The Nigerian naira took a clobbering today, and trading in Nigerian bonds was halted with the surprise announcement that Nigerian president Goodluck Jonathan had suspended central bank governor Lamido Sanusi. Sanusi is a generally well-respected central banker who has overseen a stabilisation of Nigerian monetary policy. However, his outspoken criticism of the management of government oil revenues, in particular his allegation that some $20bn in oil revenue had gone missing from the fiscus, earned him the enmity of the president. Many see his removal as a politically motivated act, and fear for the future independence of the central bank. Sanusi says he plans to challenge his suspension, not in a bid to get his job back, but in an effort to define the powers of the Nigerian presidency and protect the central bank from future interference. Investors, meanwhile, seem likely to flee Nigerian assets until predictability is assured. – FD
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ESTHER UGBODAGA: Thank  you, Mr Governor, for talking to us. We have just learned of your suspension by the presidency. Has this come as a surprise to you? Have you received any formal letter to this effect?
LAMIDO SANUSI: Well, I’ve been told by my office that a letter was received. As you know, I’m this morning in Niamey along with other governors of West African Central Bank, to meet with the Presidents of Nigeria and Ghana as part of the world team group on the West African currency zone. Fortunately, I did come in with Dr Sarah Alade – my deputy governor – whom I’ve been asked to hand over to, so I’ve left the meeting and handed it over to her. I’ve just met the Nigerian ambassador to Niger who said that the committee asked him to inform me of this decision.
ESTHER UGBODAGA: Let’s continue. Speaking earlier on today, to the Special Advisor on Media and Publicity for the President, he did say that the presidency has received reports from the Financial Reporting Council of Nigeria and other investigating bodies, which have shown that your tenure has been characterised by what they called ‘various acts of financial misconduct and recklessness’. They say that this is the basis for the suspension.
LAMIDO SANUSI: Well, I don’t know what they’re talking about, so what I’ll do is, I’ll come back and see what those allegations are. I’m aware that some time ago, the reporting council – when they looked at our audited account – they asked questions which were frankly just questions we responded to – to the President, and we didn’t get any feedback. I don’t think there’s any issue raised that’s not been raised before. We all know what this is about: this is about consequences for decisions I have taken, and this is something that was long overdue. I’m surprised it took them so long.
ESTHER UGBODAGA: That’s quite interesting. Moving on, we’re also seeing some action at the financial markets. Just this morning we saw the naira spike into 169 to the dollar and shortly after that, we’re expecting the bond to open. However, that has also been shut down. Traders that we spoke to, say that they’re afraid of a major selloff. What is your biggest concern right now, for the markets?
LAMIDO SANUSI: Basically, my concern is for the system. I hope that the Nigerian economy will not be hurt by this. I also hope that the position of the Central Bank will be protected. Look, I’ve had a wonderful time being of service to my country. I’ve been fortunate to have the opportunity to do some good work on the Bank’s stability. I would not want to see all of that unravelled and no individual is worth it.
ESTHER UGBODAGA: Do you think this recent suspension is politically motivated?
LAMIDO SANUSI: It’s not for me to comment. I think the answer to that is obvious, but I’m not going to comment on that.
ESTHER UGBODAGA: The analysts that I’ve spoken to, all say they believe that this could perhaps be a witch-hunt and they said it’s because of you being outspoken against the government in recent months. They therefore believe that this could be politically motivated.
LAMIDO SANUSI: There are legalities. There is also the legal question of whether the President, who does not have the authority Central Bank’s governor – whether it’s suspension and not removal. I’m not interested. I’ve always said it. I was invited to serve the country. If the government, at any time, feels that it’s time for me to go, I’ll go. I don’t know what to do. I think in terms of the institution, it would be helpful to establish the principle by court. I think that’s what we need to do.
ESTHER UGBODAGA: Are you saying that you’re not going to challenge the suspension?
LAMIDO SANUSI: Look, even if I challenged it I’m not going back to the job. Even if I challenge successfully, I will not go back. I think it will be in the interests of the institution for the court to actually, once and for all, give the President the power to do this. The reason is that if it is not challenged then from now, the next Central Bank governor cannot be independent, for fear of being suspended by politicians. I do plan to ask the courts to confirm if indeed, that authority exists, and I will challenge it.
ESTHER UGBODAGA: I ask that question because there have been questions or concerns about your legacy. You only have a few months to the end of your tenure, and many people believe that you have been a positive impact to the Nigerian financial system since you took over in 2009. They are therefore of course, worried and concerned about the kind of legacy you will be remembered for, especially now that this is happening.
LAMIDO SANUSI: No, my legacy was given as at the time I leave office today: a legacy of low inflation, stable interest rates, a reformed and well-governed banking system of robust reserves, a legacy of an independent Central Bank, a legacy of financial inclusion, etcetera. History will record that. It teaches that you can suspend an individual, but you cannot suspend the truth. I admit it’s all about these concerns, around oil revenues, and around rigidness in the oil sector. Well, if this is going to bring back the 20 billion dollars, then that’s fine.
ESTHER UGBODAGA: You’ve said that you do not believe going forward – if you do accept this suspension – that you do not believe that there would be an independent Central Bank going from here. What kind of message do you think this is going to send to national investors, especially how the market will be perceived from here on?
LAMIDO SANUSI: Nigeria as a country is very important to me. I would give my last…be it courage [unclear 6:08] difficult for my colleagues who are in the bank, to manage the institution. Sarah Alade is a very good and competent person. The key governors are still there. The bank MD’s are there. I am sure that the system will teach her. It’s bigger than any one individual is. My concern, as I’ve said, is whether this is in fact legal. I think I’ve had my last year at the job, whatever happens. I’ve never planned to…it has never been my desire to hold onto a job. However, I think it’s important to establish the point – legally – whether this can happen. If it’s not established, then the very next governor of the Central Bank can be suspended for any reason and the independence of the Central Bank is totally undermined. [Unclear 7:05] the governor cannot be removed, is that he cannot be suspended: if we can establish that… I can be queried if there’s a query…if there’s something constructive…if I’ve been convicted or a crime has been established, that’s a different matter. To exercise such an act arbitrarily in a letter signed Secretary to the government – not even by the President – these are questions that need to be asked in the courts of law.
ESTHER UGBODAGA: Mr Sanusi, if I can just comment here, Mrs Sarah Alade will be taking over from you as Acting Central Bank governor. Now we know that she is also a member of the Monetary Policy Committee. Are you hoping that she will continue with the monetary tightening that we’re seeing right now? In addition, to point out a fact, at the last MPC meeting, she was actually the only member who voted for depreciation of the naira, moving the band from the current band that we have.
LAMIDO SANUSI: Sarah Alade is a very competent person. I don’t think she’s going to take charge of economic policy for a long time. Actually, I feel [unclear 8:06]. I asked her to sit in, in the meeting of the governors. I’m planning to go back to my [unclear 8:13]. I have every confidence in her ability to run the Central Bank. I wish her the very best. I’m very happy for her. As I’ve said, I have no regrets. I have no ill feelings. I have no sadness. I’m happy and I’m proud of what I’ve done.
ESTHER UGBODAGA: On that note Mr Governor, what are you going to miss the most – being a Central Bank governor? What are you going to miss the most from the last five years of being a Central Bank governor? What are you going to miss the most from your tenure? We know there’s been a lot of controversy.
LAMIDO SANUSI: Oh, what am I going to miss the most? I’m looking forward to the future. I look back at my term and I’m very happy with what I’ve done. I got into Central Bank [unclear 9:16] and that I will not change. I will be myself.
ESTHER UGBODAGA: Thank you Sanusi Lamido Sanusi, we’re going to have to leave you, but thank you so much for talking to us.
