Hiding behind his finger, President Goodluck Jonathan recently suspended Lamido Sanusi, Governor of the Central Bank of Nigeria, from office over alleged financial recklessness. The President’s action is ill-advised and is rightly seen by many as a well choreographed vendetta against a man, who, a few days earlier, had exposed how the Nigerian National Petroleum Corporation brazenly looted oil revenues.
The immediate consequences of his suspension bode ill for the economy: aggregate market value of equities quoted on the Nigerian Stock Exchange fell on the first day by N187 billion, just as the naira crashed from N162.9 to N170 to the dollar in the interbank market. This was the larger and delicate picture the President and his economic management team ignored or could not see; thus exposing the economy to grave risk.
Section 11 (2) (f) of the CBN Act that deals with the removal of the governor clearly states that it shall only be done when backed by two-thirds majority support of the Senate. But, instead of Jonathan sending details of Sanusi’s alleged wrongdoings to the parliament as demanded by law, he sent the nomination of his proposed successor, Godwin Emefiele. Garrison theatrics are not alien to his Presidency. He had in 2011 failed to recall the suspended President of the Court of Appeal, Ayo Salami, when the National Judicial Institute, vested with the powers to sanction him, advised that he be reinstated.
The signal from Jonathan is ominous: a weak CBN is out of tune with current global trends. The United Kingdom, the United States, Spain and Greece, have all responded to the challenges of the times by strengthening their central banks, with some countries going beyond their shores to hire experts. Mark Carney, appointed Governor of the Bank of England in 2013, was head-hunted from Canada.
It was not for nothing that the CBN Act 2007 granted the bank autonomy. It ensured its insulation from the impulses of political authority. This has paid off with the cocktail of banking reforms in the last 10 years. Banks consolidation, mergers, sacking of errant bank chief executives and keeping macroeconomic indices under control have brought some stability to the system. Eroding these gains now because of injudicious use of power could be disastrous.
Appearing on February 4 before the Senate Committee on Finance, probing the kerosene subsidy fraud, Sanusi said, “It is established that of the $67 billion crude shipped by the NNPC between January 2012 and July 2013, $47 billion was remitted to the Federation Account. It is now up to the NNPC, given all the issues raised, to produce the proof that $20 billion unremitted either did not belong to the Federation or was legally and constitutionally spent.”
The $20 billion was an update on the $12 billion figure he had held on to, after a harmonisation with the Finance Minister, Ngozi Okonjo-Iweala, and Minister of Petroleum Resources, Diezani Alison-Madueke, who pegged their own figure at $10.8 billion. Earlier, a befuddled NNPC had claimed that it spent $8.6 billion out of the $10.8 billion on kerosene and petrol subsidy; used the balance to repair vandalised pipelines and defrayed the cost of stolen crude.
Sanusi’s suspension 16 days after he let the cat out of the bag reveals a President shooting from the hip. What does the country make out of last Tuesday’s rebuttal of the media-recorded confession of the Managing Director, Nigeria Petroleum Development Company, Victor Briggs, to the Senate panel that the $6 billion the NNPC claimed was paid into its account, was actually not paid?
Government’s purported fidelity to due process based on the so-called findings of the Financial Reporting Council of Nigeria on the books of CBN falls flat in the face of NNPC’s gross abuse of global best practices in accounting for oil revenue receipts. It had earlier circulated documents to the Federation Accounts Allocation Committee indicating non-deduction of subsidy, according to Sanusi, only to claim now that the missing funds were spent on subsidy.
For the records, FAAC is chaired by the Minister of State for Finance – Okonjo-Iweala’s deputy. Other members of the body include the Accountant-General of the Federation, representatives of the CBN, NNPC, Revenue Mobilisation Allocation and Fiscal Commission, Federal Inland Revenue Service, Nigeria Customs Service and finance commissioners of the 36 states. None of them has faulted Sanusi’s claim. That NNPC’s account has not been audited since 2005 is not an advertisement for due process or accountability for Jonathan. Moral authority is always earned. For his administration to be taken seriously on the CBN saga, it should first observe the Holy Writ’s injunction – “Physician, heal thyself.” Hypocrisy should have some limits in the conduct of public affairs.
A recent House of Representatives investigation revealed how successive governments between 2004 and 2012, which included Jonathan’s, spent N4.7 trillion, instead of N2.1 trillion, as Service Wide Vote approved by the parliament. This means that N2.6 trillion was spent unbudgeted. If this is not financial recklessness, we wonder what else is.
In his Presidential Media chat last Monday, Jonathan, against evidence to the contrary, denied the removal of kerosene subsidy in 2009. But a memo dated June 17, 2009, signed by David Edevbie, Principal Secretary to the late President Umaru Yar’Adua, conveyed the directive to the Minister of Petroleum Resources. “Eliminating existing subsidy on the consumption of kerosene, taking into account that subsidy payments by Government on kerosene do not reach the intended beneficiaries,” was the first of four measures listed for implementation, with effect from July of that year.
The denial smacks of rank decadence. The NNPC, not Sanusi, is Nigeria’s albatross in its public finance management – helped, of course, by a conniving Presidency.