Reactions trail Nigerian CBN Governor’s Suspension

It’s hard to have missed the uproar that has ensued since the sudden suspension of Nigeria’s CBN Governor Sanusi Lamido Sanusi yesterday by President Goodluck Jonathan.

What’s worse is that he was served the notice while away in neighbouring Niger Republic, attending a meeting of West African central bank governors.

The controversial suspension follows revelations by the CBN governor on local and international media about a certain unremitted $20 billion oil revenue by the Nigerian National Petroleum Corporation (NNPC). Claims Nigeria’s Finance Minister, Ngozi Okonjo Iweala has since sought to debunk, calling on the ministry to carry out an external independent audit to allay the fears of Nigerians regarding the issue.

Vows to Challenge Suspension in Court

Sanusi has vowed to challenge  his suspension in Court stating that although he was not interested in returning to the CBN top job, he was challenging the suspension to establish the independence of the CBN governor.

Speaking during  an interview with CNBC Africa, Sanusi said: “There may be the legal issue of whether the president, who does not have the power to remove the governor, has the power to suspend him or whether it is suspension and not removal.  I do plan to have the court confirm if indeed that authority exists and I will challenge it.

“Even if I challenged it, I am not going back to the job; certainly I will not go back, but I think it will be in the interest of the institution to crosscheck once and for all whether the Presidency has the power to do that. The reason is that if it is not challenged, then, the next CBN governor cannot be independent for fear of being suspended by politicians.”

We spoke to Nigerians in the UK to get their views on the issue which has divided opinion in Nigeria and globally. Speaking exclusively to Naijalivinguk, the Former Chairman of Kwara State Association in UK and Ireland (KWASANG), Mr Kayode Olaoye,  stated that the CBN Governor is not new to the Nigerian political scene and would have probably seen this coming.

According to Mr Olaoye, “Sanusi seems to be doing the right thing, I mean, as we all know, the Nigerian oil industry is shrouded in secrecy and anyone who is willing to cleanse the system or expose corruption at any level of government deserves to be commended. However, the Nigerian political system is very unforgiving; if you are brave enough to take them on, then it is inevitable that there will be some consequences for those actions.”

Mr Olaoye went on to say that the way the CBN Governor went about the whole issue was not the wisest, “A times, he was too confrontational in his approach. For a governor of the central bank, some of his comments was very unbecoming and no African president would accept that kind of behavior from a serving minister.”

Nike, another Nigerian holidaying in the UK at the moment feels that the Nigerian government is hiding a cover up. She insists the President has no business suspending the CBN governor because he called their bluff and reported the missing oil revenues. “Find the missing money and put it back into our economy”, she says.

According to the Presidency, some of the alleged financial infractions include:
1. Persistent refusal and/or negligence to comply with section 15 (1)(a) of the Public Procurement Act in the procurement practices of the Central Bank of Nigeria; hence,  acting in an unlawful manner and promoting a governance regime characterised by financial recklessness, waste and impunity, as demonstrated by the contents of its 2012 Financial Statements.
2. Reckless and unlawful expenditure by the leadership of the Central Bank of Nigeria on ‘Intervention Projects’ across the country.
3. Financial infractions and acts of financial recklessness committed by the Central Bank as reflected in its audited financial statements of 2012.
4. Inability of the CBN to prepare its financial statements using applicable International Financial Reporting Standards (IFFS), whereas Deposit Money Banks that the CBN is supervising have complied with this national requirement since 2012. This laxity calls to question CBN’s capacity for proper corporate governance, as it sends wrong signals to both domestic and international investors on the state of the Nigerian economy.
5. Breaching in a material manner the provisions of the Memorandum of Understanding (MOU) signed by the CBN and other Deposit Money Banks on Banking Resolution Sinking Fund, particularly the refusal by the apex bank to constitute a Board of Trustees (BOT) to manage the Fund since 2010 when it was established and its continued utilisation of the Fund for certain operations without approval of the said BOT.
6. Acquiring 7% shares of International Islamic Management Corporation of Malaysia to the tune of N0.743 billion without bringing this transaction to Mr. President’s attention or a board approval obtained before it was entered into in disregard to section 34 (b) of the CBN Act 2007 which provides that the CBN shall not, except as provided in Section 31 of the Act, inter alia, purchase the shares of any corporation of company, unless an entity set up by the approval or authority of the Federal Government.
7. Failing to implement the provisions of the Personal Income Tax (Amendment) Act 2007, thus effectively assisting its staff to evade tax despite the generous wage package in the CBN, relative to other sectors of the economy.
8. Spending N3.086 billion on “promotional activities” in  2012 (up from N1.084 billion in 2011) even when the CBN is not in competition with any other institution in Nigeria.
9. Claiming to have expended N20.202 billion on ‘Legal and Professional Fees’ in 2011 beyond all reasonable standards of prudence and accountability as well as claiming to have spent N1.257 billion in 2012 between expenses on ‘Private Guards’ and ‘Lunch for Policemen’.
10. Breaching section 6(3)(c) of the CBN Act 2007 provides that the board of the CBN is to make recommendations to Mr. President on the rate of renumeration to Auditors and even going to the extent of changing one of the Joint External Auditors without notifying the office of the President.
11. Offering a breakdown of ‘Currency Issue Expenses’ for 2011 and 2012. Interestingly, it claimed to have paid N38.233 billion to the Nigerian Security Printing and Minting Company Limited (NSPMC) in 2011 for ‘Printing of Banknotes when paradoxically, however, in the same 2011, NSPMC reported a total turnover of N29.370 billion for all its transactions with all clients (including the CBN).
12. Claiming that CBN paid Air Charter, such as paid to Emirate Airline (N0.511 billion), Wing Airline (N0.425 billion) and Associated Airline (N1.025 billion) to distribute currency by air nationwide, when in essence Emirate Airline does not fly local charter in Nigeria. Wing Airline is not registered with Nigeria Civil Aviation Authority and Associated Airline does not have a billion turnover for 2011 because upon enquiry, the management claimed that they have no financial statements and have not had any significant operations for the past two years that will warrant preparation of financial statements.
13. Difficulties in understanding CBN  breakdown such as “Currency Issue Expenses” of N1.158 billion and Sundry Currency charges of N1.678 billion under “Currency Issue Expenses.” As they are in 2011 so are similar expenses in 2012.

14. Foreign Bank accounts that have been closed offshore were still operational in the General Ledger for over six months after they have been confirmed as closed accounts by the offshore banks.
15. CBN’s failure to properly follow “Know Your Customer” policy to the extent that the apex bank had unknown customer with account balance of N1.423 billion since 2008, while claiming that they are taking steps to obtain the required details regarding the address of the customer.
16. Wasteful training and travel expenses to the tune of N9.24 billion in 2012 up from N7.65 billion in 2011 and expenses on “ATM offsite policy change” coming to N1.045 billion.
17. Apart from expenses on “Non Interest Banking” N1.359 billion in 2012 up from N0.977billion in 2011, the CBN is still very heavy on expenses on “Project Eagles” spending N0.606 billion in 2012 up from N63million in 2011.
18. Spending N1.678 billion in 2012 up from N1.670 billion in 2011 on newspapers, books and periodicals (excluding CBN’s publications).

What are your opinions on the issue?

Related News

Leave a Reply

Your email address will not be published. Required fields are marked *

Download NL Magazine Latest Issue

Copyrıght 2014. All RIGHTS RESERVED NAIJA LIVING UK.
Naija Living UK is a subsidiary of Talk Media Ltd.
Registered in England and Wales.