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Wednesday, 26 February 2014

On the Removal of Sanusi Lamido Sanusi as the Central Bank of Nigeria Governor

                                             Former CBN Governor: Sanusi Lamido Sanusi

                                           President of Nigeria: Goodluck Jonathan

On Thursday the 20th of February 2014, Nigerians woke up to the unexpected news that the President had decided to “suspend” the Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi (SLS), for “various acts of financial recklessness”. The Financial Council of Nigeria (FRC) had reportedly uncovered various cases of financial impropriety within the Apex Bank's 2012 financial statement.

The fact that the suspension order comes after SLS’ shock revelation that billions from oil sales could not be accounted for continues to fuel suspicions as to the President's real motives in removing the CBN Governor. SLS had recently alleged that the nation’s state oil company, the Nigerian National Petroleum Corporation (NNPC), could not account for the entirety of what it realized from the sale of oil for the periods January 2012 – July 2013; and that the ‘missing’ sum could amount to as much as $20 billion. Many have therefore linked the removal/“suspension” of the CBN governor to his role in bringing the issue of the ‘missing’ billions to the public domain. And many have similarly drawn the conclusion that the removal of SLS on grounds of financial mismanagement is merely dust thrown to blind Nigerians while the President and the NNPC get busy burying the $20 billion issue. 

Before I deal with the politics behind SLS’ removal, let me first deal with the legality of the President’s decision.

Legality of the decision

The President, in his recent ‘media chat’, insisted that SLS remains Governor of the CBN. He stated that SLS was only suspended, not sacked, pending a conclusive investigation into the finances of the CBN. The President also insisted that it was within his constitutional powers to suspend the CBN Governor.

First of all, regardless of the use of the term suspended, SLS was sacked – no two ways about it! The use of the term suspended rather than sacked was simply a tactical ploy to overcome the legal barrier the President would have faced in out-rightly dismissing the CBN Governor.

Given the pivotal role the CBN plays in stabilising the national economy, the power to dismiss its Governor before the end of his tenure is shared between the executive (Presidency) and the legislature (Parliament). This constitutional provision ensures that the Governor is insulated from political pressure, and guarantees the CBN a measure of institutional independence.


According to Section 11(2f) of the CBN act of 2007, for a President to dismiss the CBN governor, that decision must be supported by a 2/3 majority of the senate. Same goes for the section which deals with removal on grounds of “serious misconduct” - section 11(2c). In fact, 2c not only also stipulates the same 2/3 senatorial majority support; it also further states that the CBN Governor must have been found guilty of any charge levelled against him - a provision obviously meant to avoid removal on grounds of spurious allegations. Interestingly, nowhere in section 11 (2 a – f), the relevant sub-sections which lay out the criteria for the dismissal of a sitting Governor, is it mentioned that the President has the power to suspend. The provisions of the law are therefore crystal clear, should the President feel the need to remove any CBN Governor, his decision must be supported by a substantial majority of the senate. And in the case of 2c, the CBN Governor must have been found guilty in a court of law before dismissal. None of the above criteria – senatorial support or guilt in a court of law – were sought prior to the President’s removal of SLS from office.

It is clear to me therefore that from a strictly legal perspective, the removal of the CBN governor was illegal. And the use of the term suspension was merely a tactical manoeuvre to achieve a political goal: the removal of SLS. Anticipating that it may be difficult to secure the senatorial support needed to remove SLS through outright dismissal, the President opted for the administrative option of suspension to achieve the same outcome.

How then are we to fully assess the manner and timing of Goodluck Jonathan’s decision to dismiss SLS? To answer that question, we must beam our searchlights on the political nature of the dismissal.

3 observations highlighting the Political nature of the dismissal

Before we do this however, let me first flag up three observations which will better shed light on why I believe SLS’ “suspension” was an inherently political act.

My First observation/Question is: The FRC report upon which the President based his suspension of SLS was dated 7 June 2013. Why did he then wait for 8 months before he acted on the report? Given the serious nature of the allegations in the report – which border on gross financial mismanagement – one would have expected the President to have acted with speed in bringing the matter to the senate's knowledge. This is especially so given the fact that there has been no love lost between Goodluck Jonathan and SLS. The only answer to this conundrum, it seems to me, is that the allegations, as weighty as they are, are less than meets the eye when subjected to even the most cursory examination.

If we take for example one of the damaging allegations levelled against SLS – spending billions on “intervention projects”– we can perhaps begin to see how contrived the administration’s case is. The intervention projects refers to the donations the CBN Governor regularly does as part of his institution’s “corporate social responsibility” – donations such as the N10 billion ($61 million) given to a university in the north of the country in August 2013. The fact that there is no legal cap on how much can be donated/given to projects in any given year, and the fact that there are no set criteria for what projects the Bank can commit money to, certainly means that intervention project funds can be abused by any CBN Governor who may decide to donate purely based on his whims. The most contentious example under SLS has been the N100 million ($608 thousand) donated to bomb blast victims in Kano in February 2012 – which many criticised him for (and deservedly so in my mind), as the donation seemed politically motivated.

Many saw the Kano donation as inappropriate and concluded that SLS made it because he was from Kano and his reputation in his home state had plummeted due to his support for the aborted removal of fuel subsidy the month before. Many consequently saw his N100 million “intervention” after the February bomb blast as an attempt to repair his battered image in his home state.

While there are broader questions that should be asked regarding the nature and quality of the "interventions", the fact remains that SLS' use of the intervention funds, in the manner that he did, is currently not illegal or in breach of the CBN act. From what is currently in the public domain, the interventions followed the due process of the Bank. They were approved by the Bank’s executive board, information regarding the projects to which the Bank has committed funds to are publicly available (a fact even acknowledged by his suspension letter in charge 7a), and past CBN Governors have made similar controversial “gesture” interventions – gesture in the sense that the donations seemed geared towards boosting the profile of the Governor. Amidst the noise, it is important to note that so far the Presidency has produced no evidence to show that what SLS spent by way of  "interventions" was not authorized by the Bank's board, nor has there been evidence shown that there was a breach of a specific law in making any of the interventions.

This is not an attempt to completely exonerate the former CBN Governor; he may indeed have questions to answer, and what we have seen so far may not be the full extent of the allegations against him. Rather, this is a call to the government to provide substantive evidence for the serious allegations made and take the matter to court if Nigerians are to believe this is anything other than a political suspension. My guess is, with the political objective of SLS' removal achieved, if he agrees to play by the 'rules' and quietly settles into retirement, then the “investigations” against him will slowly wind down. This is political justice Nigerian style!

My second observation is: If SLS was removed based solely on the contents of the FRC report, then why wasn't the Bank’s entire executive board also cleared out – given their role in overseeing and managing the activities of the Bank? Why weren't the four deputy governors also suspended given the gravity of the financial misdemeanors that were said to have been committed, and given the fact that they are also members of the executive board? It seems all the more strange that after SLS was suspended, Sara Alade, one of the four Deputy Governors was made Acting Governor. If he was removed so as not to obstruct the course of justice while the investigations are carried out, surely the same principle should apply to her – given the fact that she was both a Deputy Governor and an executive board member of the Bank while the “financial recklessness” was taking place. This is not an argument aimed at the person of Sara Alade, but rather to emphasise the fact that SLS was a political target: He had to go, and the allegations where orchestrated around facilitating that removal!

My third observation is that: Most Nigerians would agree that the charge of “financial recklessness” fits no other government institution better than it does both the NNPC and the Ministry of Petroleum resources – the former frequently used as a slush fund for unbudgeted government expenses, and the latter led by the President’s close ally. The numerous committee reports submitted to the President during the fuel subsidy saga (which to date haven’t been acted upon) amply attest to the fact that the above mentioned institutions are agencies of monumental corruption and sleaze. The NNPC for example, which the Ministry of Petroleum oversees, has reportedly not had its accounts audited since 2005. And currently, another scandal is steadily unfolding around Kerosene subsidy as more details emerge from the parliamentary committee probing that subsidy. From the committee we are now learning that the NNPC is reportedly disbursing N700 million ($4.3 million) daily to subsidize kerosene without those astonishing figures being budgeted for, despite a presidential directive in 2009 stopping kerosene subsidy. If these aren’t grounds for an FRC report, then it lays bare the political nature of SLS’ removal.

Again I do not wish to hold brief for SLS, but merely to raise questions regarding the manner and timing of his removal. Though there are many other observations and questions I could raise which similarly highlight the political nature of the dismissal, I will leave it at the above three so as not to belabour the point. Let me now turn to the politics behind the decision to suspend SLS.

The Politics of the suspension

While SLS’ “leaked” letter, and then subsequent vocal insistence, that billions are missing from the nation’s coffers seems to have been the immediate trigger for his removal. The dramatic change that is taking place in the country’s political landscape, and the approaching 2015 Presidential election, provides the broader context within which to situate the suspension order.

2013 saw for the first time since the return of democracy in 1999 the emergence of an opposition party, the All Progressives Congress (APC), capable of challenging the ruling party, the People’s Democratic Party (PDP), for political dominance. That year also saw the steady erosion of Presidential power as some State Governors openly challenged the President: such as the Governors forum election debacle where, despite strong Presidential support, the ‘chosen’ candidate failed to win; and in Rivers State where a long running crisis was precipitated by botched attempts to unseat Amaechi, a PDP (now APC) Governor whose rebelliousness was galvanizing the President's opponents.

The President’s demeanour and public pronouncements, which often betrays a sense helplessness in the face of crisis, also created the image of a weak and timid President unable to impose his will on a volatile polity. Moving against SLS in the manner that he did therefore should also be seen as an attempt to reassert his presidential power.

We should remember that Nigeria is just about to enter the peak of its election season. And politicians – both incumbents and aspirants – are positioning themselves for the coming contest in 2015. And we should also remember that the average Nigerian politician is guided by an unprincipled "mercenary" mentality, and therefore typically aligns himself with the most powerful force in the political arena. Once a person’s political power is seen to be on the wane, his support base slowly evaporates. To put it bluntly: In Nigerian politics, power bends to greater power!

A prime example of this mercenary mentality was the rapid expansion of the APC's power base. The defection of seven state Governors to the APC, and the general sense that the President was unable to take control of the turmoil within his party, led to a sudden loss in the PDP's political attractiveness. Inevitably this caused a cascade effect as other PDP politicians lower down the food chain, sensing which way the wind was blowing, switched sides. Hard-line “conservatives” like Senator Ahmed Sani Yerima suddenly became “progressives” overnight. With the PDP now having stabilised somewhat, the avalanche of defections has stopped; some former members have returned, and some APC members have defected to the PDP.

From this perspective, the President's dismissal of SLS was a demonstration of power, and a signal to the fickle political class that he still retains the capacity to make and break political careers. The removal was also a political message aimed squarely at members of his government: Step out of line and face the consequences!

Understanding the removal order as the act of a political man 

Beyond broadening the analytical horizon to take into account the wider changes in the political landscape, we must also look to the nature of the President himself. To fully understand Goodluck Jonathan’s decision making process, we must first recognize that he, like most members of Nigeria's elite class, is not a statesman, but a political man. The statesman thinks and acts strategically; and views crises as an opportunity to demonstrate his greatness. The political man, however, thinks and acts tactically; and views crises as a conspiracy to erode his power. While the statesman practices a "politics of grandeur"; and is animated by a long term political vision. The political man, in contrast, is blinded by the grandeur of power; and thinks only of the short term possession of it.

A concrete example of the above analysis in regards to Goodluck Jonathan would be the Channels T.V. documentary  aired in January this year which showed shocking images of dilapidation and decay in the nation’s main police training college. Rather than confront what was a glaring case of corruption and mismanagement. Rather than view that scandal as an opportunity to recreate his image in the mold of a statesman. Unfortunately, the mental chain which shackles Goodluck Jonathan to the political world was too strong. And he could only muster this uninspiring response to the documentary: “This is a calculated attempt to damage the image of this government. The Police College, Ikeja, is not the only training institution in Nigeria”.

Though the training college has now been refurbished, no attempt has been made to punish those who, over the decades, stole the monies that were meant for its maintenance. And no institutional safeguards have been put in place to ensure such levels of grand theft of public funds in this specific case doesn't repeat itself. In other words: Because deep reforms typically requires risking political power, the President did the barest minimum to insulate himself from public anger. He feared that to allow such a scandal to fester might provide a resurgent opposition with an issue to capitalize on and erode his power – and thereby dent his chances of winning the 2015 election.

Therefore, to understand the underlying dynamics which drive Goodluck Jonathan's decision making process on any given issue – including the removal of SLS – we must understand one thing, and one thing alone. As a political man, Goodluck Jonathan's behaviour is guided by his short term goal: preserving his power. The need to acquire, preserve and display that power is what governs his instincts, and determines his political actions.