensure that there is stability in the economy, especially in the areas of interest rate and inflation management.

He pointed out that the private sector is currently going through tough times amid the myriads of challenges facing the nation’s economy.

“It is very tough for us in the private sector at this time; I do not know how we are going to survive. I know it is temporary but a whole lot of pressure is on all of us.

“You need to something painstaking and a review to see how they survived in the previous reform”, he said.

In his remarks, CBN Governor, Olayemi Cardoso, described Soludo’s banking reform as a bold step that revolutionalised the banking industry, from N2 billion capital base to N25 billion.

Cardoso, who was represented by the Deputy Governor, Financial Systems Stability, Phillip Ikeazor, said the apex bank is committed to ensuring stronger, healthier and resilient banks capable of withstanding economic shocks.

According to Cardoso, Nigerian banks’ contribution to GDP lags behind when compared to peers in other African countries.

He said the exercise will strengthen the banks and make them robust enough to cope with expected headwinds.

Prof Soludo, in his remarks, stated that the banking reform was successful due to the determination of the team to put aside self-interest and ethnic sentiments to make sacrifice for the country.

He urged the leadership of the CBN to be more resolute in their decision making to ensure the success of the forthcoming recapitalisation exercise.

“You must be resolute to pay the price, it is a dangerous gamble; it is a war. There will be work to be done for the CBN, we will keep reviewing and recapitalising because as the economy continues to enlarge, there will be a need for big banks that will champion big multinationals. We can achieve if it we dream it,” he said.