The letter from the Central Bank Governor (CBN), Sanusi Lamido Sanusi alleging that $49.8 billion was not remitted by Nigerian National Petroleum Corporation (NNPC) to the Federation Account raised dust last week. President Goodluck Jonathan’s advice that Sanusi should resign for allegedly leaking the document to former President Olusegun Obasanjo, has met with varied reactions, with stakeholders calling for truce, reports COLLINS NWEZE.
Unprecedented. That was the simple interpretation a senior banker gave to President Goodluck Jonathan’s advice to the Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi to resign.
Jonathan had accused Sanusi of leaking a letter on the supposed non-remittance of $49.8 billion by the Nigerian National Petroleum Corporation (NNPC) to the Federation Account to former President Olusegun Obasanjo. This formed part of the kernel of a scathing letter Obasanjo wrote to Jonathan.
While denying the allegation, Sanusi was quoted to have rejected the President’s advice, arguing, quite rightly, that it would take the Senate’s two-thirds to sack him. Expectedly, the development has elicited varied reactions from across the divide.
Many who spoke on the issue have called for caution on the part of the President in the interest of the economy. They said it was left for Sanusi to either take the advice or leave it, adding that the President lacks the power to kick him out.
They referred to Section 11 Sub-section (2) (f) of the CBN Act of 2007, which stipulates that the CBN Governor cannot be removed by mere pronouncement of a president. The section gave the conditions under which the Governor can be removed, such as the Governor being convicted by a court; where he is declared bankrupt, or by the President after securing the backing of two-thirds majority of the Senate. “A person shall not remain a Governor, Deputy Governor or Director of the Bank if he 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 removed.”
Chukwuemeka Eze, Lead Counsel, Eze & Associates, said President Jonathan is aware that Sanusi cannot be removed by mere advice. “The President cannot remove him and he knows. That is why he advised him to resign, and mind you, resignation is a voluntary act. The Governor can take the advice or decline. If the Governor says he is not leaving, there is no law that can remove him. Legally speaking, Sanusi’s tenure is sealed till June 2.”
Eze said the best bet is to allow him serve out his tenure because the heat that will be generated by a continued debate on the matter would be more injurious to the economy than forcing him to go.
However, Eze said based on the sensitive nature of his position in the economy, Sanusi should have, firstly, written the NNPC to reconcile the figures. If the NNPC failed to give him the needed response, then, he could notify the President.
Ekene Odum, Senior Lecturer, Labour Law at the Lagos State University (LASU), said the CBN Governor was appointed by the President, and this takes effect after the Senate confirmation. “The President cannot just wake up and say Sanusi should go. The President can suspend him. He can be disciplined, but can’t be removed without the concur of the Senate,” he said.
He admitted that as the Chief Economist of the Federation, the leaked letter was a major embarrassment, adding that the Governor was too hasty to write the President. “Such writing has the capacity to cause confusion in both the local and international markets. Still, it would have made Sanusi a hero were the figures gotten totally right. But he made a statement only the brave could make,” he said.
He continued: “If it is confirmed that the President asked him to go, it will be an unfortunate scenario that could heat up the polity and economy. Remember that $49.8 billion is different from $10 billion. Still, $10 billion is a huge amount of money.”
He said despite the stalemate, the President should allow him to do his job and not push him out of office, having performed creditably at the CBN.
“It is human to err, but that should not take away his glory. Until he leaves, he still has the right to advise the President on economic matters, but whether such advice will be taken or not remains a different matter entirely. The President has technocrats that can advise him on economic matters, but to stampede or disgrace him out of office is not right,” he explained.
Odum insisted that it was only during the military era that a sitting CBN Governor could be forced out of office, adding that there has never been any such precedence in constitutional democracy. “During the military era, yes, he could be forced out. But in the era of constitutional democracy, it has never happened,” he said.
However, Dr. Austin Nweze, Senior Lecturer, Lagos Business School, said even though some people are lauding Sanusi for a job well done, he has caused a lot of problems for the economy, saying the President’s order that he quits is in order and should be respected.
He said Sanusi should have confirmed the right figures on NNPC remittances before writing the President, adding that such attribute is unbecoming of the Central Bank Governor, the fallout of which will be a minus for the economy. “It is definitely going to affect the economy negatively,” he said.
He said the Governor discouraged banks from taking business risks, which has affected the lenders’ drive for businesses. “He is long-overdue. The President should have sacked him three years ago. There is urgent need to rectify the damages he has done to the economy. If he leaves now, he will be the first CBN Governor to be sacked. What the President has told him is that he does not have confidence in him,” he said.
Bismarck Rewane, Managing Director, Financial Derivatives Company Limited, said the President may not have told Sanusi to resign. According to him, Sanusi’s position remains strategic to the economy and if the President wanted to advise him to resign, it won’t be on the pages of a newspaper. “I don’t think that the government can say so. Until I am convinced, I won’t comment on the matter. I doubt the authenticity of the letter. I need to observe before commenting,” he said.
Ademola Areago, a Constitutional lawyer based in Lagos, said if Sanusi must go, such act will lead to all kinds of signals. Firstly, such act will create feelings of political and economic instability in the country. “The CBN is banker to the Federal Government and the CBN Governor is also the Economic Adviser to the President. Now, if he bothers to give advice at all, what type will he be giving?,” he asked.
Sanusi has the key to the strong room and vault of the country and the way he leaves is important. “The whole world is watching because it has not happened in any country before. The way the information was handled was wrong. It raises the issue of confidence and investors both local and international are watching,” he said.
He argued that the fact that the President made his intention to remove him public is enough damage to the economy. That, he said, means that he is working against the President’s will.
“This type of situation is unprecedented. He is not asking him to go because of inefficiency. For now, Sanusi is hanging on to the law. It will not be easy at all because the statement will be sending all sorts of signals,” he said.
Chairman, Nigeria Bar Association (NBA), Ikeja Branch, Monday Ubani, said the face-off portends great danger for the economy.
He said Sanusi is in charge of the CBN’s vault and any altercation between him and the president is not healthy for the economy.
Ubani said there is a breakdown of communication between President Jonathan and Sanusi, an indication that the apex bank’s helmsman may be frustrated about certain economic issues. “Sanusi does not want to be held accountable when something sinister happens to the economy. But President Jonathan must handle it with superior wisdom,” he said.
The NBA boss agreed with Eze that Sanusi has the right not to resign because his position is tenured and must be allowed to run out. “Even if it is $1 billion that was found to be missing, there should be a ceasefire. President Jonathan should swallow his pride and allow the man to exhaust his tenure,” he said.
The genesis of the problem
The crisis started when Sanusi wrote the president alleging that $49.8 billion oil remittance that was supposed to have been paid by the Nigeria National Petroleum Corporation (NNPC) to the Federation Account was missing.
This letter, it was alleged, drew the ire of the President Jonathan who directed Sanusi to resign for allegedly leaking his letter on the “missing $49.8billion” to ex-President Olusegun Obasanjo based on which the former president wrote a damning letter to him.
The CBN governor allegedly denied any wrong doing, insisting that he would not be stampeded out of office. He insisted that it is only the Senate that could remove him and not a presidential fiat.
It is believed that a statement by the CBN spokesman that the governor had told the workers that he would no longer proceed on a pre-retirement leave is a direct confirmation of Sanusi’s preparedness to stand on the point he made when he allegedly spoke with the president on phone. Presidency officials could not be reached for comments at the time of going to press.
CBN reacts
CBN spokesman Mr. Ugo Okoroafor has confirmed that Sanusi said he would no longer proceed on terminal leave at a “family meeting” with the bank’s staff. He spoke to reporters in Abuja on Sanusi’s tenure after a news conference on the execution of the bank’s Payment System Vision 2020 (PSV 2020) strategy.
Implications for economy
The implication of Sanusi’s forced resignation, analysts say, would be quite negative. First, a lot of foreign management partners will lose confidence in the management of the economy while the independence of the institutions that are part of the Central Bank and participating in economic management will equally be negatively affected.
According to the Managing Director, SP&S Consulting, Debo Adebayo, reducing the power and independence of the CBN would send a signal of retrogression at a time others central banks are moving towards greater autonomy to enable them handle intricate financial crises.
He said a strong economy anywhere is tied to the effectiveness of the conduct of its monetary policy. “You see, the monetary policy is a serious business; it could be very, very terrible to have a country where the monetary policy direction is doubtful. When a government subjects the conduct of monetary policy to political influence, you are not going to have a strong economy,” he explained.
According to him, such development could hamper the effectiveness of monetary policy and the management of the macro-economic framework of the country. “The survival of the CBN is at the heart of the survival of the economy,”he warned.
Swimming in controversial waters
Appointed in the midst of 2009 debt crisis, Sanusi, 51, fired the chief executives of eight lenders within four months of taking office after an audit found evidence of mismanagement and reckless lending.
His push for stability in the currency has helped bring inflation down to below eight per cent.
But Sanusi’s actions have never strayed from controversy. He never stopped antagonising lawmakers by criticising their spending and courting controversy for his outspoken views, most recently on China’s role in Africa.
In December 2010, lawmakers demanded his apology for saying a quarter of the government’s spending on overheads went to parliament and that was damaging for the economy. He refused, saying his estimates were correct.
Again, two years ago, lawmakers attempted to whittle down the bank’s powers by proposing an amendment to CBN Act, hoping to strip him of his position as chairman of the bank’s board. They also pushed to include more external members on the board and have the National Assembly approve the bank’s budget.
More recently, he criticised China’s role in Africa, saying it contributed to the “deindustrialisation and underdevelopment” in the world’s poorest continent. Africa must shake off its “romantic view of China” and see it as a competitor that’s “capable of the same forms of exploitation as the west,” Sanusi warned.
CBN’s constitutional roles
The CBN is empowered to maintain price stability and ensure a non-inflationary growth. It also has the responsibility to ensure a sound and stable financial system in addition to other developmental functions. These mandates and functions are peculiar to central banks across the world and no other institution plays such roles.
These special responsibilities are enormous and have continued to pose increasing challenges to central banks largely because developments in the domestic and international economies create challenges in the financial systems and the art of central banking.
Globalisation exemplified by economic and monetary unions has equally increased the challenges to central banking.
Analysts insist that the effective discharge of these responsibilities requires that central banks be totally independent and shielded from political interferences.
Sanusi’s successor
According to Sanusi, whoever will be picked by President Jonathan to take over at the apex bank must be able to develop the market. “Central banking has changed. I think the market has developed. To be honest, if any Central Bank Governor misbehaves, the market punishes the economy immediately. So, the market is a major factor. Even as a governor, by the time your capital market crashes, and your currency goes down, you will know that it is either you restore stability, or you are out of the job. That’s important,” he said at a media conference held last month in Lagos.
Analysts have tipped some of the CBN deputy governors among Sanusi’s likely successor. Deputy Governor, Operations, Tunde Lemo; Deputy Governor, Economic Policy, Sarah Alade; and Deputy Governor, Financial System Stability, Kingsley Moghalu have been mentioned. Also linked with the job are: Managing Director, Asset Management Corporation of Nigeria (AMCON), Mustafa Chike-Obi; Managing Director, FirstBank of Nigeria, Bisi Onasanya and Managing Director, Access Bank, Aigboje Aig-Imoukuede and recently, Minister of Trade and Investment, Olusegun Aganga.
Analysts insist the next governor will probably have a different outlook or perspective, but one thing that is sure, remains that the fallout of the altercations between the President Jonathan and Sanusi may have just begun.
