NIGERIAï¿½S CENTRAL BANK GOVERNORï¿½S SUSPENSION: THE BOOMERANG EFFECT
In this piece I gaze at the suspension of Sanusi Lamido Sanusi, the passionate Governor of the Central Bank of Nigeria (CBN), on February 20, 2014, to unpack the political, psychological, and economic consequences of such occurrence in Nigeria, Africa's most populated oil economy. Commentaries and submissions by stakeholders on the implications of the suspension will be discoursed.
Central banks operate under stringent legislations because they are national financial administrators. As well, the governors of central banks are vital to national economies world over. Hence the banks and their governors are held in high regard and handled with caution. Central banks are at the heart of any economic development and political sustainability of a country. They also form the bridge for global integration, progress in international trade, and glocal industrial development.
Accordingly, CBN manages Nigeria's fiscal and monetary policies. The beauty of CBN is its legitimate autonomy that allows for its functional independence. The apex bank's basic tasks are to control the amount of liquid assets in circulation (monetary supervision), and supervise banking and credit institutions (prudential supervision) in the country. Additionally, CBN is one of government's main business and finance advisors. The apex bank is entitled by law to issue Naira notes, manage foreign exchange reserves, control government's debts, and acts as the government's treasurer by receiving and making payments from and to the public through the tax collector's accounts at the Central Bank, and monitors inflows and outflows in the federation account as stipulated by the CBN Act 2007.
Therefore, Mr Sanusi was within the limits of the CBN ACT 2007 when he alerted the government of irregularities in the Nigeria National Petroleum Commission's (NNPC) contributions to the federation account. The central bank governor purported that the national oil company has not been able to remit $20 billion dollars into the federation account. He was suspended for making this revelation, apparently. This suspension, three months before his tenure elapses, breaches Nigeria's 1999 constitution, the CBN Act 2007 and the Interpretation Act. All the legal documents did not make any provisions for suspension, thus making the government's decision as clearly unlawful as the moon in a dark night. In any case, to my greatest conviction, the president has breached the law of the land by suspending the CBN governor. CBN Act 2007 Section 11 (2) says,
ï¿½(2) The Governor, Deputy Governor or Director shall cease to hold office in the Bank if he
a) becomes of unsound mind or, owing to ill health, is incapable of carrying out his duties;
(b) is convicted of any criminal offence by a court of competent jurisdiction except for traffic offences or contempt proceedings arising in connection with the execution or intended execution of any power or duty
conferred under this Act or the Banks and Other Financial Institutions Act;
(c) is guilty of a serious misconduct in relation to his duties under this Act;
(d) is disqualified or suspended from practicing his profession in Nigeria by order of a competent authority made in respect of him personally;
(e) becomes bankrupt;
(f) is removed by the President:
Provided that the removal of the Governor shall be supported by two thirds majority of the Senate praying that he be so removedï¿½.
In other words, before the CBN governor is made to cease to act as governor, as in the case of Mr Sanusi, it must be supported by two-third majority of the senate. The president threw caution and law to the wind in short. Yusuf Abdusalami, a Nigerian lawyer describes it better,
ï¿½For the discerning, it can be observed that having failed to find an apt legal justification to back-up its action either from the 1999 constitution of Nigeria (as amended) or the Central Bank Act (2007), the presidency had to travel outside these principal (and the most relevant) statutes to embark on a voyage of discovery for legal authority to support its action. The presidency eventually found a 'legal basis' in the Interpretation Act to hinge its action on.
However, upon a cursory look at Section 1 of the Interpretation Act, the position of the Presidency appears to have been dislocated by the same section of the Act. For the avoidance of doubt, this section of the Interpretation Act provides thus: ï¿½This Act shall apply to the provisions of any enactment except in so far as the contrary intention appears in this Act or the enactment in questionï¿½. What can be critically deciphered from this provision is that recourse need not be made to the Interpretation Act when the CBN Act as laid down the procedure for appointment and removal (in whatever form) of the Governor of Central Bank of Nigeria. In other words, since the CBN Act as enshrined the modus-operandi as per the removal (in whatever form) of the governor of CBN, the provisions of the Interpretation Act is superfluous and, as such, not applicable as a legal basis for the presidency to fortify its positionï¿½.
This unusual action gives the country a grotesque political image in the international community. It shows Nigeria's government has no regards for the rule of lawï¿½the law that simply says to remove the CBN governor the executive must have a 2/3 majority in the House of Senateï¿½ and no one ever understood why the government acted in this senseless manner without envisaging the uproar the action supervened.
Now, as Nigeria's fiscal and monetary forecasts teeter on the brink of chaos following the banishment of Mr Sanusi Lamido Sanusi from CBN, Mr. Goodluck Ebele Jonathan, the President of the country, has not looked so feebler. That, to my greatest conviction, is another paramount political consequence of the suspension. The media, local and global, as to what went wrong with the president and his democratic mandate, is divided, but astonished. The geopolitical zones are staggering in consternation. The politicians are struck with a tall yearning for seditionï¿½the senate and the nation's state governor's forum (NGF) are unbridled as they meet over the suspensionï¿½which is a political response so unambiguously pseudo-revolutionist. The opposition is empowered farther and are vocal about their exasperation against PDP-led government for their removal of Mr Sanusi. The youths are offered no other option than to use the social-media to oppose the politics that brought them into this hokum, which has denied them water, food, job, education, good health, peace, security and welfare in the midst of oil prosperity. To the international community and investors, Nigeria is uncertain from every way you look at it, in all her systemic provenances. Naira has botched and dwindling further. Hope is lost in the ruling party, PDP, such that the masses pray for exigent political shift. The government is clearly enfeebled at this point for failing to see that such a suspension is a sign of cluelessness on the political implication of having a CBN in hysteria.
President Jonathan's refusal to suspend anybody in NNPC which was alleged to have enmeshed its ass in a N2 trillion Kerosene subsidy fraud and for not remitting $20 billion dollars to the federation account, whilst unlawfully suspending Mr Sanusi, sends global signal that he cannot allow any opposition within his democratic government, particularly against NNPC.Indeed, the government regards NNPC more than the CBN. This outright mis-prioritisation evoked stakeholder-aggravation against the government. It has turned a good number of the masses against Mr Jonathan. The southern and northern part of the country are seriously against the government's position. The north has shown more aggression to the suspension,nevertheless. This will surely increase the president's pressure from the north of the country in the coming days. The government's political support from the north is seriously waning. The northern youths are clearly on the side of Mr. Sanusi as it stands now. This attendant support for Mr Sanusi, a northerner, is a dangerous blow on Mr Jonathan who intends to be elected for a second term in 2015. Now that the north and south see Mr Sanusi as a hero for boldly confronting the government that has been globally tagged corrupt, Mr Jonathan in his hubristic blindness has dug a political pit in his administration already spattered with insecurity and financial mismanagement. Mr Jonathan's re-lection may be a miracle.
Is NNPC the epicentre of the so-called vested interest Mr Sanusi projected in his TedExEuston talk in 2013? The oust of Sanusi Lamido Sanusi (SLS) from Nigeria's apex bank in the bid to ridicule him and perchance get a pound of flesh for his array of canonical whistle blowing against corruption by the government, NNPC, and the so called vested interest, is an attempt to offer Nigeria a new leader in a fresh edge of violence in its budding democracy. Mr. Sanusi was ousted not because of the allegations against him but because he is viewed as a leader that is likely to replace Mr Jonathan's feeble and corrupt leadership with the so called vested interest. Although, one can postulate that the immediate cause of his suspension was that he whistled like Edward Snowden against the government he was working for. This means that in the future public officials will find it hard to say anything against NNPC or the government. There is fire on Nigeria's democratic mountain. Mr Jonathan has become a kind of leader that if accused of being a larva at despotism, he extends his wings and tells you he is indeed a despotic butterfly. Why pardon an ex-governor who was proven to be financially reckless and a criminal, but scandalously suspend a sitting CBN governor without going to court to prove him guilty of any accusations of financial recklessness? Why refuse to probe a mere national oil company that has been accused repeatedly by local and international bodies of huge corruptionï¿½ NEITI, an international agency, accused NNPC of misappropriating $22 billion with its Swiss counterparts. The halt of freedom of speech in Nigeria's democracy is a huge infringement, and a jumbo political consequence of the said suspension.
It was the Snowdenian school of thought that assembled its generic strategies in 2013 to elevate whistleblowing as a form of freedom of speech and thus a dangerously acceptable mode of punishing bad democracy. It was the Snowden Files that exposed to the world how several democratic governments censure their people's confidentialities for no good reason, for unwarranted capitalist justifications. Indeed, some of the leaked files exposed the links between Nigeria and the United States. The files convey despicable girdles of devastating data that prove that Nigeria's economy is held-up by vested interests groups, who run the nation like mafia bosses. Edward Snowden is no doubt a pitiless fugitive, but also a talented intelligence professional who had worked for the Central Intelligence Agency and the NSA in America. The consequence of the computer specialist Edward Snowden's theft of 1.7 million top-secret documents from America's National Security Agency (NSA) and its British counterpart GCHQ is clearly therapeutic. Not just for Russia who granted him Asylum, but the leakage of the stolen files offers to the world a new dimension of reality, one that specifically shows that so called democratic forces that demand freedom and transparency from the masses actually dwell in quaternity of espionage, war, fraud, and deception, to a rank of global wreckage. That same reality is what Mr. Sanusi Lamido Sanusi's daring statement against NNPC offers us. It in fact offers the masses an opportunity to know the major source of insufficiency and squalor all over Nigeria. A political truth is herein exposed. What Edward Snowden is to the United States, is what the prince from Kano, Sanusi Lamido Sanusi, is to Nigerians and the international audience today. As Snowden was made a provost in a University in Edinburgh for his bravery, Sanusi has been made a media hero in Nigeria for his boldness in confronting the dishonest government. His suspension proves the government has a skeleton in the cupboard.
Psychologically, people are hostile to the government more and more. There has been demonstrations of Occupy Nigeria following the killing of school pupils in the North of Nigeria. The masses are upset at the killing of over 40 pupils in a school in the northern part of Nigeria following Mr Sanusi's ouster. A government official Reno Omokri has been accused and slandered for leaking a letter which linked the terror attacks to Mr Sanusi's suspension. But Mr Sanusi was welcomed by traditional rulers, residents and a large crowd of over 10,000 young Nigerians with banners reading 'We are with you' 'You stand by the truth' 'You are our Hero', as he returned to Kano State his hometown, 6 days after his suspension. The boomerang of this witch-hunt should have been predictable. Currently, Mr Sanusi is compared to the President in terms of leadership spirit, charisma and global tolerability. That comparison is huge disadvantage to the PDP-led government. Mr Sanusi, the bow tie governor, has been made more famous than expected.
Sanusi has received awards for excellence (2013 Central Bank Governor Award for Sub-Saharan Africa, an award in recognition of Sanusi's efforts to reduce inflation to a single digit); has been known to combat corruption in the country's banking system; known for eloquence and transformational leadership hutzpah; has pioneered support for education in the country ( through CBN's philanthropy); reduced inflation from 15.6 percent in 2009 to 7 percent since January 2013; increased the CBN revenue since his tenor; and has out-performed previous CBN governors in the area of agricultural financing, and intervention funding. Mr Sanusi, in defence of the accusation of financial recklessness said
ï¿½Under the Fiscal Responsibility Act of the CBN, we contribute 80percent into the Federation Account. In 2008 before I became Governor, CBN contributed N8billion into the Federation Account. In my last year, we gave N159billion. In 2012, we gave N80billion, in 2011, we gave N60billion. In the first four years of my term as CBN Governor, we gave government about N279billion. The National Assembly called to commend me. We have been able to give N600billion from surplus alone and the money is made from prudent finance, cutting down currency expenses, every over headline has gone down. So I can say, with all sense of humility, that the last thing anybody can accuse me of is financial recklessnessï¿½.
His contributions was the highest since the beginning of the bank. These achievements make him a leader who can readily dwarf Mr Jonathan's lack of charisma, lack of integrity, courage, and will to eradicate corruption in Nigeria.
Sanusi has eyes for improvements and reform, and he is valiant at that. Regrettably, his suspension is causing set backs on the reforms he has carried out in the banking system already. SLS as he is christened by friends and foes has emerged as the bravest and newest benefactor of the current administration's reign of slow-motion violence and dull-faced totalitarianism against those who have interest in reform. Before now, related cases such as the removal of Gen. Owoye Azazi (rtd), the head of Nigeria's National Security Agency (NSA), for revealing that the sponsors of Boko haram are amongst the northern oligarchy; the removal of National Population Commission's (NPC) chairman, Festus Odimegwu, for faulting the North's population census figures, clearly depict the government as unready to tackle diverse problems the country is facing. Now, Mr Sanusi's suspension, for mainly unravelling the NNPC's roguish accounts, an exposition which is reassuring for Nigeria's budding democracy, compresses the trust the populace has for the president. There is doubt as to the sustainability of Mr Sanusi's reforms as it stands now. Consequently, this is a huge economic knockback.
What the media could not investigate and publish, what other government employees could not tell the world, what past leaders could not say to Nigerians, SLS said just one piece of it - that NNPC is the major tunnel through which Nigeria's collective oil prosperity is syphoned and squandered. The anti-NNPC criticisms that moved from their failure to account for $49.8bilion or $10.9billion, and later $20billion, into the federation account, and to the latest testimonial that NNPC has not been audited thoroughly since 2005, point to the fact that NNPC, SLS and other stakeholders are pinched in a clash about such a national economic matter, and no doubt it was the government that forged that horrific circumstance. In other words, it is going to be difficult for government employees to be objective, or to express opposing views about accounts and relevant issues in the government. This suspension reduces the country's democratic achievements to rubbles.
Is Nigeria's President the director of NNPC? Why should he ever allow Mr Sanusi's report about NNPC push him to become a transvestite? I cannot describe it. He claims that the shareholders of the commercial banks that Mr Sanusi reformed have written weighty petitions to IMF and World Bank imploring them to prevail on the Nigerian government to review the banking reforms carried out by Sanusi because the so called reforms were based on injustice, fraud and falsehood. Mr Jonathan submitted that the shareholders believe that ï¿½The fraud in the entire process of so called banking sector reform by Mr Sanusi is also glaring in the case of Oceanic Bank Plc. which the CBN governor forced into acquisition by Ecobank Plc., an advertently much smaller bank in Nigeria as far as the eye could seeï¿½. These allegations against Mr Sanusi are essentially disturbing, but his suspension was a wrong judgement given the political, psychological and economic consequences. Pachydermatous anachronism as Kipling calls it is the description jazziest for what President Goodluck Jonathan of Nigeria has done to the mind of the masses by taking the discourteous path of banishing the country's CBN governor from his office. From the endorsement of Anti-gay bill in December 2013, to the dismissal of Nigeria's best Aviation Minister, Stella Oduah, in January 2014, to the suspension of Sanusi Lamido Sanusi, CBN governor, within two months, the PDP-led government is obviously drunk with the politics of incongruity. This breaks the heart and mind of the masses.
The suspended CBN governor, in 2012, was amongst the top government officials that canvassed for the removal of the nation's fuel subsidy. An incongruous decision that led to civil uprising in Nigeria. It was an NNPC-CBN-PDP vision that has kept the price of both petroleum and consumer products costly. There is a proven connexion between the price of oil products and other products globally. It has become clear that the subsidy, government fuel subsidy, was put in place not just to keep the price of petroleum products low for the masses, but to keep the price of other products such as garri, rice, beans, and yam low as well. The removal of oil subsidy on the 1st of January 2012 attracted an uproar. The masses were moved for once in a long, long time. Occupy Nigeria began henceforth. The struggle claimed lives but the government and NNPC still refused to change their course as CBN changed its views later on the issue. The current suspension is obviously partly due to the same company, NNPC, which is bigger than life. How can a government company be above the law?
It is the major company managing and trading oil for Nigeria. New York Times perceives NNPC as a company very treacherous for Sanusi to have wrestled against: ï¿½But he may have taken on too big an opponent in the national oil company. The sprawling company acts as the country's oil buyer, seller, explorer, producer, processor and regulator, and is ï¿½at the nexus between the many interests in Nigeria that seek a stake in the country's oil riches,ï¿½ according to a 2010 Stanford University studyï¿½. Citing the study further, New York Times 2014 reported that ï¿½The study said that while the company ï¿½functions well as an instrument of patronage,ï¿½ it is neither competent nor efficient in its many operations. Mr. Sanusi went further, accusing it this month of ï¿½illegal and unconstitutional acts,ï¿½ including transferring income from government-owned oil properties to ï¿½private hands.ï¿½
Perhaps this New York Times report, with its global weight, offers a new clarification to an exhausted clichï¿½. The masses and the Nigerians in diaspora have always accused NNPC of financial crime against the federation. An indictment that has by this time risen to a clichï¿½. This global impression or demonstration further puts the country in a hoax strain capable of scaring investors, and conglomerates wishing to expand into the country, thus economic growth and development are expected to be delayed. The financial strength of the country is tainted at this point. The study sees NNPC as not competent and efficient. Sanusi's letter to the president regarding NNPC's lack of competence and accountability actually matters when associated to the study cited above. Should this issue not have prompted the government to empanel some competent Senators to probe NNPC first? Should this not have mattered to SLS, the CBN governor?
It sure should matter to Mr Sanusi because it's part of his mandate to maintain accountability and stability of inflows and outflows from the federation account. He ought to have been impugned if he was silent on an issue as this capable of destroying the strength of our currency, fiscal stability, GDP growth, reserve growth, standard of living and transactional transparency. New York Times goes on to add that: ï¿½Mr. Sanusi's removal was greeted with dismay in financial markets. The country's stock market fell sharply, bond trading was halted and the value of the Nigerian currency, the naira, plunged to a record low against the dollar before the bank intervened to prop it up. Outside investors had generally seen Mr. Sanusi as an effective regulator of the country's troubled banking sector; his tenure was scheduled to last until Juneï¿½. Additionally, the exchange rate of Naira today is between N165 naira to N172 naira to the dollar. The worst the Naira has ever fallen from the N140 per dollar it was when Sanusi was made the CBN governor in June 2009. Indeed, the governor has not been able to effectively manage the currency during his tenure as to raising its value against dollar. However, the suspension of Mr Sanusi which affected our stock market, bond, and currency much further, certainly is a collateral deterioration which will continue to affect other facets of the nation's economy for some time if not well managed.
The Bank of England and the American Federal Reserve Bank are apex banks that serve as banker's banks, managers of price stability, controllers of interest rates, moderators of liquidity and solvency, ombudsman to commercial banks and financial institutions, initiators of monetary and fiscal policies, conductors of research to advance economic viability of the country's businesses- large, small and medium scale enterprises, maximizers of profit, pioneers of corporate social responsibility in forms of accountability, transparency and sustainability in the financial deals of and within the country. These functions are part of Mr Sanusi's job. However, the hot-blooded Sanusi added a tone of bully to his job. Four months to his ascendency to the office, he sacked 9 bank chiefs for bad loans and fraud, accusing them of lacking accountability and transparency, arresting and handing over his former colleagues to court, the cases are still heard in Nigeria courts. This incurred him several enemies from the ruling party, PDP. One of his greatest criticisers, Mr Mike Ozekhome (SAN), even pondered that ï¿½Lamido did a great job in sanitizing and deodorizing the banking system, leading to the emergence of stronger commercial banksï¿½.
Numerous commentaries abound against the action of the president in the illegal suspension of the CBN governor in a democracy. Prominent was the lurid submission of the publisher of Ovation, Dele Momodou:
ï¿½I'm certainly saddened by Sanusi's sack. I'm vehemently opposed to all forms of gangsterism in a democracy. The terrible habit of disgracing everyone we disagree with should be discouraged. Why wait till Sanusi left for Niamey before sending him a letter of suspension? Is it not a further waste of our already scarce resources? Why humiliate him at a time he and colleagues were to meet at a high-level discussion with a few African Presidents? What the government has done again in its desperation to punish its recalcitrant agent is to inadvertently turn Sanusi into a superstar martyr. The lesson of life is for a statesman to act statesmanlike in every situationï¿½.
Indeed, Sanusi is now more famous than ever, clear and simple. Note, the CBN governor left the country on a chartered jet. He was suspended while on a meeting abroad. He was not just suspended, he was arrested at the airport. His travel documents were snatched. He was detained for some time. Who treats a CBN governor of a country like this without thinking of the economy? The government does not care. Does it?
Another insightful submission was from the retired President of the Court of Appeal, and the pioneer chairman of the Independent Corrupt Practices and other Related Offences Commission (ICPC) in Nigeria, Justice Mustapha Akanbi, who asserted that President Goodluck Jonathan's action was pre-emptive and ill-advised:
ï¿½All I know is that the point has been made that CBN's governor cannot be removed from office without taking the matter to the Senate for two- third of the Senators' vote. And there is no provision in the Constitution which I know of that allows the president to suspend him. If the president wants him out of office he should follow due process and we cannot resist the temptation that apparently because Sanusi was complaining about what has happened at the Nigerian National Petroleum Corporation (NNPC), he is now made to face this situationï¿½.
Akanbi's voice was heavy, and he even requested for the reversal of the suspension. On the legality of the suspension, there is a split in the comment of thinkers and commentators, a split pointing out that to some the suspension was lawful, and to others it was unlawful. While Akanbi states that the suspension was unlawful, some like Mr. Mike Ozekhome (SAN), said President Jonathan's suspension of Sanusi was legally accurate. In his interview with the News Agency of Nigeria (NAN) Ozekhome said ï¿½Constitutionally and legally, what President Jonathan did was correct. He does not require the consent of the National Assembly to do so. Anyone who is an employee has to know that he is answerable to his employer. You cannot bite the finger that feeds you. The Nigerian Constitution and the CBN Act give the President the authority to suspend or remove the Governor of the CBN.'' He did not cite any constitutional act to this effect. Akanbi did not cite any act as well.
Ozekhome's argument is premised on the accusations levelled against Mr Sanusi by FRC. FRC is the agency the government instituted to audit CBN's account in 2013. The Financial Council audit report of CBN that questioned Mr Sanusi's conduct was submitted in June 2013, why, then, is the president suspending him in February 2014 in the middle of a financial impropriety case against NNPC? Against that backdrop, Vanguard February 24, 2014 asks the following questions:
"Why did the Presidency take this long to fire Sanusi?
Did CBN pay Nigerian Security Printing and Minting, NSPM, Plc N38.233 billion in 2011 for ï¿½printing of banknotesï¿½ ï¿½ N8.836 billion more than NSPM's 2011 turnover of N29.370 billion? Who approved N3.855 billion staff loan write off in 2012?"
It is obvious he was fired for a reason other than allegations of financial recklessness levelled against him since June last year.
Recently, in Lagos, Apex Yoruba socio political organisation, Afenifere, contended that Mr. Sanusi must be allowed to prove his innocence, ï¿½we are of the view that Sanusi should be made to answer the allegations raised by the president. Before now we thought, he was a whistle blower, but recent development is suggesting another thing, so he should face the music. Enough of all these propagandas, he has no right to deep his hands into the nation's treasury without due process. We don't agree with that if that is true.ï¿½ Yinka Odumakin who made this statement did not even consider the other side of the view, should NNPC not be made to answer the allegations raised by Mr. Sanusi as well?
Dr Ngozi Okonjo-Iweala who doubles as Nigeria's Coordinating Minister for the Economy, and also competed with Jim Yong Kim for the position of World Bank President, has threatened to resign if the government refused to get an independent auditor to probe NNPC.
Now, in the heat of the matter, President Jonathan has been noted to say that Sanusi could come back ï¿½today or tomorrowï¿½ if he was cleared at the end of the investigations. The fact is there is neither legal nor ethical foundations for the president's statement given that he has nominated a replacement for Mr Sanusi, which is not out of place, but actually seem he sought to rubbish the economyï¿½ Nigeria's foreign exchange, bond and money markets have stopped trading because of uncertainty caused by the suspension , according to Reuters News Agency reportsï¿½, rubbish the CBN governor, and rubbish the essence of the constitution of the federal republic of Nigeria, and thus making his re-election a partial unfeasibility.
About the Author
Stanley Ndukwe is a research fellow at the London School of Commerce. He is a publisher and the President of Mercy Culture London. He is a poet, and the author of The Merciful Mind.