SUSPENSION OF SANUSI

Certainly the last has not been heard about the removal of Central Bank governor of Nigeria. The media both in Nigeria and abroad were full with stories about the suspension. On Thursday February 20, 2014, the federal government announced the suspension of the CBN governor, Sanusi Lamido Sanusi for many offences and key among them was financial recklessness. The announcement was done by Special Adviser to President Goodluck Jonathan, Dr. Reuben Abati. Dr Sarah Alade has been asked to act as the governor of the apex bank during the period of the suspension. The presidency has since forwarded the name of Godwin Amefiele who is the current MD of Zenith Bank to the Senate for confirmation. He is expected to take over from Sanusi Lamido when his tenure expires in June 3, 2014.

OPINION OF NSM

It is true that Sanusi has brought some radical changes to the banking secror since he came to office in 2009.The governor brought reforms to the banking sector which saved some banks that would have collapsed. However there are some who believed that the manner in which some of the reforms were carried out left much to be desired. There were banks that were given life lines to live while some had their licenses revoked while some were sold ridiculously to other banks. It is on record that federal government had lifeline investment in Keystone Bank (Bank PHB), Mainstreet Bank (Afribank ) and Enterprise Bank (Spring Bank). However, Intercontinental Bank with its massive size was taken over bank a smaller bank, Access Bank. It was a case of a goat swallowing up an elephant. There are many who saw the whole exercise as a witch-hunt especially of someone who wanted to get back at rival banks with the bank where he was coming from.

The CBN governor was always controversial. Nigerians woke up one day to discover that Sanusi has decided to print N5,000 notes. He was forced against this  action when the whole country rejected the idea. There was no analysis he did not do in the National assembly to convince the housie that the idea was right. He is a man that is always convinced by himself.

During the reign of emperor Sanusi, many of CBN’s policies are heard either when he was invited for an occasion or when he traveled abroad. He would make certain proclamations as if he was the government. The policy direction of the CBN is very powerful in directing the economy, but to carry on if the opinions of other do not count is unprofessional. He was a governor that believes in saying so many things even before he gave it a thought.

The CBN has the major role of monetary policy for economic stability, inflation and price stability which would be engendered by low interest rates. For the records, even though the banking sector benefited from policies of CBN under Sanusi, the economy did not. The true inflation position is about 10%, unemployment is 26% and more companies have closed down between 2009 and now. The cost of borrowing from banks is very high at over 22% and consequently finance is out of the reach of manufacturers.

The Alarmist or Activist?

Late last year, the governor accused the NNPC of not remitting a whooping sum of $48b to the Federation account. He made this allegation without checking his facts forgetting that it will be impossible for government to operate without this colossal  sum. In any case how much was Nigeria’s crude oil proceed that $48b will be unaccounted for? So after checking his facts and ‘reconciliation’ with Finance Ministry, he said only $12b was missing. In January 2014, the governor came back again and said that another $20b was not remitted by NNPC to the federation account. NNPC is Nigeria National Petroleum Corporation, a parastatal of government responsible for keeping accounts and monitoring of oil exploration in Nigeria. The governor and the Ministry of finance of which CBN is a part and Petroleum Ministry  are embroiled in accusations and counter accusations over the use of  $20b.NNPC has defended the use of $20b for its operation based on the Act that set it up. NSM thinks this is crude accounting and the Act need to be reviewed.

REACTIONS

The ousted governor has vowed to go to court to seek redress because the CBN Act has no provision for suspension but removal. The removal of the governor can be done by the president but it has to be supported by 2/3 of members of the Senate. Perhaps that was why the governor was carrying on as if the whole country depends on him. Do NSM support his suspension? No. However, is the governor a civil servant? Yes, so if a public officer commits a serious offense, how do you deal with the situation? The Financial Reporting Council of Nigeria indicted the governor while reviewing the Bank’s 2012 audited financial statements. There were queries and memos for serious breaches of accounting procedure and abuse of office on the part of the governor. When the matter got to the presidency through the Financial Reporting Council, the governor was queried and according to him, he responded. However did responses  solved the problems mentioned in the queries? The governor used his office to donate money to Boko Haram victims and his former school and that of his deputy and for countless projects without proper approval. In any case does autonomy empowers the governor to spend billions of Naira without appropriations? This is the same offence he accused NNPC of. Hear him, “they are accessing me of financial recklessness, how does donating money to universities constitute financial recklessness? How does donating money to secondary schools constitute financial recklessness?” I think the governor should be asked whether that is the core mandate of the CBN and whether the capital projects are with appropriations or budgeted and whether there is a limit to what the CBN can spend. It is during the reign of Emperor Sanusi that there are two set of money in CBN, money for Nigeria and money for CBN. In one breadth he had once said that the bulk of so called external reserve belongs to the CBN!

As expected APC have been busy condemning GEJ on all fronts. They are accusing the government of cover up on the missing $20b.They are saying the whistle blower was about to be shut up. They also accused GEJ of diversion from the missing money. We think that APC should tell Nigerians whether a whistle blower should be left the hook when another whistle blower is throwing open his shady deals. In any case we will not be surprised when they begin to go to Kano to invite Sanusi to their party. I think Lai Mohammed has not done much good as acting spokesperson for the party. The Lagos state government commented that the suspension will drive away foreign investors and send wrong signal. This is the same view of Speaker of House Representatives Hon. Aminu Tambuwal.We don’t know what investors they are referring to. Is it those that have been taking away billions of their investment since the beginning of this year due to Quantitative Easing tapering by US Federal Reserve? The All Share Index of Nigerian Stock Exchange has been moving southward since January and the exchange rate has been worse for the Naira due to capital withdrawal.

The house of Representatives was rowdy the day the suspension was announced. Many were saying that the suspension was illegal and unjust. Thy believed since his tenure was coming to an end in June, the president should have waited. They said the act is clear that the governor cannot be suspended. Funny. This is a very funny country. This is the same governor who accused the legislators of preposterous salary and countless allowances to the extent that a huge chunk of National budget is used annually to pay them. He came to house and told them that to their face. In fighting back, they proposed an amendment to the CBN Act so that CBN can lay their budget before National Assembly! They wanted to amend the Act because of insolence and whistle blowing posture of Sanusi but are crying fowl now over GEJ suspension of same man. Hypocrisy. Any way since they have not finished the amendment they can insert therein that once appointed, the CBN governor cannot be removed, suspended or cause to leave office in any form not even by national assembly.

CLOSING SHOTS

We are not in total agreement with the suspension of CBN governor, Mallam Sanusi Lamiso Sanusi but if the person that employs him feel he should be disciplined for certain reasons, so be it. We do not think the governor should leave his core mandate and begin to dabble into unnecessary controversies. If he wants to fight corruption in NNPC or government, he should resign first as CBN governor. The governor was given an option of terminal leave, when his own fraudulent activities were uncovered, he refused. He went to the press that no person can remove him before his tenure expires. The position of the presidency is the highest office of the land and must not be desecrated and disrespected. We do not admire GEJ sometimes because of some hasty and ill- advised decisions he takes. We believe the president should also give some deep thought to some issues before decisions are taken. The NNPC which has been enmeshed in massive corruption needs to be audited and investigated by crack team of auditors and forensic examiners. The national waste and corruption in the parastatal must stop. We need to re- appraise how funds are generated and methods of remitting money to the national treasury. The Ministry of finance and that of Petroleum disappointed Nigerians for having unreconciled differences in the accounts of Nigeria. This is high level inefficiency and fraud. The Kerosene subsidy must be removed now! The NNPC is using this as conduit and part of reasons for his roadside accounting.