Two Years of Sanusi Lamido as Governor of Central Bank
The appointment of Sanusi Lamido Sanusi as the Governor of Nigeria’s Central Bank in June 2009 was one of the laudable things the administration of late President Umaru Musa Yar’Adua did. His appointment during the time of global financial crisis was a well taken decision as the man has left no one in doubt about his mission to rescue the Nigeria’s hitherto comatose financial sector. In the two years that Malam Sanusi has been in the saddle as the Central Bank Governor, the apex bank has taken many critical, unpopular but needful decisions.
His first major assignment was the initiation of CBN and NDDC forensic audit of the account books of all the 24 operating banks in Nigeria. The audit report, which he could have swept under the proverbial carpet or used to extort money from indicted Managing Directors, if he had wanted to corruptly enriched himself, was rather made public and formed the basis of the removal of a total of eight bank Managing Directors who were found to have abused their exalted positions. He appointed interim Managing Directors in their stead. While the Economic and Financial Crimes Commission has successfully prosecuted one of them through a plea bargaining deal, the other seven are still having their days in court. The CBN governor also approved a total of N620 billion bailout for the eight ailing banks to prevent them from going under. These actions led to series of litigations by the affected parties, job loss in the affected banks and pitched the CBN governor with the Senators and House of Representatives members. With the benefit of hindsight however, I am of the opinion that Malam Sanusi acted in the national interest.
Another key decision taken by CBN under the current Bank’s Governor was the pegging of the tenure of bank Chief Executive Officers (CEOs) and Managing Directors to maximum of two terms of 5 years each. This is unprecedented! Despite the hullabaloo that greeted the decision in January 2010, by June of the same year, the bank MDs who have stayed 10 years and above have all voluntarily taken their graceful exit with the bank’s board appointing their successors who have since taken charge. In order to ease the credit crunch, CBN leadership of Malam Sanusi lowered the interest rate benchmark. Under him, the Asset Management Company of Nigeria (AMCON) law was passed by the national assembly and the board inaugurated.
Other reformed measures taken by the CBN under Sanusi Lamido was the classification of the banks into four groups with different capital bases; namely, international, specialised, regional, and national banks. The CBN also initiated idea of having a 10-year reform for the Nigeria banking industry which the CBN governor at a pre-convocation lecture at Bayero University, Kano in February 2010 said was aimed at “enhancing the quality of banks, establishing financial stability, enabling healthy financial sector evolution and ensuring that financial sector contributes to the real economy.”
In September 2010, CBN withdrew the licence of 224 microfinance banks and thereafter restored the licence of 37 of them. There was also the reported crackdown on the bank debtors as four non-executive directors of Finbank were allegedly suspended for 90 days by Central Bank of Nigeria on September 27, 2010 for failure to pay their debts totalling N20 billion.
In November 2010, CBN issued a directive which states that: "from the date hereof, no bank shall grant or permit to subsist, any loan, donation, gifts or any form of financial accommodation to any political funds, political party, or for political purposes whether directly or indirectly; incur any political expenditure". CBN under the leadership of Malam Sanusi also directed banks to ask their customers to update their account details and at present, banks are also executing the CBN directed Nigerian Uniform Bank Account Number (NUBAN) for all their customers. On Thursday, April 28, 2011, Central Bank of Nigeria issued a circular titled “Industry Policy on Retail Cash Collection and Lodgement”. In the circular, the CBN put a cap on the amount an individual can withdraw from his or her account at N150, 000 while corporate organisations can only withdraw maximum of N1 million in a day.
The aforementioned policy decisions and directives were taken under the leadership of the indefatigable but highly controversial CBN Governor, Sanusi Lamido Sanusi. Under the incumbent CBN Governor, risk management has been central to banking operations as financial institutions have stopped granting unsecured and non-performing loans. Thus, it is no longer business as usual. The CBN Governor also stirred the hornet’s nest when he said at Igbinedion University 2010 Convocation Lecture that Nigeria’s national parliamentarians consume 25 per cent of the country’s annual budget. He was promptly summoned by the two chambers of the national assembly to come and explain the statement which they considered untrue and careless. He defended himself creditably. He refused to be cowed and even offered to resign his position if need be.
The CBN Governor has been much appreciated locally and internationally with flurry of awards and recognitions. This shows that only the corrupt, selfish and the unscrupulous love to hate him. To my mind, he is fearless, patriotic, conscientious, and of exemplary conduct. If he were to be a lawyer, we would have seen another fiery legal practitioner in the mould of late Chief Gani Fawehinmi who spent his life fighting the cause of the masses. Sanusi’s detractors have levelled all manners of allegations against him but none of such have been proven to be true. Amongst other things, he is accused of hidden, ethnic agenda in the removal of the 8 bank CEOs in 2009 and the proposed sale of the rescued banks; he is alleged to be talkative, brash and playing to the gallery. In my estimation, there seems to be too many reform measures being pushed in a short span of time and am just worried about faithful implementation of these initiatives. Irrespective of his human failings, I believe he deserves all the honours and accolades he has been showered. What the CBN action Governor needs is our prayers and support through constructive engagement of his bank’s policies so that Nigeria can be liberated from her current economic quagmire.
His first major assignment was the initiation of CBN and NDDC forensic audit of the account books of all the 24 operating banks in Nigeria. The audit report, which he could have swept under the proverbial carpet or used to extort money from indicted Managing Directors, if he had wanted to corruptly enriched himself, was rather made public and formed the basis of the removal of a total of eight bank Managing Directors who were found to have abused their exalted positions. He appointed interim Managing Directors in their stead. While the Economic and Financial Crimes Commission has successfully prosecuted one of them through a plea bargaining deal, the other seven are still having their days in court. The CBN governor also approved a total of N620 billion bailout for the eight ailing banks to prevent them from going under. These actions led to series of litigations by the affected parties, job loss in the affected banks and pitched the CBN governor with the Senators and House of Representatives members. With the benefit of hindsight however, I am of the opinion that Malam Sanusi acted in the national interest.
Another key decision taken by CBN under the current Bank’s Governor was the pegging of the tenure of bank Chief Executive Officers (CEOs) and Managing Directors to maximum of two terms of 5 years each. This is unprecedented! Despite the hullabaloo that greeted the decision in January 2010, by June of the same year, the bank MDs who have stayed 10 years and above have all voluntarily taken their graceful exit with the bank’s board appointing their successors who have since taken charge. In order to ease the credit crunch, CBN leadership of Malam Sanusi lowered the interest rate benchmark. Under him, the Asset Management Company of Nigeria (AMCON) law was passed by the national assembly and the board inaugurated.
Other reformed measures taken by the CBN under Sanusi Lamido was the classification of the banks into four groups with different capital bases; namely, international, specialised, regional, and national banks. The CBN also initiated idea of having a 10-year reform for the Nigeria banking industry which the CBN governor at a pre-convocation lecture at Bayero University, Kano in February 2010 said was aimed at “enhancing the quality of banks, establishing financial stability, enabling healthy financial sector evolution and ensuring that financial sector contributes to the real economy.”
In September 2010, CBN withdrew the licence of 224 microfinance banks and thereafter restored the licence of 37 of them. There was also the reported crackdown on the bank debtors as four non-executive directors of Finbank were allegedly suspended for 90 days by Central Bank of Nigeria on September 27, 2010 for failure to pay their debts totalling N20 billion.
In November 2010, CBN issued a directive which states that: "from the date hereof, no bank shall grant or permit to subsist, any loan, donation, gifts or any form of financial accommodation to any political funds, political party, or for political purposes whether directly or indirectly; incur any political expenditure". CBN under the leadership of Malam Sanusi also directed banks to ask their customers to update their account details and at present, banks are also executing the CBN directed Nigerian Uniform Bank Account Number (NUBAN) for all their customers. On Thursday, April 28, 2011, Central Bank of Nigeria issued a circular titled “Industry Policy on Retail Cash Collection and Lodgement”. In the circular, the CBN put a cap on the amount an individual can withdraw from his or her account at N150, 000 while corporate organisations can only withdraw maximum of N1 million in a day.
The aforementioned policy decisions and directives were taken under the leadership of the indefatigable but highly controversial CBN Governor, Sanusi Lamido Sanusi. Under the incumbent CBN Governor, risk management has been central to banking operations as financial institutions have stopped granting unsecured and non-performing loans. Thus, it is no longer business as usual. The CBN Governor also stirred the hornet’s nest when he said at Igbinedion University 2010 Convocation Lecture that Nigeria’s national parliamentarians consume 25 per cent of the country’s annual budget. He was promptly summoned by the two chambers of the national assembly to come and explain the statement which they considered untrue and careless. He defended himself creditably. He refused to be cowed and even offered to resign his position if need be.
The CBN Governor has been much appreciated locally and internationally with flurry of awards and recognitions. This shows that only the corrupt, selfish and the unscrupulous love to hate him. To my mind, he is fearless, patriotic, conscientious, and of exemplary conduct. If he were to be a lawyer, we would have seen another fiery legal practitioner in the mould of late Chief Gani Fawehinmi who spent his life fighting the cause of the masses. Sanusi’s detractors have levelled all manners of allegations against him but none of such have been proven to be true. Amongst other things, he is accused of hidden, ethnic agenda in the removal of the 8 bank CEOs in 2009 and the proposed sale of the rescued banks; he is alleged to be talkative, brash and playing to the gallery. In my estimation, there seems to be too many reform measures being pushed in a short span of time and am just worried about faithful implementation of these initiatives. Irrespective of his human failings, I believe he deserves all the honours and accolades he has been showered. What the CBN action Governor needs is our prayers and support through constructive engagement of his bank’s policies so that Nigeria can be liberated from her current economic quagmire.
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