The Deputy Governor, Operations of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has said the suspended Governor of the CBN, Mallam Sanusi Lamido Sanusi overstepped his authority in his running battle with the presidency over the unremitted oil funds by the Nigeria National Petroleum Corporation (NNPC) and his response to the query from the Financial Reporting Council of Nigeria (FRC) on the 2012 audited accounts of the central bank. His remarks on Sanusi coincided with the decision by the Senate to commence the screening of the CBN Governor-designate and Managing Director/CEO of Zenith Bank Plc, Mr. Godwin Emefiele, and the Deputy Governor-designate and Executive Director with First Bank of Nigeria Limited, Mr. Adelabu Adekoya, tomorrow, as well as the amendment to the CBN Act.
Dr. Kingsley Moghalu
Moghalu, who spoke Monday on the sidelines of the Africa CEO Forum in Geneva, Switzerland, told the UK-based Independent newspaper that Sanusi overstepped his authority.
“The lesson that can be drawn from it is the limit of the central bank’s independence… There is a very thin line between the central bank’s independence and… political posturing,” Moghalu said.
In apparent support of government’s action, he said: “The president of Nigeria and the government of Nigeria have never in my knowledge interfered with the functions of the central bank. And therefore I think we need to give them credit for respecting (its) independence.” He continued: “The governor began to make very damaging public allegations against the government… allegations that have not been proven, after the president had sent him a presidential query about the finances of the central bank.
“The government has given a reason for the suspension and that was… to enable an investigation into the allegations against him.” Though not mentioning Sanusi by name, he said somebody at the central bank took on an activist role. “Somebody in the central bank was taking on an activist political role. That is not our function. Central banks all over the world have clear functions and in your country (Britain) and any other civilised countries, I know that central bank governors operate within certain expectations and constraints and respect those expectations and constraints,” he said.
The unremitted funds saga and the eventual suspension of the governor indeed created anxiety and alarmed investors initially, especially the “financial recklessness and misconduct” allegations levelled against the suspended governor. Moghalu added that the central bank had managed to contain the market fallout from the suspension of Sanusi, pointing out that he and his fellow deputy governors were in agreement with the suspended governor’s internationally well regarded position as an inflation hawk in favour of high interest rates to keep a lid on prices. “Life is back to normal,” he claimed.
On reports that the FRC had indicted all the deputy governors alongside Sanusi, he vehemently denied being under investigation himself, or being accused of any wrongdoing by the report, saying he had no plans to resign from the CBN.
Sanusi at the weekend had responded to the allegations levelled against him by the FRC, which were cited as reasons for his suspension from office as governor on February 19. In the response, he had also requested President Goodluck Jonathan to reverse his suspension, saying every one of the allegations levelled against him and the central bank under his leadership was false. Moghalu’s position, according to observers, may make the return of the suspended governor difficult, since senior officers of the central bank have started distancing themselves from him. It was however learnt that the president has no intention of replying to Sanusi’s response to the FRC’s query. Instead, a presidency source said Sanusi’s response had been sent to FRC which will review and verify his response.
In this respect, FRC investigators have stormed the CBN to commence investigations. Nonetheless, as Sanusi awaits a reply from the presidency, the Senate has slated the commencement of the screening of Emefiele and Adekola for tomorrow. According to the notice on its Order Paper for the week, the Senate will consider the “request of Mr. President, Commander-Chief…in accordance with Section 81(1) and (2) of the Central Bank of Nigeria (CBN) Act 2007”. If supported by a majority of Senate members, the nominees will be referred to the Senate Committee on Banking for screening, after which the committee will make recommendations for their confirmation or rejection.
In the same vein, following perceived abuse of office by Sanusi, the Senate yesterday began moves to amend the CBN Act. Tagged Central Bank of Nigeria (CBN) Act Cap C4 LFN 2011 (Amendment) Bill 2014 (SB. 460), and sponsored by Chairman, Senate Committee on Rules and Business, Senator Ita Enang, the bill passed through the first reading on the floor of the Senate yesterday. Specifically, the bill seeks to provide for the “checks and balance in the general administration of the affairs and business of the Bank and for matters connected thereto”. A skeletal explanation given on the bill states that the CBN Act, after amendment, will “provide for the appointment of a chairman for the bank other than the governor and for checks and balance in the general administration”.
Against this background, amendments are being proposed to Section 6 (1,2) and Section 7(1) of the CBN Act. If the amendments sail through, the Act will strip the CBN governor of powers to preside over the board of CBN and simultaneously provide for the appointment of the chairman of the board by the president, subject to Senate confirmation. It is believed that the amendment is aimed at curtailing the enormous powers conferred on CBN governor and which was believed to have given Sanusi a larger-than-life presence. The amendment will also whittle down the autonomy of the central bank, as the CBN governor will thereafter only be in charge of the general administration and business of the bank, and will therefore be duty bound to report to the board chairman.
Section 6(1) in the amendment bill states: “There shall be for the Bank a board of directors (in this Act referred to as ‘the board’), which shall be responsible for the policies of the bank.” On the other hand, Section 6(2) of the amendment bill stipulates that the Board shall consist of: “(a) the chairman who shall be appointed by the president subject to confirmation by the Senate and shall be a person of proven integrity, credited with expertise in financial regulation; (b) A governor.” Also, Section 7 (1) of the amendment bill states that the “governor or in his absence, one of the deputy governors nominated by him, shall be in charge of the general administration of the affairs and business of the bank and shall be answerable to the board for acts and decisions”.
If the amendment bill is passed, Sanusi would be the last CBN governor who operated under full autonomy, as subsequent governors of the central bank will be answerable to the chairman of the CBN board.
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