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Tag: Sanusi Lamido Sanusi

  • Sanusi’s ‘valedictory’ letter

    Sanusi’s ‘valedictory’ letter

    It seems unlikely that majority of number-numbed Nigerians cared a hoot about the weighty allegations contained in the September 25 letter to President Goodluck Jonathan by the Central Bank of Nigeria Governor, Sanusi Lamido Sanusi, let alone his embarrassing recant at the House of Representatives last week. If the letter was a bomb, the subsequent recant had all the elements of a shove-it-in-your-face Sanusi anti-climax!

    The sum total of the letter is an alleged under-remittance by the Nigerian National Petroleum Corporation, NNPC of a whopping $49.804 billion into the federation account. The allegation, has naturally, spawned strident denial by the corporation.

    If you live in a clime where multiples of billions of public funds routinely take a walk from the public vaults, ordinary citizen ought to be forgiven for seemingly passing off yet another invitation to the join in the elaborate farce of a mock trial and – as it always ends – the spectacle of the post mortem that yields nothing.

    Now, in just under two weeks, the wheel has turned full circle for the CBN governor. If the initial intention was to put NNPC in the dock, it is in fact Sanusi that is in the dock! From his self-assigned role of prosecutor-in-chief, Sanusi now has the burden that he actually knows his onions to discharge – aside the scare-mongering for which he is now infamous. Nigeria may have been described as a country of anything goes, even at that, the astounding revelation of the nation’s chief of treasury, banker to the federal government, member of the economic management team, and statutory adviser to the President being caught flat-footed on a matter as straight-forward as the accounting of the accruals into the federation account obviously takes our officials’ fangled dalliance with mediocrity to record low levels.

    You guessed right: the duel between the NNPC and the CBN is only another window into the chaos that our public finance has become. But then, it also reveals a disturbing character trait in our public officers: their inability to admit when they go wrong – not to talk of offering apologies to fellow citizens they misled! Sanusi of course would wear a placid face – like a piece of stone statue while the charade lasted; his nemeses in the finance, petroleum ministries and the NNPC would in equal measure be content to gloat after the technical knock-out – leaving the rest of us to wonder whether the entire proceeding wasn’t indeed a circus!

    Now, what do we know? Only a little more than we knew before. The riddle of course continues; the riddle of how the nation continues to pump more and more crude and sell at record high prices, and yet has far little to share in the piggy bank. By the way, there is a new phrase in the industry’s lexicon – ‘industrial scale’ used to describe the menace of oil theft. Meanwhile, the books of the NNPC remain inaccessible; just as the state governments as joint beneficiaries from the distributable pool continue to shout themselves hoarse over charges that the corporation remits only what it deems fit into the federation account. The NNPC meanwhile carries on, completely impervious to entreaties from any quarters save the presidency.

    That is where informed interjections by individuals like Sanusi ought to have made the difference. The kind of difference expected obviously goes beyond the wild and generalised claims about the shady activities going on. Which explains the pain when he blew the chance!

    Shouldn’t Sanusi, for instance, have known that only 24 percent of the revenue in question goes through the NNPC to the federation account?

    Was it deliberate – or is it simply a case of ignorance – that Sanusi did not bother to fit the payment by the NNPC into the remittance by other agencies in the oil sector to see how they fit into the matrix of the oil industry accounting before forming his conclusion about the scale of theft?

    And then to imagine in another breadth that the same Sanusi would actually seek – through the letter – to prod the President to act on recommendations whose premises are patently flawed?

    Clearly, the mere suggestion that the nation’s number one banker is ignorant of this elementary dictate of the oil sector accounting – something that goes to the heart of how the accruals are determined – must be considered as deeply troubling. Or is there something in the structure of the industry that prevents the government banker from knowing what is going on?

    Considering that he has barely six months left of his tenure, it may well be Sanusi’s valedictory letter. No doubt, the letter has done some good. For one, it should rest the controversies surrounding the $49 billion un-remitted funds. Moreover, if it is any consolation, the nation is at least spared the wild goose chase that leads to nowhere. At least, we now know that the custodial agencies responsible for remitting the balance into the federation account are the DPR and the FIRS. There should be ample time to chase the $10 or is it the $12 billion yet to be reconciled. One other good is that is to make the demand for a thorough overhaul of the corporation, urgent.

    On a final note, the twist in the NNPC under-remittance tale should cause a reflection on the Sanusi odyssey at the apex bank even as the debate on the character of his successor ramps up. While I do not belong to the lynch mob that would describe Sanusi’s tenure as a disaster, a lot can be said about his temperament, his judgment calls, not least his frequent outspokenness on just about anything that calls into question the wisdom of those who drafted him into the top job five years ago. While I may agree that a case can be made for activists like Sanusi in public service, it is hardly in the conservative chamber of the apex bank where a minor slip can sent the financial markets reeling. It shouldn’t be too early to wish Dan-Majen Kano luck in his next assignment. Considering his relatively young age, he would need it in the years ahead.

     

    Merry Christmas to my readers

    To those of you my readers who have kept faith with this page without fail in the past years, here is my simple prayer for you at Christmas: You will witness many more Christmas in good health and prosperity. The year 2014 and beyond will be better for you and all that is yours. Once again, Merry Christmas!

  • Cry my beloved country

    Cry my beloved country

    Events of the past couple of weeks in the polity tend to suggest that our dear country Nigeria is closer to the brink than initially thought.

    You all have read by now the infamous open letter of former president Olusegun Obasanjo to his god son and Nigeria’s incumbent president Goodluck Ebele Jonathan on his perception of the state of our nation.

    You must have read or heard also of a secret letter (leaked to the public) to the president by the Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi alleging that a whooping 49 billion USD or thereabout of earnings from oil, our major source of revenue, has not been properly accounted for by the Nigerian National Petroleum Corporation, NNPC. I don’t want to use the word missing to describe the state of the money as some were inclined to do. You know Sanusi has somehow recanted after a tug of war on figures so to speak with Finance Minister Okonjo-Iweala that the figure is somewhere closer to 10 billion USD.

    The two letters, both on the state of the nation have eventually drawn President Jonathan to his laptop to finally, or is it belatedly, pen a response and give us his own version of the state of our union. All the letters are in public domain, you are at liberty to chose which one to believe.

    In the midst of all these letter writings and dancing naked in the public by our leaders, I had cause to pass through one of our airports and while awaiting my flight to Lagos a certain Asian gentleman, I think he is Indian, was lamenting the state of affairs in this country, saying he has been here since 1983 and has never seen a country go down so quickly the way Nigeria is sliding currently. He wished we could as a nation and people do something urgently to arrest the situation.

    He was not even talking of the political situation (may be he was only being careful as a foreigner), he was worried about what he saw around him right there at the airport, the nonchalance of airline/airport workers to the plight of passengers that were left stranded for hours without explanation by the airlines; the deteriorating state of the airport, poor facilities even after billions of public funds have allegedly been spent to improve; the bare faced corruption going on there, and etc.

    The way he was saying all those things you’ll know he was saying them to effect, passing a message across, perhaps just using the airport situation as a metaphor for the larger problem out there.

    As he spoke my mind went to the Obasanjo letter especially what he said on the state of corruption in Nigeria, the alleged training of snippers by the administration to kill some one thousand or so Nigerians on the Federal Governent watch list, the vindictiveness of the Jonathan presidency against real or perceived enemies, the government’s romance with criminals and a whole lot of allegations contained therein.

    If a foreigner could talk like this, I guessed he must have seen something we as Nigerians are not seeing or chose to ignore.

    After several hours of delay the aircraft finally arrived and we headed back to Lagos safely. But that Indian never left my mind even when I wanted to push him away. And just as I was succeeding in doing this the president’s letter came; his response to Obasanjo. Personally I wasn’t impressed and no apology for that. His supporters can say whatever they want to. I’ll come back to that later.

    I am not a fan of Obasanjo because he is not better than Jonathan. But what I found surprising in his letter was that all those bad things we complained about under Obasanjo are still happening even with Jonathan. Have we not learnt anything? What kind of a nation is this?

    Obasanjo complained about corruption all around Jonathan and GEJ apologists say his mouth is smelling. Yes his mouth might be smelling, but then let’s cover our nose and listen with our ears. Is corruption not at it’s peak now? And what is Jonathan doing about it?

    In his laughable response he wanted Obasanjo to show him one example of corruption in high places and see what he would do about it. Do you need an Obasanjo to tell you that what is happening in the aviation sector, especially the role of the seemingly untouchable Minister of Aviation Stella Oduah in the BMW bullet-proof car scandal is enough evidence of corruption or attempt to defraud the state? Recall that the Honourable Speaker of the House of Representatives Aminu Tambuwal did say something similar about corruption incorporated in the Villa and the President’s seemingly supportive body language? All Jonathan could say is that he is fighting corruption, but we have not seen the evidence yet, let him start with Stella Oduah, then we’ll know he is in business.

    The damage the ruling Peoples Democratic Party, PDP is doing to the polity with its on going civil war is incalculable and Jonathan as party leader appears incapable of doing anything to stop it. All he could say was to blame Obasanjo and a few others for orchestrating it. Our democracy is in crisis because PDP is in disarray. If there is no crack in the wall of PDP how can an Obasanjo’s lizard enter it? When people say Jonathan is weak, he lacks initiative, this is one of the things that are talking about. How can you open your eyes and allow a behemoth that the PDP had become to collapse on your head, knowing the implication for the country, and all you could do is to blame another person for it? Us this how to be a leader?

    I don’t want to believe Obasanjo’s pepper soup theory of government training a squad of snippers to assassinate government’s opponent, but as a former President and Commander-in-Chief may be he knows what he was talking about. May be we better listen to him. And all Jonathan needs to do to prove Obasanjo wrong is to ensure that no assassination, whether political or otherwise took place under his watch, and if it did take place, the perpetrators are swiftly brought to book. Sadly Obasanjo couldn’t say this for his eight years presidency.

    But in an atmosphere of insecurity, anything could happen, thus Obasanjo’s alarm on the deteriorating security situation in the country, especially in the north east zone should not be brushed aside. Yes the Jonathan government is doing its best to contain if not destroy the Boko Haram insurgency, but the rate of setbacks in recent months suggests either a lowering of guards by the security agencies or an insurgency smarter and better organised than our military. This is not the time to pontificate or lay blame, we should all rally round Jonathan to bring down Boko Haram and restore peace to the north east. The government should also not arrogate to itself the power of knowing it all. If a former Commander-in -Chief is talking about security, please listen to him, even if his mouth is smelling.

    Jonathan talks about the improving state of the economy and the increase in Foreign Direct Investment (FDI) flow into the country in contrast to the dire picture painted in Obanjo’s letter. I don’t know what the president was talking about. Economic growth without jobs? The president and his coordinating Minister of the Economy Okonjo-Iweala can be deceiving themselves thinking that all is well; Nigerians are no fools!

    There are so many issues raised in Obasanjo’s letter and the President’s tame response that space will not allow a thorough analysis, but one issue stands out; the President’s personal integrity and credibility. Obasanjo alleged that Jonathan is not a man of his words; sadly, he is not the first person to so allege. Most people around the corridor of power in Abuja will tell you the same thing. You can’t go to the bank with Jonathan’s words. There is even this joke that there are five presidencies in Jonathan presidency and of the five his own is the weakest.

    This could be uncharitable if you ask me, but at the same time most unfortunate if it is true. This is the public perception and the President must do something about it. After all perception they say is close to reality. If Nigerians believe their president is weak and not a man of his words then he can do no good in their eyes no matter how hard he tried.

    People point at his wife as one centre of power; his Chief of Staff, Ministers of Petroleum and Aviation as the other presidencies, and the President has not called them to other even for one day in the face of public complaint against them.

    The President may not see it as so, but these people together with his rabid Minister of Education Nyesom Wike and some of his Ijaw kinsmen are the ones giving him a bad name among Nigerians not Obasanjo. He should leave the former President alone; tackle his message and not the man. After all Iyabo Obasanjo is enough to tackle her father. May God not give us a daughter like Iyabo. Did I hear you say and a father like Olusegun Obasanjo? Na you sabi. I don talk my own.

  • So long a letter

    So long a letter

    The Senegalese, Mariama Ba (1929-1981), wrote So Long A Letter, a semi-autobiographical novella, that chronicled the plight of the African woman, under the combined pressure of African and Islamic cultures.

    The male chauvinists that dominate both worlds would scoff at the late Madame Ba’s “ranting” against the marital status quo, so violently skewed against the woman in both cultures. But her 1980 classic has provided gender rights activists, determined to right these age-old wrongs, an evocative literary tool.

    On December 12, former President Olusegun Obasanjo made public his own long letter, not for any overriding public good, but a litany of woes against his estranged protégé, President Goodluck Jonathan. Obasanjo played his usual grandstand as some self-appointed overseer of Nigeria; and postured without end as the all-consuming patriot.

    Yet, it was nothing but another unabashed glorification of the Obasanjo self — that ever intrusive persona that, on the balance of fair evidence, can’t even pass the muster of the model citizen.

    Like most of Obasanjo’s hyper-reported public interventions, it was another grand show of a show-actor craving a stage and cheap applause — cynical applause at the expense of some political foe. The former military head of state (1976-1979), two-term elected president (1999-2007) and fundament of the Nigerian problem is crying wolf!

    Yes, there is indeed some “wolf”. But Obasanjo himself was its author and finisher: Goodluck Jonathan, after all, was Obasanjo’s political creation. But the creator would rather Jonathan was some tabula rasa — on which he could write and erase at will — which the protégé has resisted.

    Godson cannot, therefore, hear the godfather. Things have fallen apart, so mere anarchy, to paraphrase the Irish poet, William Butler Yeats, is loosed upon their once cosy world! But how is that a problem of Nigeria and Nigerians as Obasanjo now trumpets?

    Indeed, Yeats in his poem, “The Second Coming”, somewhat echoes the loud but empty Obasanjo interventions: “The best lack all convictions, while the worst are full of passionate intensity!”

    That brings the discourse to Obasanjo’s “permission” to share the Jonathan letter with the quad of Generals Theophilus Danjuma, Ibrahim Babangida, Abdulsalami Abubakar and 2nd Republic Vice President, Alex Ekwueme — to earn some high profile sympathy? Ah!

    But which of these, aside from Abubakar, has not tasted Obasanjo’s rather crude tongue, in his endless playing to the gallery?

    Is it Danjuma who, not long ago in a fit of media anger, dismissed Obasanjo as “Aremu of Ota”?

    Or Babangida, who earlier as self-proclaimed “military president”, endured the Jonathan treatment, the same grand hypocrisy the grim Sani Abacha could not stand and, before the infernal theatrics started, despatched the grand dramatist to gaol on phantom coup charges?

    Or is it Ekwueme that Obasanjo muscled into silence while, as president, he started destroying the Peoples Democratic Party (PDP), the logical conclusion of which he now, ironically, accuses and ridicules the luckless Jonathan, though his name be Goodluck?

    If Jonathan has his Bamanga Tukur, didn’t Obasanjo have his own Garrison Commander, Ahmadu Ali, both relentless presidential puppets that smashed the ruling party so a bully president could stand tall, like some Gulliver in Lilliput?

    Yet, no tears for President Jonathan. He plunged his knife into a dead hippo, fallen by the pool; and he richly deserves his running diarrhoea. There is always a stiff price for crass opportunism!

    Besides, despite being the first Nigerian president to bear the academic prefix of PhD, Jonathan’s actions have no rigour, no grace, no gravitas, just plain humdrum! Indeed, by his actions and inactions he has, perhaps more than any other, afflicted his presidency with a rare pull him down (PHD) complex.

    His is a grand study in wilful conspiracy against self; and the resultant harsh wages of promotion beyond competence. His presidency is therefore a grand let-down, right from the beginning — and there appears no redeeming factor.

    Indeed, as one contemplates the Jonathan Presidency, with its welter of terrible constitutional infractions and heinous allegations, and the man at the vortex of it all feigning none the wiser, the disturbing image of the Biblical wolf in sheep’s skin floods the mind.

    But even as the president sweats under the crushing weight of his elephantine troubles, his feet, in fatal distraction, appear still foraging for needless troubles with ants.

    The induced Rivers crisis is an abiding case in point, with the Police not even hiding their hideous partisanship; and rogue legislators, backed by rogue “federal might”, threatening to plunge that state into anarchy.

    Then there are opposition allegations of Jonathan turning the Ecological Fund into some crony gravy — allegedly rewarding friends, punishing foes.

    Of course, there is also the abiding allegation, supported by CBN Governor, Sanusi Lamido Sanusi, that the Nigerian National Petroleum Corporation (NNPC) is undercutting the country and the president doesn’t appear to have a clue about it all.

    That these allegations are made at all show the near-hopeless depth the Nigerian presidency has plumbed under Jonathan. That is unfortunate. But even more grievous is Obasanjo’s allegation that Jonathan is arming snipers to despatch political foes.

    Though the now crusading Obasanjo had more than a fair share of unresolved politically motivated killings during his presidency, this is one allegation Jonathan must deal with, if only to clear his presidency’s sagging reputation.

    But aside from this alleged killer squad, most of Obasanjo’s charges, in his long epistle of lamentation, were pure gas. There was nothing Obasanjo accused Jonathan of that he himself did not do during his best-forgotten presidency.

    NNPC is opaque. But how open was it during Obasanjo’s term, even when he was his own oil minister?

    On corruption — what has Obasanjo to teach, after his Obasanjo Presidential Library’s bared-faced extortion? If Jonathan responded with a contractor building his village a marvel of a church, it is evidence that Jonathan is master of his political father’s rotten tactics, corruption be damned!

    Jonathan wants to run for second term — and so what? Didn’t Obasanjo do two legal terms and was plotting an illegal third? Fortunately, Jonathan is doing more than enough to be guillotined at the polls. So, let the people decide his fate.

    Therefore, to now grandstand at some ogre, hinting at some non-democratic change, under some pseudo-messianic complex, is not only cheap but outright subversive. But it is another cynical drama, for Obasanjo knows that he too would vanish without trace, should Jonathan meet his electoral waterloo. So, would his and Jonathan’s credo of power without responsibility; and lollies without service.

    Obasanjo and Jonathan are an inglorious past and ignoble present that must be electorally swept away, from polluting the future. The Ebora Owu’s long letter of tumbling adjectives, and buzz words like honour and credibility that, from Obasanjo’s own conduct in office hardly meant anything, is his way of buying time and shopping for new puppets.

    He fails — except, of course, with the gullible and the excitable!

  • Sanusi’s planned exit raises concerns on inflation

    Sanusi’s planned exit raises concerns on inflation

    Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi is preparing to leave his post in June. There are fears in the industry that the gains of his success in curbing inflation and stabilising the currency may be reversed.

    Bloomberg reports that in his four years in office, Sanusi overhauled a banking industry that was near collapse, cut the inflation rate to the lowest level in more than five years and helped to keep the currency within a narrow range. Those achievements may be threatened as government spending is set to escalate before elections in 2015.

    A strategist at Standard Bank Group Limited, London, Samir Gadio said: “Sanusi has been ready to tighten monetary policy when needed. We are going into an election in less than 16 months, so what we expect is that for the next year, fiscal policy will be significantly expansionary, and if not checked by the central bank, it could result in increased pressure on the exchange rate.”

    The government of Africa’s biggest crude producer is already drawing down savings to meet its spending needs as oil production misses targets. While President Goodluck Jonathan has pledged to keep the budget deficit under control, Sanusi himself is wary, saying in an interview last month that the CBN is bracing up for fiscal “shocks.” Government expenditure climbed 17 percent before the 2011 presidential vote.

    The key concern among investors is exchange rate stability, including a possible devaluation. The CBN has supported the naira by selling foreign currency at twice-weekly auctions to keep the local unit within a range of three per cent around 155 per dollar.

    The naira has dropped 1.2 per cent against the dollar this year on the interbank market and was trading at 157.98 as on Friday. Yields on naira debt maturing in January 2022 have risen 73 basis points, or 0.73 percentage points, to 12.74 per cent.

    A research analyst at London-based Exotix Limited, Ronak Gadhia said: “In terms of international credibility, there’s not someone who is his equal who could take over.

    “It’s everything Sanusi has achieved. He helped sort out the banking crisis, and the currency is as stable as it’s ever been. It’s been really prudent economic management.”

    Appointed in 2009 during a debt crisis, Sanusi oversaw a N620 billion ($3.9 billion) bank bailout and fired the chief executives of eight of the country’s 24 banks after an audit found evidence of mismanagement and reckless lending.

    Inflation slowed to 7.8 per cent in October from 13.2 per cent in May 2009, the month before Sanusi took office.

    Investors are worried that Jonathan may appoint a governor who is less inclined to challenge overspending by lawmakers and kow-tow to pressure from the Finance Ministry to lower interest rates.

    Sanusi, who drew criticism from members of parliament opposed to his push for spending curbs on salaries, fought off plans by lawmakers last year to amend rules that would curtail the governor’s powers over the CBN.

  • $49.8b ‘missing’ oil money: Governors insist on probe

    $49.8b ‘missing’ oil money: Governors insist on probe

    Sambo postpones NEC meeting

    Vice-President Namadi Sambo shifted yesterday the National Economic Council (NEC) meeting fixed for tomorrow.

    But governors are planning a meeting of the Nigeria Governors Forum (NGF) for tomorrow to demand answers to the nine posers they have raised on the state of the economy.

    Consultations were on yesterday on the need for a emergency session of the NGF in Abuja.

    The governors are likely to hold a briefing in Abuja after the NGF session.

    They were determined to find out at the NEC session how about $49.8billion oil sales proceeds was not remitted to the Federation Account between January 2012 and July 2013. The governors may insist on a probe, it was learnt.

    Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi raised the alarm over the “missing” fund in a memo to President Goodluck Jonathan.

    The postponement of the meeting was contained in a notice titled “Cancellation of 9th (53rd) NEC meeting” from the secretariat in the Office of the Vice-President.

    It reads: “Please, I am directed by the Vice-President and Chairman of the Council to inform Your Excellency that the NEC meeting scheduled for Thursday, 12th December 2013 has been postponed due to unforeseen circumstances.

    “A new date will be communicated to you.”

    No reason was given for the postponement. A source said the shift followed security reports on the likelihood of the governors creating a scene on the nine posers they raised for the Presidency to address.

    A governor, who pleaded not to be named, said: “We have got a notice on the postponement of the NEC meeting due to unexplained unforeseen circumstances. We know that the shift was based on fears by the Presidency because certain matters on the state of the economy are now in the public domain.

    “The revelation on the alleged diversion of $49.8billion from the sale of oil has caused more tension among the governors. For the CBN Governor to have confirmed that only 24 per cent of the revenue from oil proceeds was remitted into the Federation Account is scandalous.

    “The issue at stake is beyond party leanings. We are all disturbed by this disclosure from the CBN Governor in a memo to the President.”

    Another governor said: “Sambo was being “tactical” in shifting the meeting because President Goodluck Jonathan is away in South Africa for Nelson Mandela’s burial and he will not want the NEC meeting to degenerate to an embarrassing level for the government in the absence of the President.

    “They are trying to device means of managing the situation in a manner that there would be a soft-landing bend for the Federal Government. We are however wiser than that,” he added.

    The governors plan to meet on these nine issues and come up with a position on the state of the economy.

    Another source said: “They can postpone NEC meeting; they cannot stop us from talking on how the economy is being run. Why will the Federal Government present 2014 Budget without consulting NEC? Why will NNPC not remit $49.8bilion oil proceeds and the government is keeping quiet?

    “In 1980, we were talking of missing N2billion but now it is $49.8billion that cannot be traced. Someone needs to talk to the governors if we are truly practising Federalism.”

    The posers raised are:

    •Was $50billion oil money not remitted to the Federation Account? Where is the money?

    •Is Nigeria broke or not;

    •Why was the NEC consulted before the 2014 budget was presented to the National Assembly;

    •How much has Nigeria earned from its oil sales in 2013 and what percentage of the budget is funded by these receipts?

    •Is it really true that $5b is missing from Excess Crude Account

    •How much oil does the country produce per day?

    •Clarification that the benchmark price for oil in the 2013 budget is $79?

    •Is it a fact that crude oil was sold at prices that hovered around $110 throughout the year?

  • Sanusi cautions banks on oil, gas financing

    Sanusi cautions banks on oil, gas financing

    Banks should consider the environmental impact of their financing and investments, especially when they concern the oil sector, the Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi, has said.

    Speaking at the Banking and Allied Matters conference for judges, he explained that global environmental impact of businesses which are largely financed by the industry suggests that the sector has not given adequate attention to environmental impact of their funding.

    The seminar, which has as theme, Sustainable banking practice in Nigeria: The journey so far and the way forward, was organised by the Chartered Institute of Bankers of Nigeria (CIBN) and the National Judicial Institute (NJI).

    Sanusi said the tendency to view banking as an environment-friendly business was common place, adding that on the surface, it seems not to be of harm to the environment and society.

    “However, the banking sector has been profiting from financing of environmentally unfriendly sectors. Financing of the energy sector, which is usually the villain on matters of environmental degradation across the world, is a trite example. This sector is perhaps the most capital intensive sector and depends on the financial system to mobilise funds for its highly capital intensive operations,” he said.

    Sanusi said statistics abound on how spillage has degraded environment and destroyed farmlands and aquatic life, thereby incapacitating the people economically and perpetuating poverty, adding that there have also been various reports of chemical emissions from our industries resulting in health complications within affected localities with its attendant societal/public cost.

    He said until recently, the country’s banking industry had not given much attention to sustainability beyond ticking off environmental impact assessment on checklist for credit risk assessment for evaluation of loan applications, other jurisdictions have for decades been engraving sustainability ethos in their financial system.

    He said since the 1980s, banks in the United States had been held directly answerable (under CERCLA-Comprehensive Environmental Response, Compensation and Liability Act) for the negative impact the businesses they financed had on the environment and some of them became bankrupt thereof.

    The Europeans followed suit in the mid-90s while the activities of multilateral development institutions, such as the World Bank, International Finance Corporation (IFC), European Bank for Reconstruction and Development, had influenced sustainability considerations in the financial sectors in Asia and South America.

     

     

    CIBN President, Segun Aina said the seminar had become a significant forum where respected jurists, legal luminaries and other key legal personalities interact with the chieftains of the banking industry.

     

     

    He said that it helps the stakeholders to discuss contemporary banking and legal issues aimed at improving the Nigerian banking environment and related judicial processes.

  • CBN urges Islamic financial institutions on innovative products

    CBN urges Islamic financial institutions on innovative products

    The Central Bank of Nigeria (CBN) has urged Islamic financial institutions in the country to advantage of the friendly regulatory environment in the country to develop competitive and innovative products within the context of Sharia.

    CBN Governor, Mallam Sanusi Lamido Sanusi gave the charge yesterday at the National Conference on Islamic Banking and Finance in Nigeria organised by Sheikh Nsir Kabara Research Centre in Abuja.

    The CBN he said believes that by developing competitive and innovative products Islamic financial institutions will make positive impact on the market through the creation of non-interest financial institutions and instruments.

    Sanusi then called on Islamic financial institutions to create more awareness about the Islamic financial products as an alternative finance option in order to help in the realisation of on-going Financial System Strategy Initiative of financial inclusion.

    He said Islamic financial institutions have demonstrated their potential to support financial inclusion in many countries by bringing large numbers of hitherto unbanked and underbanked populations especially Muslims into the organised financial sector.

    He said: “The efficacy of the Islamic finance in attracting liquidity to national economies especially through the Sukuk instruments structured for infrastructure development has also shown the contribution that Islamic finance can give to developing economies in building their much needed infrastructure.”

    According to him, as a result of this, the CBN in conjunction with other institutions have brought together a technical team to explore the prospects of alternative modes of finance and set out the procedures for using the modes in the development of infrastructure.

  • Sanusi seeks more govt role in infrastructure funding

    Sanusi seeks more govt role in infrastructure funding

    Infrastructure funding by the government is vital to Nigeria’s and other emerging market’s development, Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi has said.

    He spoke at the Second Biennial Regional Conference of the West African Institute for Financial and Economic Management, held in collaboration with the CBN in Lagos.

    He said though Public-Private Partnership (PPP) arrangement in funding infrastructure, especially power, is good, the government should ensure that it has an upper hand over private sector in roles where projects exceed that of the private sector.

    Private sector stake in PPPs, he said, should be between 20 and 25 per cent, adding that such contributions should also be in profitable areas such as large commercial airport construction, among others.

    “Infrastructure development world over, is primarily public sector-driven.

    “Africa’s infrastructure deficit is found in the power sector, whether measured in terms of generation capacity, electricity consumption or security of supply. Africa’s power infrastructure delivers only a fraction of the service found in other developing countries. The 48 countries of Sub-Saharan Africa with a combined population of 800 million generate roughly the same amount of power as Spain, with a population of 45 million,” he said.

    Quoting the World Bank report, Sanusi said the cost of redressing Africa’s infrastructure deficit is estimated at $38 billion per year in vestment, and $37 billion yearly in operations and maintenance.

    He further said this translated to about 12 per cent of Africa’s Gross Domestic Product (GDP), adding that there is a gap of $35 billion yearly.

    “In considering infrastructure financing options, a mix of sources and increasingly private and innovative ones will be needed to close the infrastructure gap. There is no “one size fits all” solution. The right mix will depend on factors such as financial development, indebtedness, business environment and preferences in each country,” he said.

    Among the innovative financing tools, he said the use of long term sovereign infrastructure bonds has been successful in raising capital for large scale infrastructure projects in Brazil and other emerging markets such as Chile and Malaysia.

    He said that Diaspora bonds are an alternative financing instrument under consideration adding that these are bonds issued by a government to nationals residing abroad to tap their savings for the purpose of infrastructure development in the home country.

  • No cut in interest rate soon, says Sanusi

    No cut in interest rate soon, says Sanusi

    THE Central Bank of Nigeria (CBN) yesterday foreclosed the possibility of reducing the prevailing 12 per cent interest rate.

    CBN Governor Sanusi Lamido Sanusi said in Paris, France, that the bank was more likely to tighten monetary policy than ease it in the months ahead.

    The Monetary Policy Rate (MPR) is the benchmark rate by which the CBN determines interest rate. The Cash Reserve Requirement (CRR) is a portion of banks’ deposit kept by banks with the CBN.

    “We’re likely to remain where we are but if we’re going to move at all, we’re more likely to tighten than to ease. I would advise against precipitate easing only to turn around after a few months and tighten,” Bloomberg quoted Sanusi as saying.

    At the September 24 Monetary Policy Committee (MPC), meeting the CBN left both its MPR and CRR for banks unchanged at 12 per cent. It also retained the CRR for public sector deposits at 50 per cent. Eleven of the 12 MPC members had voted for no change in the 12 per cent policy rate, while the dissenter, who voted for a 50 basis points reduction, argued that monetary policy should enhance growth and development.

    Sanusi said inflation was under control, adding that the naira has held up well relative to other emerging market currencies.

    Inflation eased to 8.2 per cent in August from 8.7 per cent in the previous month, staying within the CBN’s target of less than 10 per cent. The naira has weakened by 2.6 per cent against the dollar this year and may come under more pressure as President Goodluck Jonathan estimates a 12 per cent drop in oil and gas revenue next year.

    Last month, Sanusi said the CBN was committed to use its currency reserves to support the naira.

    However, the reserves have been in decline for some time and stand at $45.3 billion as at October 4. The CBN sells foreign currency at twice-weekly auctions to keep the naira within a range of three percentage points around 160 a dollar. “Inflation should be down to under eight per cent by December,” Sanusi said.

  • ‘How to improve power generation’

    Nigeria requires a multi-sectoral approach to electricity generation for growth, the General Manager, Sh’oreline Group, an energy service provider, Mr Gabriel Okoebor has said.

    Speaking with reporters on the need to improve electricity generation and distribution, using energy service providers, among others, Okoebor said the efforts of the 13 power generation and distribution firms can only be complemented when there is a multi-sectoral approach to power improvement in Nigeria.

    He said the suggestion by the Central Bank of Nigeria’s (CBN) Governor, Sanusi Lamido Sanusi, that banks located in a specific area should pull their resources together and use one power plant instead of big generators, is good, urging that other sectors should take a cue from act accordingly.

    He said the success of the power reforms would result in the upgrade of electricity generation and distribution to global standards. He said thousands of electricity megawatts are required to meet the growing need of the populace.

    He said thousands of megawatts of electricity are required in the country and that it could take eight years to get these, adding that focus should be placed on industries too.