Lamido Sanusi has been removed from his post a day after he gave evidence against NNPC’s failure to pay $20bn in oil revenues
The governor of the Central Bank of Nigeria (CBN), Lamido Sanusi, has had his tenure cut short by Nigerian President Goodluck Jonathan in what many believe to be a politically motivated attack. Sanusi has been a vocal critic of the Nigerian government’s failure to uphold best corporate governance practice, and his removal here coincides with his presenting evidence to parliament concerning Nigeria National Petroleum Corporation’s (NNPC) failure to pay $20bn in oil revenues.
Sanusi, who was due to stand down in June, alleged the day before his suspension that Nigeria was losing as much as $1bn a month
Sanusi, who was due to stand down in June, alleged the day before his suspension that Nigeria was losing as much as $1bn a month, owing in part to rampant and repeated instances of fraud amongst some of the country’s leading oil parties. The losses have impacted on the central bank’s ability to prop up the ailing naira as well as protect currency reserves, issues which led Sanusi to question where exactly the losses are stemming from.
The former governor recently told a senate committee that of the $67bn of oil sold through January 2012 to July 2013, $20bn was largely unaccounted for. Sanusi then proceeded to draw attention to a $8.5 gap in accounting pertaining to unpaid government subsidies and a further $6bn that he claims was paid to private parties and still lies unreported to this day.
Sanusi is accredited with having boosted the country’s banking sector since his appointment in 2009. Nonetheless, a statement issued by Reuben Abati, Special Advisor to the president, read that his tenure was characterised by “various acts of financial recklessness and misconduct 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”.
The news of Sanusi’s removal is especially unwelcome considering Nigeria’s poor reputation with regards to corporate governance. According to Transparency International, Nigeria ranks 144 of 177 countries in the Corruption Perceptions Index, owing to a long history of corruption.
Compounding problems, the country also plays host to a new centralised corporate governance code, which was introduced as recently as the beginning of 2014. However, it would appear that its mechanisms have fallen short of a solution in this instance.
The circumstances of Sanusi’s removal have served to reaffirm Nigeria’s shortcomings in terms of corporate governance, although a more immediate concern is that with regards to how markets will react now that the widely respected Sanusi has been ousted. The former governor has been highly influential in the prosecution of individuals tied up in fraud in recent years, and without him at the helm, fears of corruption will no doubt gather momentum.