THE suspension of the Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi on Thursday, February 20, 2014, by President Goodluck Ebele Jonathan may have taken a toll on the capital market as well as the exchange rate of the naira. Expectedly, the bears had a field day upon the suspension of the controversial apex bank chief even as the naira hopelessly depreciated against major foreign currencies.
The naira which exchanged at N165 against the dollar early in the week fell to N168 by Friday, February 21, 2014. It also lost to British pounds and the euro. The current exchange rate of naira to British pound is now N278 while it is N258 to the euro.
The capital market, from ENCOMIUM Weekly’s investigations depreciated by N186 billion at the close of the market on Thursday, February 20, 2014. In what analysts agreed was a major downturn, the market capitalization of listed equities dropped by 1.47 per cent to N12.468 trillion from N12.654 trillion recorded the previous day.
Also, the Nigeria Stock Exchange (NSE), All Share Index went down by 580.90 basis points. From 393.97.09 points traded on Wednesday, February 19, 2014, to 388816.19 points on the day Sanusi was axed.
Similarly, the NSE trading result showed that investors traded 483.545 million shares worth 4.857 billion in 4,539 deals as against that Thursday’s 303,346 million shares valued at N3.804 billion traded by investors in 5,911 deals.
Experts also attributed the slide in market indices to uncertainty that currently surrounds the financial sector, since investors are yet to come to terms with the direction the market would go. Their fear is that the removal of the CBN Governor may impact negatively on the market.
The capital market was so bad on the day Sanusi was fired that 46 stocks including Guinness Nigeria Plc, Nigerian Breweries Plc, Oando and other market leaders found themselves on losers’ chart.
Despite the shock, there were, however, a glimpse of hope that the market will sure rebound after the initial shock. Already, some stocks have started appreciating!
By Friday, February 21, 2014, the market was on its way to profitability, following the assurances of the Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, that the changes at the CBN won’t affect government policy direction.
Dr. Iweala explained that the Acting CBN Governor has been in the system for over two decades.
With panic in the polity over Sanusi’s sack, the opposition, activists and stakeholders had cautioned Jonathan to tread softly.
For the opposition All Progressives Congress (APC), the suspension of Sanusi is ‘patently illegal, poorly thought out and in bad taste.’ In a statement by the party’s Interim National Publicity Secretary, Alhaji Lai Mohammed, the APC also noted that it will have negative consequences for the nation’s economy. Like her colleagues in the House of Representatives, Hon. Abike Dabiri-Erewa also faulted the Federal Government’s removal of Sanusi.
Some civil society organizations including the Socio-Economic Rights and Accountability Project (SERAP) and Human Rights Writers Association (HURIWA), have also chided the Federal Government for firing the apex bank’s chief.
SERAP, in a statement on Thursday, February 21, 2014, by its Executive Director, Adetokunbo Mumuni said, “The government should not politicize the fight against corruption. Our concern remains the urgent, thorough, transparent and effective investigation into the allegations that $20 billion oil money is missing from the account of the Nigerian National Petroleum Corporation (NNPC).”
ENCOMIUM Weekly also spoke with human rights lawyer, Bamidele Aturu on Friday, February 21, 2014, and he had this to say: “The decision is symptomatic of the desperation that has gripped the Presidency and its allies in the wake of the troubling allegations made by Sanusi that public officials in the NNPC are looting the country blind in the name of subsidy payments. To the best of my knowledge, the allegation has not been coherently answered by the corporation or by the government.”
Also reacting to Sanusi’s sack, former Aviation Minister, Chief Femi Fani-Kayode told ENCOMIUM Weekly in a phone chat on Saturday, February 22, that Jonathan has again shown he is not ready to fight corruption. He said Sanusi is being witch hunted for his exposure of the alleged $20 billion fraud in NNPC.
But many have also hailed the sack of Sanusi as CBN boss. One financial analyst, Simon Osigwe said the sack would have been carried out long ago, not at the time he alleged missing of $20 billion oil money. He accused Sanusi of damaging the integrity of CBN.
Ayo Turton, a Constitution and Corporate Attorney also queried the rationale behind Sanusi spending over N30 billion in ‘intervention fund’ without appropriation. He also alleged that after Sanusi injected funds for sick banks, he sold them for crap and some of the banks to their biggest debtors.
The General Secretary of Independent Shareholders Association of Nigeria, Adebayo Adeleke also noted that the suspension of Mallam Sanusi Lamido Sanusi was long overdue.
Similarly, President Goodluck Jonathan’s supporters in and outside the Peoples Democratic Party (PDP) have also commended him for removing Sanusi from office. They argued that he is now more of a politician, religious extremist than the banker of bankers.
No matter where commentators’ interest lie, the purported sack of Sanusi will continue to generate heated debate until the court decides who is right or wrong.
THE MULTIPLE SINS OF SANUSI
IN suspending Sanusi Lamido Sanusi, the Federal Government accused him of “financial recklessness and misconduct, which are inconsistent with the administration’s vision of a Central Bank propelled by the core values of focused economic management, prudence, transparency and financial discipline.”
The reference to financial recklessness has a lot to do with the former CBN Governor’s donation of N100 million to the victims of Boko Haram attacks in Kano State in early 2012. Leaders of other ethnic nationalities had asked why CBN didn’t extend similar gestures to hundreds of Igbo who were equally victims of violent attacks by the dreaded Islamic fundamentalist sect.
Lamido Sanusi also made billions of donations to schools, especially in the North.
It was learnt that President Goodluck Jonathan had, four weeks ago signed a nine-page letter written by the Attorney General of the Federation, Mohammed Adoke with input from the Financial Reporting Council of Nigeria (FRCN), for the consent of the Senate for the suspension. But the transmission of the letter was delayed by the President’s trip to Addis Ababa for the African Union (AU) meeting at that time.
The Presidency, based on the preliminary findings by the FRCN, had in May, 2013, queried the CBN Governor over 22 infractions discovered in the apex bank’s books. Sanusi’s response was reportedly not satisfactory.
There are indeed a whole lot of allegations raised by the Financial Reporting Council of Nigeria (FRCN), released to the Presidency in June, 2013.
They included Sanusi’s CBN allegedly expending N20.202 billion on legal and professional fees in 2011.
According to the report that allegedly indicted Sanusi, he spent N1.257 billion in 2012 on lunch for police men and private guards.
CBN also allegedly claimed to have spent N2 billion on chartered plans, and paid Emirates Airline (that does not operate local flight) N511 million; Wing Airline that is allegedly not registered also got N425 million and Associated Airline, N1.02 billion to distribute currency by air nationwide. But curiously, Associated Airline didn’t have a billion turnover in 2011.
From the FRCN files that indicted the former CBN boss, “Currency Issue Expenses gulped N1.158bn, sundry currency charges, N1.678bn” (a duplication now being investigated).
Other issues raised by FRCN included the alleged Facility Management Bill of a whooping N7.034bn in 2012 and training and travel expenses broken down as N9.24bn in 2012 and N7.65bn in 2011.
Sanusi allegedly spent all of N1.678 billion on newspapers, periodicals, books and publications.
CBN also claimed to have paid N38.233 billion to the Nigerian Security Printing and Minting Company Ltd., In 2011, but NSPMC allegedly reported total revenue of N29.37 billion for all its transaction with all clients including the CBN.
In concluding its report, the FRCN also made reference to billions of naira the former CBN Governor spent on intervention projects outside its statutory duties without following due process.
But in all, Lamido Sanusi Lamido, who is already in court to challenge his suspension is insisting he has done no wrong to warrant a sanction from President Goodluck Joanthan.
Here are other alleged reasons Sanusi was fired:
CAPITALIZATION OF RESCUED BANKS
The injection of over N600,000 billion into the rescued banks has also been an issue, especially when it was not appropriated by the National Assembly.
Sanusi may have also entered into the bad books of lawmakers when he revealed that over 25 per cent of the nation’s budget was expended on their salaries.
Christians also asked for Sanusi’s removal following his more than a passing interest in Islamic banking. In fact, the President of Christian Association of Nigeria (CAN), Pastor Ayo Oritsejafor accused him of promoting Islamic banking with public funds.
PROPOSED CURRENCY REFORM
Public outcry also trailed Sanusi’s plan to print N5,000 note, though the idea was later set aside.
HIS PROBLEM WITH BANKS
Sanusi’s policies which affected the profitability of banks may have also incurred the wrath of the disgruntled bank chiefs. Apart from massive job losses that have rocked the banking sector since he came on board, it has not been business as usual for bank executives and directors who had a field day during the tenures of previous CBN Governors.
FACE-OFF WITH PRESIDENT JONATHAN
The suspended CBN Governor was oblivious of the fact that he was digging his grave when he wrote a letter to him, alleging that N49.8 billion has not been remitted by the NNPC.
Following the accusation that Sanusi leaked the letter, President Jonathan had asked him to resign, but he defied the order, insisting he cannot be forced out of office.