23 May 2014

Nigeria: For Sanusi a Court Loss, for CBN, New Era Begins

The war of attrition between the presidency and the suspended Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, is winding to a close. The recent court ruling which put in abeyance his reinstatement and the imminent expiration of his tenure effectively paved the way for a new era at the central bank.

The court ruling, which transferred the hearing of the suit on his reinstatement to the National Industrial Court (NIC) has given the governor-designate, Mr. Godwin Emefiele, the green light to assume office come June 2, 2014, as there will be no time for adjudication on the suit before the expiration of the suspended governor's tenure.

Even if the NIC decides to hear the case in the future and rules in Sanusi's favour, the judgment would have no effect whatsoever as it would have been overtaken by events, effectively rendering the suit an academic exercise.

The suspended governor has been in a running battle to save his face and get reinstated following the circumstances that led to his suspension in February this year.

Sanusi had stirred the hornet's nest in a letter to President Goodluck Jonathan in which he initially alleged that $48.9 billion from crude oil receipts between January 2012 and July 2013 which should have been remitted to the Federation Account, had been diverted by the Nigeria National Petroleum Corporation (NNPC).

But it was not so much the content of the letter that was later to bother the president, but the fact that three months after the letter was written, it was leaked to the media, causing a massive outcry from the public and demands that NNPC should be probed and account for the unaccounted for funds.

Once the letter became public knowledge, a joint meeting between the relevant ministries, CBN and other agencies of government to reconcile the whereabouts of the $49.8 billion was held.

After the reconciliation meeting, the CBN governor was forced to scale down the amount he alleged was unaccounted-for to $12 billion and or $10 billion. The inconsistency in the amount involved did put a question mark on Sanusi's credibility and further eroded whatever was left of his relationship with the presidency.

At this juncture, the president had had enough of Sanusi and pointedly asked him to resign, accusing him of leaking the letter in the first instance in order to embarrass and undermine his administration. But in his characteristic manner, Sanusi bluntly denied the allegation and refused to resign, reminding the president that he could only be removed by two-thirds of the Senate.

The episode must have been very embarrassing for the president but he relented when some people intervened on his behalf and pleaded with the president to allow Sanusi stay till the end of his tenure.

But Sanusi was not done on the matter. He was later to scale up the unremitted amount to $20 billion when he appeared before the Senate Committee on Finance during the probe of unaccounted-for funds, and expanded his scope of allegations to include the kerosene subsidy scam and the non-remittance of oil revenue by the Nigerian Petroleum Development Company (NPDC), the exploration and production subsidiary of NNPC.

With his unyielding disposition, Jonathan threw the book at him by suspending him and used the report of the Financial Reporting Council of Nigeria (FRC), which had raised queries on the accounts of the CBN and accused him of financial recklessness, as reason for his ouster on February 19 while he was on a trip to neighbouring Niger.

On learning of his removal, Sanusi cut short his trip and rushed back to Nigeria, but had his passport seized from him on his arrival in Lagos.

It was from this point forward that Sanusi started his running legal battles to clear his name and regain his position as governor of the CBN.

First he filed a suit to stop agencies of government from harassing him and further seizure of his passport. The embattled suspended governor got a reprieve as a federal high court sitting in Lagos awarded him about $300,000 (£180,000) in damages.

The court also ordered the federal government, the State Security Service (SSS) and the police to immediately release the passport unlawfully seized from him.

He also filed a suit to stop the FRC from investigating him for which he got a reprieve as the trial judge on May 12 ordered the FRC to stop investigating him. The FRC has however appealed the judgment. He later challenged his removal as governor and sought reinstatement by suing the president, and the Attorney-General of the Federation and the police, asking the court to declare his suspension by the president null and void.

However, a federal high court in Abuja on Tuesday ruled that it lacked jurisdiction to entertain the suit and transferred the suit to NIC.

The many legal battles that the suspended governor has had recourse to essentially betrayed his eagerness to save his reputation, as well as get reinstated to office as governor of the CBN. But with the latest judgment and barely 10 days to the expiration of his tenure, Sanusi's chances of getting reinstated are negligible, since the time frame for him to get a judgment in his favour has more or less run out.

While for Sanusi this could be deemed a setback, it is a new dawn for the CBN and Emefiele, the governor-designate, who will move into the saddle on June 2. Emefiele's assumption of office will finally put an end to the controversial reign of Sanusi, which saw many policy reversals, public actions and off-the-cuff remarks that were often considered unbecoming for someone occupying the conservative position of CBN governor.

But one thing that could never be taken away from Sanusi's tenure was the fact that he instituted a tight regime of risk management in the nation's banks and ensured the stability of the financial system by ridding banks of kleptomaniac executives and compelling banks to clean up their balance sheets. For this he won accolades and awards at home and abroad.

In Emefiele, however, the CBN will be getting a governor who will bring with him an unimpeachable track record of stability and focus in one of Nigeria's biggest banks. Indeed, his stewardship at Zenith Bank Plc has shown him to be a man of steadfastness and drive.

In contrast to Sanusi, his conservative, almost taciturn disposition is expected to impact positively on the central bank and provide it with a steady hand to navigate the vagaries of the economy.

During his Senate confirmation hearing, Emefiele had promised to work towards ensuring a stable and sound financial system for the country, reminding his audience that the core mandate of the CBN is to achieve monetary and price stability, ensure a strong exchange rate and to build foreign reserves.

He has also promised to implement policies that would open up the economy to new investment and employment opportunities, and at the same time ensure that banks remain healthy and perform their role of financial intermediation to the real sector.

With the change of baton already a fait accompli, Emefiele will be expected to hit the ground running as he charts a new course for the central bank - one that is controversy-free, but one that impacts positively on the Nigerian economy and its citizens.

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