CBN:We are all losers,By Issa Aremu

Aremu2013‘Central Bankers Read Election Returns, Not Balance Sheets’ – Robert Z. Aliber

Given that the suspension of Sanusi Lamido Sanusi as the Central Bank of Nigeria has become a subject of litigation, the intervention of yours truly is purely academic.With mixed reactions in torrent and scores of hate/love arguments for and against the sudden removal of the governor of the CBN, we are undoubtedly all losers as Nigerians. For an increasingly divisive nation, Sanusi’s removal has proved another polarising factor too frequent. Coming on the heel of partisan posturing for 2015, it is not surprising that the suspension has also become a handy partisan issue with objectivity in deficit and subjectivity in huge surplus. Predictably the ruling party (PDP) national publicity secretary, Chief Olisa Metuh backed the suspension, claiming “the issues leading to Sanusi’s suspension strictly bordered on the
management of the nation’s economy.” Expectedly All Progressives Congress (APC) accused the presidency of “seeking to use the suspension of ex-Governor of the Central Bank of Nigeria (CBN), Malam Lamido Sanusi Lamido, to divert attention from the allegation of the missing 20 billion dollars oil funds”. With these serial partisan diatribe, discussing Sanusi’s suspension tasks objectivity and even imagination. It is obviously academic and even a luxury at this interesting times to be concerned about the bigger picture of the far reaching implications of the suspension for the banking industry in particular and the economy as a whole. Historic facts might however prove useful in the search for objectivity.

President Umaru Musa Yar’Adua nominated Sanusi as the Governor of the Central Bank of Nigeria on 1 June 2009. His appointment was confirmed by the Senate on 3 June 2009 in a record time. President Goodluck Ebele Jonathan on Thursday, 20th February 2014 suspended him from office few months to the end of an eventful, albeit controversial single 5 year term he had prefered. Of course the point cannot be overstated that the first and notable loser is Mallam Sanusi Lamido Sanusi himself.

As a labour market student, it’s of profound academic interest of how a process driven easy entry (with appointment and senate confirmation) of a chief central banker was inversely related to his suspension/ exit without recourse to the same process that brought him to office. So much for the provision of the CBN Act! Sanusi’s ordeal brings to memory the predicament of Bernard Longe, former MD of the First Bank of Nigeria Plc (FBN) who was summarily terminated by the board of directors as the managing for allegedly negligently granting an unauthorized facility to Investors International (London) Limited for the acquisition of shares in NITEL, which resulted in losses for FBN in April 22 2002. In March 2010 the Supreme Court of Nigeria issued a landmark judgment in favour of plaintiff Bernard
Longe upturning the suspension of Longe. Is history repeating itself? Certainly Longe got a judgment but it is still debatable if he got the justice since he did not return to his job. Will Sanusi get justice or judgment in the court of law is one question begging for an answer. One thing is however clear; we are in the final analysis workers who are deserving of decent works, well paid for, secured with easy entry and exit. International Labour Organization (ILO) has shown over the years that millions of workers world wide live on precarious works, that are poorly remunerated. They get fired and hired at the behest of employers. The recent casualization of the CBN’ s governor has certainly made another case for decent protected work for the driver, a messenger no less for a CBN governor or even a President. An injury to one is an injury to all.

President Goodluck Jonathan may very not be a visible loser in this avoidable labour market crisis, but certainly he is not a celebrated winner either. The President legitimately claimed absolute power to hire and fire. That in itself begs the question. Absolutism needs no interrogation no less an explanation. In a democracy everything is relative, President’s enormous powers inclusive. The 6th presidential media chat promised further search light on the governance efforts of President Goodluck. What with the issues of budget 2014, electricity supply, road construction among other critical governance issues? Regrettably the media chat was undermined by a singular suspension that requires endless justification. Watching the President almost agonizing on Sanusi Lamido Sanusi shows the suspension was far from being an easy presidential option. Indeed it was refreshing that the President
leaves a window of reconcilliation when the he said Sanusi still remained the Governor of the Central Bank of Nigeria pending investigation of the alleged abuse of office. If we must all be winners we must return to the big picture of institution building, the economy and nation building.

Countries preoccupied with the issues in development use their Central Banks to keep the economy on course through activist macro economics with respect to pricing, (inflation), exchange rates, interest rates, capacity utilization, employment, debt management, development financing etc.

Whatever the hidden issues against Sanusi are, his tenure witnessed open activist central banking the fall outs that must also be credited to President Jonathan administration. Indeed with respect to the core mandate of the CBN, both the suspended Governor and President Jonathan are winners. CBN balled out ” Afribank, Intercontinental Bank, Union Bank, Oceanic Bank and Finbank averting their collapse. Much credit go to Yar adua/ Jonathan presidency for maintaining institutional autonomy of the CBN which made Sanusi to deliver on his primary mandate as a central banker. Both President Jonathan and Sanusi must be credited with stable inflation and exchange rate figures in recent years. Of course double
digit interest rate remains unacceptably too high, (no value adding manufacturer can borrow at the scandalous interest rate of 23 per cent!). The relative autonomy of the central bank has made the stability of the monetary policies possible. The major loss to Nigeria in this crisis is therefore institution building.

The emerging picture is that of two strong men, namely President Jonathan and suspended Governor Sanusi. But what happens to institution and nation building?

On the heel of his appointment as the CBN governor I did a reflection entitled “LAMIDO SANUSI: PLAYER TURNED REFREE” ( JUNE 8, 2009). I had notified the new governor relying on the received wisdom of Robert Z. Aliber that ; ‘Central Bankers Read Election Returns, Not Balance Sheets’ .

Central banking worldwide has been likened to a good (economic) driver, which must keep an eye on the road and maintain steady hands on the wheel for a good (economic) ride. Towards the end of his tenure, Sanusi was eager to read more balance sheets with all the controversies trailing the missing billions from NNPC’s unremiited sums. Devil is in the details. But it is instructive that, Sanusi has come to agree that the better to read less of balance sheet. In a pre-suspension interview with metropole margazine, he accepts as much that; ‘., in a sense, in terms of managing communications that’s what our problem was and the way to have done that would have been maybe use channels other than public lectures, public statements, and public interviews to make some of the points that I have made. If there is anything I think I could have done better, it is really in the area of communication. Also, I
think not being politically sensitive was a problem. I am not saying the CBN governor should be a politician. But just understanding the politics of communication in Abuja was something maybe I could have done better.”

Issa Aremu mni

No tags for this post.