Leadership (Abuja)

17 March 2014

Nigeria: Sanusi Responds to Allegations of Financial Recklessness

Photo: Premium Times
Sanusi Lamido Sanusi

Suspended Central Bank of Nigeria (CBN) governor Sanusi Lamido Sanusi yesterday responded to the allegations of financial recklessness levelled against him by the Financial Reporting Council of Nigeria (FRCN).

Sanusi, who provided a detailed 28-page response with additional documents to the allegations levelled against him by the Financial Reporting Council of Nigeria (FRCN), insisted that the allegations levelled against the CBN under his leadership were false and unfounded.

"I am publishing these responses to enable the general public see that each and every allegation levelled against the CBN under my leadership is false and unfounded, and that many of the allegations were malicious and fabricated, having been designed to mislead the

president into believing that the management of the Central Bank was guilty of misconduct and recklessness."

According to him, "I saw the FRCN "Briefing Note" for the first time when it was attached to the suspension letter. At no time was this report sent to the CBN either by the president or the FRCN for comments or explanations. As for the Akingbola petition, it is a rehash of baseless allegations he has been making since 2010 which apparently he must have been asked to reproduce on February 9, ten days before the suspension.

"A careful examination of the allegations contained in the FRCN Briefing Note to Mr President, will show that each of the allegations could easily have been resolved by a simple request for clarification or more careful review. There is no doubt that if the CBN had received the Briefing Note, which was prepared in June 2013, all the misconceptions, misrepresentations and erroneous inferences contained therein would have been cleared."

Providing detailed and specific responses to each of the 35 allegations brought against him, Sanusi, responding to allegation of non-compliance with the provisions of the Public Procurement Act (PPA), said the CBN wrote to the late President Yar'Adua, requesting certain exemptions in CBN's procurement process.

"The only issue that has been raised to the knowledge of the CBN is that the CBN, over a period in the past, did not obtain 'Certificate of No Objection' from the BPP before awarding contracts.

"On 11 August 2008 (before my tenure), the CBN wrote to His Excellency President Yar'Adua, requesting certain exemptions in CBN's procurement process. On 20 August 2008, the President gave his approval to the CBN's application.

"In line with this approval, the CBN continued to approve its contracts in full compliance with the Public Procurement Guidelines, with the only exception that it did not apply for a 'Certificate of No Objection' based on the Presidential waiver.

"It should be noted that the CBN's own procurement process is more or less identical to the procurement process under the Public Procurement Act (PPA). Indeed, the BPP has had occasion to write in the past commending the CBN's commitment to transparency and making recommendations for further improving the process."

Sanusi also faulted the government for acting based on the petition of Erastus Akingbola, ousted boss of the former Intercontinental Bank, saying "it is indeed strange that the CBN governor can be suspended based on allegations written by a man who ran his bank into the ground and against whom judgement has been obtained in a London court, and who furthermore is facing criminal prosecution at home for offences including criminal theft".

"Having provided detailed explanations, backed by verifiable documents, it is my sincere wish that His Excellency Mr President, in line with his adherence to fairness and justice, will apply the same rationale and rigour to other agencies of the Federal Government that have had serious allegations and queries levied against them, and prevail upon them to provide responses and explanations with the same level of clarity and transparency," Sanusi urged.

In responding to the allegations, Sanusi said the difference between figures indicated in the financials of the CBN and the Nigerian Security Printing and Minting Plc (NSPMP) was "a simple reflection of timing differences between recognition of expenses by the CBN and income recognition by the NSPMP".

He explained that although its 2011 and 2012 financials indicated that it paid the N38.233 billion in 2011 for printing of banknotes, whereas the entire turnover of NSPMP was N29.370 billion, "the expense item of N38.233 billion to NSPMP was made up as follows: N28.738 billion payment to NSPMP in 2011; N6.587 billion accrued liability in 2011 but paid in 2012 when deliveries were received; and N2.829 billion audit adjustment journal entry into the account at the end of 2011 in respect of prepayments to NSPMP."

On allegations of wasteful spending of the CBN under his watch, Sanusi said "in the year 2008, just before I took over office at the CBN, the contribution of the CBN to the Federation Account was N8billion. Based on the 2012 annual accounts, our contribution rose tenfold to N80 billion, while in 2013, our contribution, based on the audited accounts, was N159billion.

"It is noteworthy that in the five years of my tenure as CBN Governor (2009 - 2013), the CBN has contributed N376 billion to the Federal Budget as IGR (Internally Generated Revenue). Indeed in 2012, the House of Representatives Committee on Finance publicly commended the CBN for being the highest contributor of revenues to the FGN among MDAs - accounting for 75 per cent of the total IGR contributed by MDAs between 2009 and 2012. The CBN has been able to achieve this through prudent management of costs, including currency expenses and overheads."

Probe CBN's account under Sanusi's tenure now - PDP

Meanwhile, the PDP also alleged that its investigation revealed that the APC and its stalwarts have been the "beneficiaries of siphoned CBN money surreptitiously diverted to them by the suspended CBN governor".

The ruling party noted that a "fraudulent N48 billion contract was awarded to a leader of the APC while N5 billion was further paid to another stalwart of the party as consultancy fee".

The PDP said the bank also diverted over N1billion to the APC to open offices across the nation in addition to N100 million donated to each of some chieftains of APC to fund their activities last year.

The PDP further insisted that the audit on CBN's account must expose the true beneficiaries of over N150 billion doled out as developmental donations especially as some of the institutions listed as beneficiaries such as the Bayero University Kano (BUK) have denied receiving the sums recorded against their names by the CBN.

PDP noted that BUK was widely reported to have announced that it received only N1billion as against the N4 billion claimed by the apex bank.

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