THE VERDICT By OLUSEGUN ADENIYI; olusegun.adeniyi@thisdaylive.com
Question: Who is the Governor of the Central Bank of
Nigeria? Options: (A) Sarah Alade; (B) Sanusi Lamido Sanusi; (C) Godwin
Emefiele (D) Jim Osayande Obazee; (E) None of the above. Please shade
the correct answer.
The above is an examination question recently encountered by a friend
but please don’t ask me for his name. He said he could not pick “A”
because Mrs Alade, the acting CBN Governor in a period of transition,
wields little or no authority. He said he could not pick “B” either
because, even though President Goodluck Jonathan recently affirmed that
Sanusi remains the CBN Governor, he is still on suspension. My friend
said he also could not pick “C” because even though Emefiele’s
appointment was confirmed by the Senate yesterday, he would still have
to wait for Sanusi’s tenure to expire before assuming office. For some
minutes, according to my friend, he toyed with the idea of picking “D”
because, as he explained, the Executive Secretary of the Financial
Reporting Council of Nigeria (FRCN) is the man who has been calling all
the shots at the CBN in recent weeks. But then he demurred because he
could not lay his hands on where Obazee derives his powers from. So at
the end, he settled for “E” which means that today, for all practical
purposes, Nigeria’s apex bank is without a substantive Governor!
Given the foregoing, it came as no surprise that Standard and Poor's
(S&P), one of those international financial agencies whose ratings
the managers of our economy like to flaunt, has put a question mark on
Nigeria’s “stable outlook” rating, citing dearth of new information on
the country and the uncertainty surrounding monetary policies. While
stating that the suspension of the CBN Governor amounted to government
interference with monetary policies, S&P said it was placing the
country on a credit watch for a period of one week as a result of the
appeal by the federal government. “As a result, we are placing our
long-term sovereign credit ratings on Nigeria on Credit Watch with
negative implications,” S&P stated rather ominously.
Before I proceed, it bears repeating that I have made my position very
clear about Sanusi’s gross act of insubordination to President Jonathan,
especially considering the reckless manner in which he went about
touting some CBN laws which he believes make him untouchable (
Sarki Goma, Zamani Goma…).
As a student of power politics, I am aware, as British philosopher,
John Locke, argued in “The Second Treatise of Government: And, A Letter
Concerning Toleration”, that the people sometimes allow “their rulers to
do several things of their own free choice, where the law is
silent...and their acquiescing in it when so done." Whatever the law
cannot provide for, according to Locke, “must necessarily be left to the
discretion of him that has the executive power in his hands, to be
ordered by him as the public good and advantage shall require...”
Even though I am not a lawyer, to the extent that the CBN Act is silent
on suspension, I believe that Sanusi was not well advised to have taken
on the presidency in the manner he did. But that is just the opinion of
the layman that I am. Notwithstanding my position, I am also worried
that some people may unwittingly be destroying a critical institution
like the CBN in the attempt to get back at one man who, whatever may be
the misgivings about his style, did very well in office.
Against the background that Sanusi became CBN Governor in the middle of
a global financial crisis in 2009, his intervention (by removing some
bank chief executives who were dancing “Skelewu” with depositors’ funds)
helped to restore sanity in the system. It is also on record that under
Sanusi’s watch, inflation has been kept below 10 per cent while until
recently, there was a measure of stability in the foreign exchange
market. The CBN also implemented policies aimed at reducing the
excessive use of cash in the system to ensure safety, improve efficiency
and curb money laundering.
So, all factors considered, Sanusi has been a good CBN Governor and I
refuse to be taken in by the noise emanating from those who fiddled with
depositors’ money for which they were entrusted and paid dearly for it.
In any case, it is not lost on fair-minded Nigerians that in this
obsession to nail Sanusi, the “witnesses” being lined up are some former
bank chiefs who abused their trust and were punished by the CBN. Yet it
is a serious indictment on our country that the same fat cats who are
being tried by the state for economic and financial crimes are also
being aided by the same state, in the bid to settle score with the
suspended CBN Governor. It is not right.
While I am aware that politics trumps everything in Nigeria today,
those who are circumspect should be worried that the head of a small
government parastatal under the Ministry of Trade and Investment should
have the powers to be conducting a public investigation into the
operations of the CBN with all the attendant publicity. Aside the
professional breach (audit investigation is never conducted on the pages
of newspapers), there is also the issue of a not-so-subtle executive
interference into what are clearly operational issues at the apex bank.
For those of us who can see beyond the person of Sanusi, that is very
troubling and such details are also not lost on S&P and other
international credit rating agencies.
Because most Nigerians still wonder how this little-known FRCN crept
into our consciousness, a brief story may be necessary here. It started
with the Nigerian Accounting Standards Board (NASB), a private sector
initiative established in 1982 in collaboration with the Institute of
Chartered Accountants of Nigeria (ICAN). Ten years later in 1992, the
General Ibrahim Babangida administration by military fiat converted the
NASB into a government parastatal under the Federal Ministry of
Commerce. In 2003, the NASB Act was passed with the primary functions to
“develop, publish and update Statements of Accounting Standards to be
followed by companies when they prepare their financial statement, and
to promote and enforce compliance with the standards”.
Following a critical appraisal of the NASB by the International
Monetary Fund (IMF) in 2010, the then Executive Secretary, Mr Godson
Nnadi began a process for the establishment of a new body that would set
accounting and auditing standards in the country and would be
independent of both ICAN and ANAN. At about that same time, Nnadi was
appointed Finance and Economic Development commissioner in Enugu State
where he hails from. But his protégé and successor, Obazee (who joined
the organisation after graduation in the early nineties) saw to the
drafting and eventual passage of the Financial Reporting Council of
Nigeria (FRCN) Bill on May 18, 2011.
The law was gazetted on June 7, 2011 as “an Act to repeal the Nigerian
Accounting Standards Board Act, No. 22 of 2003 and enact the Financial
Reporting Council of Nigeria charged with the responsibility for, among
other things, developing and publishing accounting and financial
reporting standards to be observed in the preparation of the financial
statement of public entities in Nigeria; and for related matters.” Both
the chairman and the executive secretary are to be appointed by the
president.
Ironically, while Obazee was trying to get the bill passed in the
National Assembly, he got support and encouragement from Sanusi who
argued that such a law would help to attract foreign direct investment
into Nigeria and perhaps for that reason mobilised through the CBN and
the Bankers' Committee a whopping sum of N500 million for the
construction of its International Financial Reporting Standards (IFRS)
Academy. I still wonder how Sanusi came about his theory considering
that many countries, including the United States have refused to
subscribe to the IFRS, preferring instead the Generally Accepted
Accounting Principles (GAAP).
When the bill was finally signed into law by President Jonathan, Trade
and Investment Minister, Mr Olusegun Aganga, under whose purview the new
parastatal was domiciled said: "More meaningful and decision-enhancing
information can now be arrived at from financial statements issued in
Nigeria because accounting, actuarial, valuation and auditing standards,
used in the preparation of these statements, shall be issued and
regulated by this Financial Reporting Council. The FRC is a unified
independent regulatory body for accounting, auditing, actuarial,
valuation and corporate governance. As such, compliance monitoring in
these areas will hence be addressed from the platform of professionalism
and legislation.”
What the foregoing suggests is that the FRCN is not another Economic
and Financial Crimes Commission (EFCC) or Independent Corrupt Practices
Commission (ICPC), its main function is to standardize accounting
practice in Nigeria. To therefore read reports of Obazee “grilling”
Sanusi, Alade as well as the immediate past Deputy Governor, Operations
of the CBN, Mr. Tunde Lemo; Managing Director of the Bank of Industry
(BoI), Ms Evelyn Oputu; Deputy Governor, Operations, CBN, Dr. Kingsley
Moghalu and Deputy Governor, Corporate Services, CBN, Alhaji Suleiman
Barau is beyond ridiculous. Because the FRCN Executive Secretary is
arrogating to himself some powers that he does not have and even if he
has the authority of the president for his assignment, I don’t think he
is approaching it the right way.
Now, I have read all the provisions of the FRCN Act 2011 and its power
of investigation is derived from Section 62 which stipulates that “(1)
The Council may investigate or cause to be investigated
(a) Any complaint or dishonest practice, negligence, professional
misconduct, malpractice made against any professional; (b) any breach of
the Code of Conduct and Ethics by any registered professional; or (c)
any material irregularity notified to it”.
However, it is noteworthy that the section itself falls under Part V11
of the Act which is on “Review and Monitoring of Standards”, which then
implies that it is targeted at compliance with standards for accounting
practitioners. Even if we concede that the FRCN can investigate
statutory institutions, such powers reside in the Council and not the
Executive Secretary. And the Council, currently headed by Hajiya Ladi
Ibrahim, (now at the National Conference representing Kogi State) has a
long list of membership: Two representatives each of both ICAN and ANAN
as well as one representative of each of the following: Office of the
Accountant General of the Federation, Office of the Auditor General of
the Federation; CBN; Chartered Institute of Brokers; Chartered Institute
of Taxation; Corporate Affairs Commission; Federal Inland Revenue
Service; Federal Ministry of Commerce; Federal Ministry of Finance;
NACCIMA; NDIC; SEC; NAICOM; NSE; PENCOM and the National Institute of
Estate Surveyors and Valuers. The Executive Secretary who has become the
judge and the jury in the so-called CBN investigation is just one
member in this big Council!
Now, I must make my position very clear. I am for transparency and
accountability so to that extent, I do not subscribe to the position
that Sanusi or the CBN which he heads should be above the law. No, both
should be held to account. But such should be done within the ambit of
the law and with due regard to process. What worries me is that right
before our very eyes, we are watching a systematic destruction of
perhaps our strongest institution, the Central Bank of Nigeria, that has
been built over time, by a Johnny-just-come Federal Reporting Council
of Nigeria that has no track record. Audit investigation is not the same
thing as criminal investigation, and even at that, only a court of law
can pronounce anybody a criminal as Obazee’s FRCN seems to have done
with its report.
I have my issues with Sanusi who was disrespectful of the president and
attracted to himself too much needless media attention. Indeed, in a
moment of introspection in his recent interview with METROPOLE magazine
(http://bit.ly/1cPddTz), Sanusi admitted this much: “There was only one
thing that I had hoped at the beginning I would achieve which I believed
I have not achieved. And this saddens me a bit even though it is also
the circumstances. A central bank should, as much as possible, be out of
the front pages of newspapers. Apart from on monetary policy days when
you announce your rates, you should just work behind the scene.”
That should be a big lesson from which his successor must learn. In the
United States, a Fed Chairman (CBN Governor in Nigeria) once spent
hours in Congress fielding questions at the end of which one frustrated
lawmaker offered a sarcastic compliment: "You would make a very
excellent prisoner of war... you wouldn't tell the enemy a thing."
Sanusi as a prisoner of war would bring down the whole roof with his
mouth! However, that should not diminish his achievements in office.
I am not one of those people who subscribe to the conspiracy theory
that Sanusi was suspended because of his allegation that the Nigeria
National Petroleum Corporation (NNPC) failed to remit some billions of
Dollars into the Federation Account. However, it is also an open secret
that because of the mutual distrust between him and the president, the
FRCN report became rather handy. But the report itself reads more like
the judgment of a court against a criminal than an audit review of CBN
accounting process. That is why it lacks any modicum of credibility.
The elevation of the hitherto unknown FRCN into an inquisition whose
first outing is to hang Sanusi clearly reduces what ought to be a
serious concern for probity in high public places into a petty political
witch-hunt. Nigerians know about the EFCC and its awesome powers in
such matters. They also know the ICPC for what it was established to do.
But for the Federal Government to stage a kangaroo accounting
inquisition into Sanusi's alleged malfeasance, as it is doing, is to
further expose the nation's financial system to international ridicule.
The nature of witnesses being called and the status of CBN officials
being summoned in this laughable inquisition by perhaps the smallest of
the agencies under the Ministry of Trade and Investment make the matter
more injurious to the financial system. I believe that the Jonathan
administration needs to handle the Sanusi matter with a measure of
dexterity. Here is an administration that has repeatedly cited among its
'transformation' miracles some of the fiscal and monetary reforms that
Sanusi instituted in the nation's banking and financial system. It is
also on record that Sanusi put himself on the firing line of public
disaffection when the administration tried, without success, to remove
subsidy on PMS early in 2012. Now, because the CBN Governor mismanaged
the politics of his high office, the same administration is staging a
public hanging of its once favourite man.
In all these, what is forgotten is that Sanusi is no ordinary public
officer. He 'is' Governor of the Central Bank of Nigeria, the custodian
of some of our most hallowed financial secrets and the government's
accountant of last resort. What that means in effect is that unless the
Jonathan administration handles the Sanusi saga with extreme care, it
may find out that suspending the CBN Governor is the easier part of this
charade as the ever widening international financial and domestic
economic disquiet on the matter could hurt the nation very badly.
ThisDay
