Nigeria News

NIGERIA: Sanusi Should Address Weighty Issues Raised in FRC’s Report

I have spent the last 10 days watching Sanusi Lamido Sanusi, the suspended governor of the Central Bank of Nigeria dancing naked in the public. He did reggae, then Fuji, Bata and followed it up with hip hop. I have thoroughly enjoyed this dance of shame. It is a pity that he does not know that he is dancing naked and the sycophants and politicians around him are unwilling to tell him the truth.
Rather than address his indictment in the report of the Financial Reporting Council of Nigeria on the Audited Financial Statements of the CBN for the year ended 31st December 2012, Sanusi has been playing politics and running from pillar to post, trying to get one court injunction or the order against his arrest. I must confess that I find his charade sickening. The report pointed out the untidy manner in which he had conducted the operations of the CBN. This is what he should address. Many Nigerians are not even aware that the issue is not about the untidy whittle he blew over alleged mismanagement of the country’s oil revenue. The FRC report indicted him long before he did this.
Sanusi’s indictment is grave. It is pertinent to take a dispassionate second look at the FRC report for us to really understand the magnitude of the case against Sanusi. The report reads partly: “In a most ironical manner, it has become obvious that the CBN is not able to prepare its financial statements using applicable International Financial Reporting Standards (IFRS) whereas Deposit Money Banks that the CBN is supervising have complied with this national requirement since 2012. Undoubtedly, this laxity on the part of our apex bank, apart from calling to question its capacity for proper corporate governance, is capable of sending wrong signals to both domestic and international investors on the state of the Nigerian economy.
“The provisions of the Memorandum of Understanding (MoU) signed by the CBN and other Deposit Money Banks (DMBs) on Banking Resolution Sinking Fund have been breached in a material manner. For example, a Board of Trustees (BOT) to manage the Fund has not been constituted since 2010 when it was established. The CBN has however continued to utilise the Fund for certain operations without the approval of the said BOT.
“Contrary 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 or company, unless an entity set up by the approval of the authority of the Federal Government, CBN in 2010, acquired 7% shares of International Islamic Liquidity Management Corporation of Malaysia to the tune of N0.743 Billion. This transaction was neither brought to Mr. President’s attention nor was a Board approval obtained before it was entered into.
“The CBN had an additional brought forward to General Reserve Fund of N16.031 Billion in 2012 but proceeded on a voyage of indefensible expenses in 2012 characterised by inexplicable increases in some heads of expenditure during the year. Examples include:
(i) The bank spent N3.086 billion ‘promotional activities’ in 2012 (up from N1.084 Billion in 2011). The bank spent this sum even when it is not in competition with any other institution in Nigeria; (ii) The CBN claimed to have expended N20.202 billion on ‘Legal and Professional Fees’ in 2011, beyond all reasonable standards of prudence and accountability; (iii) Between expenses on ‘Private Guards’ and ‘Lunch for Policemen’, the CBN claimed to have spent N1.257 Billion in 2012; (iv) While 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 remuneration to Auditors, the Bank has consistently observed this provision in the breach and even went to the extent of changing one of its Joint External Auditors without notifying the office of the President.
“In the explanations offered by the CBN pursuant to Presidential directives, it offered a breakdown of ‘Currency Issue Expenses’ for 2011 and 2012. Interestingly, it claimed to have paid a total of N38.233 billion to the Nigerian Security Printing and Minting Company Limited (NSPMC) in 2011 for printing of banknotes’. Paradoxically however, in the same 2011, NSPMC reported a total turnover of N29.370 Billion for all its transaction with all clients (including the CBN).”
How could the CBN under Sanusi spend about N1.3 billion on private “security guards and lunch for policemen? The external audit further revealed balances of sundry foreign currencies without physical stock of foreign currencies in the CBN head office and questionable write-off of N40 billion naira loans of a bank.
These are just some of the grave infractions unmasked by the external auditors, which clearly shows recklessness and gross incompetence which characterised the operations of the CBN in 2012 under Sanusi. One would have expected him to take up the issues one by one and address them. Rather, the suspended CBN governor has been busy making reckless and unguarded statements. This is an insult on Nigerians and this should not be allowed to continue. The CBN under Sanusi obviously carried out its functions in a manner characterised by disregard for due process and accountability.
The government did not just make a blanket statement on Sanusi’s disregard for due process and accountability. It stated that this was exemplified by various acts of financial recklessness and unprofessional conduct 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.
It is pertinent to also dispassionately look at other fianacial recklessness of Sanusi according to a statement by the government: “Persistent refusal and/or negligence to comply with the Public Procurement Act in the Procurement Practices of the Central Bank of Nigeria; By virtue of Section 15(1) (a) of the Public Procurement Act, the provisions of the Act are expected to apply to all ‘procurement of goods, works and services carried out by the Federal Government of Nigeria and all procurement entities.’ The definition clearly includes the Central Bank of Nigeria; It is however regrettable the Central Bank of Nigeria under Sanusi’s leadership, has refused and/or neglected to comply with the provisions of the Public Procurement (PPA).”
The government further disclosed that    available information indicates that the CBN under Sanusi had over the years engaged in procurement of goods, works and services worth billions of naira each year without complying with the express provisions of the PPA.
The government   said “by deliberately refusing to be bound by the provisions of the Act, the CBN has not only decided to act in an unlawful manner, but also persisted in promoting a governance regime characterised by financial recklessness, waste and impunity, as demonstrated by the contents of the 2012 Financial Statements.
“No responsible government will tolerate this blatant      disregard for its laws and procedures by any person or institution. The Central Bank, by its unique position, ought to show good example and be the leading light in the promotion of the culture of observance of due process.”
The unlawful expenditure by Sanusi’s CBN on “Intervention Projects” across the country as reflected in the FRC’s report should also be of concern to all Nigerians. As clearly stated by the government: “The unacceptable level of financial recklessness displayed by the leadership of the Central Bank of Nigeria is typified by the execution of ‘Intervention Projects’ across the country. From available information, the bank has either executed or is currently executing about 63 (sixty-three) such projects across the country, to which the CBN has committed N163 billion.
“It is inexcusable and patently unlawful for any agency of government to deploy huge sums of money as the CBN has done in this case, without appropriation and outside the CBN’s statutory mandate. It is trite that the expenditure of public funds by any arm of government must be based on clear legal mandates, prudent costing and overriding national interest. Cognisant of the attendant negative consequence of the CBN’s action, a review of the Central Bank (Establishment) Act 2007 does not disclose any legal basis for the huge expenditure on intervention projects in default of appropriation.”
So, the ball is in Sanusi’s court. Running from one court to another, trying to get one injunction or the other is out of the question. It seems Sanusi wants to use the court to frustrate further investigation of the allegations against him and stall any plan to arraign him for corruption. I think the best court he should come to is the Peoples Court. Let him out with facts and figures, if he has any, to counter the report of the FRC. This country has had enough of his hypocrisy.
Sanusi has clearly disappointed many Nigerians if he does not know this. His friends in the opposition party can’t tell the truth. But, let him listen to the following from a Senior Advocate of Nigeria, SAN, Mike Ozekhome: “Sanusi deviated from his primary duty of leading the apex bank to the path of monetary stability. A governor of a Central Bank in any part of the world should be seen and not heard.“When he should be heard, he should only be discussing monetary policies which will uplift the economy of his country. In Nigeria, what we have is a CBN governor that has been fighting the government of his country. Mr. Sanusi had been making very provocative and highly derogatory statements about the monetary policies of his own country. When you say all that, then how do you want international investors to come to the country, when a very reliable figure is saying all these negative things about his country. The CBN governor had been acting like a political leader or traditional ruler by donating public funds to universities, political aides and at other functions.
“Sanusi was not versatile and had made six mistakes on the missing funds from the Nigeria National Petroleum Corporation, NNPC, within the last two months. This variation in figures of the missing funds has caused chaos in the country, which is not supposed to be so. People should look at this from all sides. It is easy for people to say Sanusi’s sack was because he exposed the truth. But, no! This is not it. When Sanusi became the governor, the exchange rate of the Dollar with the Naira was about N130. Today it is anything between N160 to N170 to a dollar. This is the poorest so far in the history of this country.”

Leave a Reply