In early August 2009 at a send fourth party organized for Sanusi Lamido Sanusi by the First Bank of Nigeria, his former employers at Ocean View Restaurant to mark his exit from the bank and his appointment as CBN Governor. Sanusi did something that few saw its significance. He came to the venue of his send fourth party and distributed two books to everybody in attendance including many bank CEOs and a cross section of high society. The title of the books are, How the Mighty Fall, and Good to Great, both are authored by Jim Collins.
The significance of the message Sanusi was passing to bank CEOs at the party which was lost on nearly everybody present then was simple. The title of the books carry poignant meaning. How The Mighty Fall and Good to Great may have aptly reflected the action Sanusi was about to take which many didnâ€™t see coming, particularly those whose lives were about to be affected the most, The Oba of Lagos who gave the opening prayer at the event pointedly accused some bank CEOs of financing efforts to thwart Sanusiâ€™s confirmation. He mocked them that their efforts failed despite their well oiled attempt.
After his prayer, there was an uneasy calm amongst the bank CEOs who attended. The silence that followed was that of the graveyard. It was particularly instructive that a few days after that party, Sanusi unleashed a tidal wave of reforms that eventually saw the sacking of eight bank CEOs. So began the banking reforms that has seen him transform to something of a folk hero to some and villain to others.
His unconventional and extremist approach has rankled not a few who queried his motives but Sanusi carried on unfazed by criticisms. He walked with a swagger and unusual confidence with a tinge of arrogance. He was like an alternate government who queried others but cannot be queried.
Five years after he distributed those books, things have turned full circle. Those he sacked after giving them those books will be too pleased to hand him back his books to read and apply the lessons in the book to himself to see how he strayed to where he now finds himself. His favorite
Ever since he made his debut on the national stage, the suspended CBN governor Sanusi Lamido Sanusi from the very first day gave notice of his outspokenness at the Senate hearing to confirm his nomination. Against tradition, he took a swipe at the government 7-point Agenda of the late President Musa Yarâ€™aduaâ€™s administration which nominated him suggesting that the seven points should be condensed to 3-point agenda. His position caught the government of the day off guard. If the government had thought it made a mistake then with its Sanusi choice, it didnâ€™t show it.
Two and a half months after Sanusi assumed office, he took the most extra-ordinary decision the countryâ€™s financial sector has ever witnessed. He sacked five chief executives of banks, namely, Sebastin Adigwe (Afribank), Okey Nwosu (Finbank), Erastus Akingbola (defunct Intercontinental Bank plc.), Mrs. Cecilia Ibru (defunct Oceanic Bank Plc) and Bath Ebong (Union Bank of Nigeria Plc.), in one fell swoop on allegations of financial recklessness, mismanagement, corruption and a high level of non-performing loans in their portfolio which were attributed to poor corporate governance, lax credit administrative processes and absence or non-adherence to the bank credit risk management procedures. This, according to Sanusi, had posed a systemic treat to depositorsâ€™ money. It was a sunami never before seen in Nigeria. He seized the banks and appointed new helmsmen to run the affairs of the banks.
Sanusi did not stop there. He followed through by arraigning most of the sacked CEOs and executive directors in court. He deployed the full powers of his office, aided by the security agencies to ensure that the banks bosses were arraigned in court to face justice for their alleged crimes. He was applauded and hailed as a reformer by very many people. However there were those, such as Prof. Pat Utomi who warned that Sanusi was more of a danger to the system than those he was accusing financial recklessness. Today, perhaps Utomi has been proved right going by the report of the Financial Reporting Council of Nigeria which listed a litany of infractions.
Not done, Sanusi moved on to finish off three other bank directors: Francis Atuche (Bank PHB Plc), Okey Nwosu (FinBank Plc) and Charles Ojo Ehaholo (Spring bank Plc). Last year, he â€˜movedâ€™ over to the NNPC, alleging that $49.8billion could not be accounted for. Same Sanusi would later reverse himself, saying that $12billion, was missing and was immediately corrected and accepted $10.8 billion. But the canaries in Sanusi were not done. He came back again to say it was $20billion. It got to a point when financial analysts were asking which figure would be believed.While there are those who have been saying Sanusi was suspended because revelations about NNPC.
Five years down the line, Sanusi is facing similar allegations he leveled against the bank CEOs he fired. It is a strange irony that the man who has come to be known as the â€˜â€˜activistâ€™â€™ CBN governor is being accused of mind boggling accusations of financial recklessness, failure to adhere to due process, spending without appropriation, failure to adhere to Public Procurement Act in the running of CBN.
The corruption and looting unearthed in CBN in the Financial Reporting Councilâ€™s report which indicts Sanusiâ€™s running of the CBN are too damning. It is frighteningly similar to the Joint Stress Test undertaken by CBN and Nigeria Deposit Insurance Corporation, NDDC, of the banks which Sanusi used as a basis to sack the five bank CEOs in its significance. The stand he held others to accountable donâ€™t seems to apply to him in the management of public funds. Otherwise how can one explain the spending binge under Sanusi Lamido Sanusi?.
Pertinent questions must now be asked concerning financial management on the part of the Kano Prince; going by the fact that he himself seems to have superintended large scale malfeasance, same offence he sent some bank chiefs to jail for. Is the CBN an autonomous organ of government whose financial dealings are not subject to public scrutiny? Is there a special vote for the CBN governor for donations? Is the Public Procurement Act not binding on the CBN governor?
The Financial Reporting Council of Nigeria report on Sanusi was damning. Take these:
(A) The unacceptable level of financial recklessness displayed by the leadership of the Central Bank of Nigeria is typified by the execution of â€˜Intervention Projectsâ€™ across the country. From available information, the bank has either executed or is currently executing about 63 such projects across the country and has committed over N163billion on them.
(B) 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 CBNâ€™s statutory mandate. It is trite that the expenditure of public funds by any organ of government must be based on clear legal mandates, prudent costing and overriding national interest.
That was not all, the report stated that the CBN, in a most ironical manner, has not been able to prepare its financial statements using applicable International Financial Reporting Standards (IFFS) yet, Deposit Money Banks (commercial and micro-finance banks) which Sanusi has been breathing down their necks have complied with this national requirement since 2012.
The report believed that this was capable of sending wrong signals to the international community; especially, investors and financial experts who might have developed interest in the Nigerian economy. But that was not even where Sanusiâ€™s strange corporate governance style ended.
For instance, the Memorandum of Understanding (MOU) signed by the CBN and other Deposit Money Banks on Banking Resolution Sinking Fund has been followed in abeyance. For instance, a Board of Trustees (BOT) to manage the Fund has not been constituted since 2010 when it was established. The CBN has nonetheless continued to utilise same Fund for certain operations without approval of the said BOT. The question is where are checks and balances in this situation?
In the same vein, Sanusi authorized the acquisition 7% shares of International Islamic Management Corporation of Malaysia to the tune of N0.743 billion. This transaction was neither brought to Mr. Presidentâ€™s attention nor the board contrary to section 34 (b) of the CBN Act 2007. Yet same transaction was against the letters of the law that set up the CBN; which state that the CBN shall not, except as provided in Section 31 of the Act, inter alia, purchase the shares of any corporation of company, unless an entity set up by the approval or authority of the Federal Government.
In 2012, the CBN brought forward General Reserve Fund to the tune of N16.031billion but rather than return it to treasury, decided to make some strange increment on spending on some heads and sub-heads. N3.06billion was spent on â€œpromotional activitiesâ€ yet only N1.084billion was spent on same head in 2011. In 2011, the CBN spent N20.202billion on â€œLegal and Professional Feesâ€ while on â€œlunch for policeâ€ and â€œprivate guardsâ€, the CBN spent N1.257billion in 2011.
Sanusiâ€™s CBN was not done. It claimed that it paid Air Charter, such as to Emirate Airline (N0.511bn), Wing Airline (N0.425bn) and Associated Airline (N1.025bn) to distribute currency by air nationwide. Emirate Airline does not fly local charter in Nigeria, Wing Airline is not registered with Nigeria Civil Aviation Authority and Associated Airline does not have a billion turnover for 2011 because upon enquiry, the management claimed that they have no financial statements and have not had any significant operations for the past two years that will warrant preparation of financial statements.
The report also indicated that â€œCurrency Issue Expensesâ€ of N1.158bn and Sundry Currency charges of N1.678bn under â€œCurrency Issue Expenses.â€ As they are in 2011 so are similar expenses in 2012. There were other questionable expenses like . Training and travel expenses N9.24bn in 2012 up from N7.65bn in 2011; expenses on â€œATM offsite policy changeâ€ came to N1.045bn and expenses on â€œNon Interest Bankingâ€ N1.359bn in 2012 up from N0.977bn in 2011. On newspapers, books and periodicals, which did not include CBN periodicals, the apex bank under Sanusi spent N1.678 billion in 2012 up from N1.670bn in 2011.
From this report, even a novice in financial management will surely ask the suspended CBN governor some questions as to how these bogus figures were disbursed. For instance, if an organ of government without presence in all states of the federation could spend about N1.6 billion on books and newspapers, it means the CBN was spending close to N4.4million per day on books and periodicals.
In the days and weeks ahead, perhaps the suspended CBN chief would have to account for his actions while he was holding sway at the apex bank. The figures spent on sundry expenses are such that will make some African countries green with envy. If Nigeriaâ€™s CBN governor could spend over N1.2billion to maintain private guards and buy lunch for policemen in one year, one would wonder how much is needed to maintain the entire armed forces of The Gambia.