Nigeria is heavily dependent on the oil sector as a major revenue source. The Nigerian National Petroleum Corporation (NNPC) has oversight of the country’s petroleum trade and keeps records on domestic crude oil sales and reconciliation statement with the Central Bank of Nigeria (CBN). The NNPC is widely considered as one of the most powerful corporation’s in Nigeria, so when in 2013, one of Nigeria’s most respected central bank governors, Sanusi Lamido Sanusi, told a senate committee that $49 billion was missing from the state coffers, all hell broke loose.
“I had for many years expressed concerns that reserves are not going up but it never really hit me. I always thought there was some explanation of maybe the production sharing contracts were not favorable to Nigeria, the oil company was taking the bulk of the revenue, maybe we had some sort of financing arrangement with the oil companies and the revenues were going towards paying those debts, maybe NNPC had borrowed from banks and the revenue was going towards paying off the banks,” says Sanusi, who now goes by the name of Emir Muhammadu Sanusi after being crowned as the Emir of Kano in 2014.
The shocking revelation will forever haunt Sanusi as his worst day in business. It all began in a quarterly meeting at the CBN.
“We have within the central bank what’s called the Government Consultative Committee and it is made up of all the departmental directors, the deputy governors and the governor. We met once in a quarter to review the economy. At several of these meetings I had complained that I was not at all satisfied that we had understood what was going on with revenues because the numbers were not adding up to me,” says Sanusi.
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“So the initial report I got was that we had been seeing a huge and increasing gap between the value of crude oil shipped from Nigeria and the amount of money paid in by NNPC. So I said ‘why don’t you go back to just January last year ‘til now and bring out from your records how much crude we exported and how much revenue we got in’. He came back with numbers that showed a difference of $49 billion and I said ‘I don’t believe this’. So I got his deputy governor and other directors to look at the numbers again and they came back with the same number.”
After reconciliation, $29 billion was explained through a production sharing agreement where the money was paid to the state through the Federal Inland Revenue Service (FIRS) account instead of the CBN account. The remaining $20 billion however could not be accounted for. Sanusi had to make the difficult decision either to keep quiet and finish the remainder of his term as governor of the CBN or speak up. He decided to speak up.
“I thought the best thing to do was to write to the president and draw his attention to this and the reason is because, as governor of the central bank, I have the fiduciary responsibility to my customer to let them know if something is going wrong. So I wrote to the president and said to him ‘Mr President, I am concerned that reserves are not going up’ and explained to him what was happening. This was in August 2013; the president received the letter and did nothing. I saw him several times in meetings after that but he said nothing,” says Sanusi.
After being ignored for months, Sanusi’s letter mysteriously ended up in the hands of the former president, Olusegun Obasanjo, who wrote an open letter to the Goodluck Jonathan administration. The media frenzy that ensued resulted in Sanusi being summoned to the president’s office.
“I got a call and he said I should see him at 3PM and when I got there the place had been swept, there was no one apart from the security services, it was as if everybody had been asked to go. He says to me he is calling because he is surprised a letter I wrote to him got to Obasanjo and I said to him I was surprised as well. And he said he is calling me because he thinks I know who gave Obasanjo the letter. I said the letter was in different places, and Obasanjo had been a former president and lived in this villa for eight years and therefore he is more likely to have sources inside this villa than inside the CBN,” says Sanusi.
“He said he is convinced that the letter left the CBN to Obasanjo and I have 24 hours to find out who leaked the letter or sack somebody, and if I didn’t sack them then that was proof that I leaked the letter and that I should resign.”
The exchange was unexpected for Sanusi. The focus was not on the missing $20 billion but rather on who leaked the allegations to the former president. Sanusi redirected the focus of the conversation back to the missing funds and put the blame on the NNPC and the former Minister of Petroleum Resources, Diezani Alison-Madueke. From that moment, he knew he had signed his professional death warrant.
“I knew that taking on the NNPC was taking on the most powerful minister in Jonathan’s government and nobody who had touched Diezani had survived; so it was not a question of what would happen, I just didn’t care at that time. I did not want to go down in history as having seen this and kept quiet. Once I mentioned the minister he got very angry, his countenance changed and he said ‘you know, whether you like it or not, you are going to leave that office, I cannot continue to work with you, either you or I will leave government’.”
The following months were full of threats and allegations of corruption against Sanusi, which led to his eventual suspension by Jonathan on the grounds of financial recklessness and misconduct. His term as the governor of the CBN had come to an end just a couple of months before the end of his official tenure. The authorities seized his passports and made life uncomfortable, according to Sanusi.
“I always said that I didn’t see the role of being Governor of the Central Bank as an end; it was never really an ambition for me. It was a job and, if I wasn’t sacked, my term would end anyway. The only reason I stayed is because I believed if you are called to serve your country, don’t just walk away. You have a five-year term, complete the term and go. So it wasn’t an issue, the real issue for me was to get to the bottom of what had gone wrong,” says Sanusi.
These days, Sanusi still spends his time in service to his country but this time as Emir Sanusi, and the religious leader of the Kano Emirate. The role is a hereditary role and has been in existence for thousands of years, with his particular dynasty ruling Kano for over 200 years. The role has tremendous influence in terms of advice to political authorities and collaboration in the delivery of public services. As he looks back on the events that transpired just a few years ago, his resolve is as strong as ever when asked if he would have done anything differently.
“I am a prince and you need to understand the psychology of princes. The best place for a prince to be is a place where he can be a hero; at that point we had reached a point where I could not lose. If the president brought me down, I would be brought down while defending $20 billion of the Nigerian people’s money and if I brought the president down I am a hero for bringing the president down while defending $20 billion of the Nigerian people’s money, I could not lose. The only way the president was going to win was to sack his petroleum minister and investigate the money.”

The Pain Of The Banker Who Investigated The  Missing  $20 Billion

The ignominious ousting of Sanusi Lamido Sanusi, arguably Nigeria&#8217;s most recognisable Central Bank governor in history, heralded a tidal wave of public opinion and sent shockwaves throughout financial markets.
Following allegations of financial misconduct in the bank’s 2012 annual report, Sanusi was questioned by Nigeria’s President Goodluck Jonathan in May and suspended in February while on assignment in Niger. The timing has led some to conclude that it is a consequence of the embarrassment he caused the government by questioning the country’s national oil company over $20 billion that was missing from the national account.
The action caused debate over whether the president acted legally since the constitutional provision for removal of the Central Bank governor states it must be approved by a two-third majority in the senate. In the aftermath, the naira recorded a significant loss in value, trading at N169 to $1 from a previous day closing price of $163. This was described by Proshare, a market intelligence firm, as the worst single day drop in 15 years.
Sanusi was a symbol of Nigeria&#8217;s economic stability because of his prudent monetary policy regime. His achievements included reducing inflation of over 11% in 2009, when he assumed office, to single digit rates, as well as maintaining exchange rate stability which saw the naira strengthening against the dollar over the past 24 months. The overall performance of the system under his watch fueled confidence in Nigeria&#8217;s economy and led to heightened interest in the country’s bonds and investments.
Predictably, his abrupt removal was met by a panicked response from investors. The government moved quickly to reassure stakeholders, with finance minister Ngozi Okonjo-Iweala emphasizing that the prudent fiscal and monetary policies that had been pursued up till now, will be maintained.
While the minister’s assertion and a similar statement by the interim head of the bank, Sarah Alade, provided some calm, the system will continue to be characterized by uncertainty until at least several months into the tenure of the incoming helmsman, Godwin Emefiele, the CEO of Zenith Bank, one of Nigeria’s largest lenders.
Emefiele, a former university lecturer, is a veteran of the banking sector having been on the management team of Zenith since it was founded in the early 1990s. While his nomination is surprising, he is viewed favorably by industry observers due to his reputation as a steady hand.
In light of these events, Nigeria’s monetary policy authorities are faced with the formidable challenge of facilitating a stable environment that will enable continued growth of the economy. At the previous meeting of the Monetary Policy Committee, the bank’s policy making authority, key issues were identified which pose a challenge to monetary stability in the near to medium term. These include the depletion of the country’s reserves, dwindling flows of foreign investment, the widening gap between the official exchange rate and that of authorized dealers, and the upward tendency of inflation.
These will persist in the coming months as the country prepares for national elections next year. Investors are likely to tread cautiously as the outlook evolves, hence authorities may resort to implementing extraordinary measures based on coordinated fiscal and monetary policy actions, in order to stem volatility. However, the recent high growth potential classification of Nigeria as part of the MINT countries, along with Mexico, Indonesia and Turkey, means overall interest in Africa’s largest economy in waiting is unlikely to wane.
Meanwhile, Emefiele will assume office as the 11th governor of the Central Bank. With a calm disposition that is the antithesis of Sanusi’s vibrant personality, he is viewed as having a temperament that is more suited to the role. Highly regarded by colleagues and observers, he will need to leverage his considerable experience to build on the achievements of the bank’s previous leadership, as he steers it through a period of uncertainty.
The manner of Sanusi’s removal has raised old questions about the independence of the Central Bank governor in a country where political leaders wield considerable influence. While he has confirmed that he will not go back to the job, Sanusi intends to challenge his removal in court in order to clarify the legality of the president’s action for the benefit of his successors.

Stormy Days Ahead?

“My name is Sanusi Lamido Sanusi, not Central Bank Governor. I enjoy my job but if you want me to quit, I will honorably quit.”
Those were the words of the Central Bank governor to a Nigerian Senate Committee in 2010. He was summoned to defend himself after attacking Parliament for consuming, in salaries and allowances, a quarter of what the Federal budget allocates to overhead costs.
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Back then, he didn’t have to quit. In February, almost four years later, a statement from the office of President Goodluck Jonathan announced his suspension on account of far-reaching irregularities. The following day, a 13-page investigative report, dated June 2013, surfaced online. It was produced by the Financial Reporting Council of Nigeria, an obscure government agency. The damning report appears to contain the evidence hinted at as Sanusi’s suspension was announced.
In the months before his suspension, it became public knowledge that Sanusi had fallen out with Jonathan after the leak of a letter he addressed to the president alleging that tens of billions of dollars of oil revenue was unaccounted for. It was reported that Jonathan was deeply embarrassed by this. Sanusi confirmed that the president asked him to resign for the leak. He refused.
Sanusi was appointed to the office in June 2009, five months after he was named CEO of First Bank of Nigeria, the country’s largest bank by assets. It was a critical time in the banking industry. The shock from the global economic meltdown was still reverberating across Nigeria. The stock market had crashed and there were rumors that many banks were only alive because the Central Bank was propping them up with cash.
One of the first things he did as governor was to carry out an audit of Nigeria’s 24 banks. Within his first four months, he sacked eight bank CEOs for malfeasance and poured nearly $4 billion worth of bailouts into the banks they ran. In boldness and scope it was the most momentous thing in Nigerian banking’s recent history. That action sealed Sanusi’s reputation as a no-nonsense banker. Most of what he did afterwards was viewed in that light. It was therefore not much of a surprise when he took on the powerful National Assembly a year later.
Under him, the Central Bank was widely respected. In January 2013, inflation fell to 9%  and stayed in single digits until the news of Sanusi’s suspension broke. He was fiercely committed to the stability of the naira; regularly tinkering—with mixed success—with forex regulations to keep the exchange rate stable.
Time had him on its Most Influential Persons list in 2011. In his final months, foreign investors expressed concerns about the future of the Nigerian economy post-Sanusi.
He was born into aristocracy. His grandfather was an Emir of Kano, one of Nigeria’s oldest kingdoms; his father a foreign service bureaucrat who went on to become Nigeria’s ambassador to China in the 1970s.
“He adored Chairman Mao Zedong’s China, which for him was one in which the black African—seen everywhere else at the time as inferior—was worthy of respect,” Sanusi wrote in the Financial Times.
It would have been easy to conclude that Sanusi shared his father’s adoration for all things Chinese, especially when he announced, in 2011, that Nigeria was going to take the unprecedented step of diversifying some of its external reserves into Renminbi. But the central thesis of that piece was that Africa must recognize that China is in Africa not for African interests but its own.
For a central banker he was extremely outspoken.
He had always been that way. In the 2000s, he regularly wrote and published in newspapers and online forums ardent opinion pieces touching on some of Nigeria’s most contentious issues: politics, religion and ethnicity.
He was a polygamous Muslim prince—with a degree in Sharia and Islamic Studies from the International University of Africa in Sudan, earned several years after his Master’s degree in economics—who boldly championed women’s rights. In April last year, he disclosed that the Central Bank had mandated Nigeria’s banks to reserve more board and management positions for women.
Last year, he announced that he had no plans to run for a second term. By Nigerian standards it was another unusual move; public officials never turn down the opportunity of a second term. But it may simply have been that the hard-nosed Sanusi had realized that he didn’t stand a chance.
In the end, it was a terse statement that ended his time at the Central Bank. For someone who made his name as an insider critical of what he saw as the government’s penchant for undisciplined public spending, it was ironic that the millstone that pulled him down came labeled with the same failings. For now, however, no one knows how true those allegations are.
In his appraisal of his final moments, Sanusi was as clear-eyed as he was when he inherited a deeply dysfunctional banking system.
“This is about consequences for decisions I have taken. This is something that is long overdue. I am surprised it took them so long.”

‘I Am Surprised That   It Took Them So Long’

&nbsp;
<h3>SANUSI LAMIDO SANUSI</h3>
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<h3>Governor of the Central Bank  of Nigeria</h3>
In a country plagued by corruption, fraud and money laundering, no-one had expected such a radical, and by his own admission, “sudden” and “very risky” move. A mere two months into the job of Nigeria’s Central Bank Governor, Sanusi Lamido Sanusi fired, in one fell swoop, five CEOs of the country’s leading banks for mismanagement and corruption.
In a place where those who end the careers of others get theirs abruptly ended too, Sanusi, as some of his critics retorted at the time, had gone too far; he had overplayed his hand. His answer: “Well they should tell me exactly where I should have stopped. People have stolen money and run banks to the ground. Was I supposed to leave them?”
Considering the fact that he knew some of the executives personally, and the initial five institutions that were affected by his action accounted for a big chunk of the country’s bank deposits—his move was to be a litmus test for the resilience of Nigeria’s financial services industry, to say nothing of his own character and principles. But when further investigations revealed that at least a third of the country’s banks were being toyed with, he was given more reason to put public interest before his and “stand for those who couldn’t stand for themselves”—even if that meant “taking difficult decisions that were painful” to him personally.
Sanusi would later tell pan-African television network, CNBC Africa, that although the three weeks he spent arduously contemplating the axing of the bank executives was “the most difficult part of my life”, he was “pleasantly surprised” at the amount of support he subsequently got from the people of Nigeria, across the board and including the country’s politicians, many of whom are known to be weak-willed and dependent on business people to bankroll their lives.
But if politicians and Bretton Woods thought that because they had supported Sanusi, he was in their pockets, they were so wrong. In Sanusi’s book, it soon became apparent, there are no permanent friends.
The legislators discovered this some months ago when Sanusi told a public gathering that 25.4% of the nation’s overhead cost was spent on Parliament, something many surmised as a veiled criticism of the way the country’s budget was allocated. Furious with him for “deliberately inciting” the populace, the lawmakers summoned him to Parliament and after a lot of tongue-lashing asked him to apologize.  Sanusi stuck to his guns. He told the politicians: “If I do not believe that I am wrong, I do not apologize.”
A month later Sanusi butted heads, again. This time with the International Monetary Fund (IMF) for a suggestion that Nigeria should devalue its currency. He slated them for advice that was “simply not based on sound economic logic”.
When the FORBES AFRICA team informed Sanusi that he had been short listed for the Person of the Year, we asked him whether, after having stepped on so many toes in such a short space of time, there was ever a time he considered, well… er…taking it easy?
“No, I never did,” he said pointedly, “on the contrary—I sometimes thought I didn’t step on enough toes. I think that part of my responsibility as a Nigerian is to ask what are the things wrong in our society and that need to be changed and what can I do in my position to change it.”
Change has indeed come to Africa’s most populous nation—thanks, in no small measure, to Sanusi among others.
“His quick and firm actions likely prevented a systemic banking crisis,” the IMF notes in its latest report on Nigeria.
“The core function of a central bank is to provide financial system stability, exchange rate stability, and price stability. Therefore, to have been able to provide stability in the last two years when the rest of the global economy has been in turmoil has been the principal achievement,” Sanusi says.
“Everything we’ve done in terms of the recapitalization of the banks, mergers and acquisitions, governance reforms etc are all aimed at financial stability. We’ve been able to do that while achieving stability in the exchange rate and keeping inflation relatively under control. Obviously, we’ve had volatility in interest rates and exchange rates because you can’t have price, exchange rate and interest rate control at the same time. But I think we’ve achieved our core mandate.”
Business confidence has surged and Africa’s third-largest economy is expected to grow above trend, with favorable medium-term prospects. A 7% real GDP growth is relatively high, even though it is below the double-digit levels the country requires if it is to become one of the world’s top 20 economies.
“It’s just an arithmetic fact that at current growth rates we’ll take over from South Africa in terms of share size. But this is a country of 167 million people and growing and 7% growth at the moment does not improve the welfare of the people of Nigeria and we need a higher rate of growth than we have at the moment,” Sanusi says: “The focus should not be on GDP, but GDP per capita, human development indicators and the quality of life of the population. Inclusive growth is the challenge.
Double-digit growth will be a function of the right policies, he says: “We already have 7% growth without power and infrastructure. Growth that has come largely from telecoms, wholesale and retail trade and the good fortune of rainfall for agriculture. It’s a no brainer that if we begin to move, for instance, agriculture production towards global averages we can probably double growth in that sector and build manufacturing by fixing power and infrastructure, moving from 7% to 12 or 13%.”
Born on July 31, 1961, of a public servant father who headed the Nigerian Ministry of Foreign Affairs in the 1960s, Sanusi has BSc and MSc degrees.
Between 1983 and 1985 he taught economics at his alma mater, Ahmadu Bello University, before joining the private sector.
He was the CEO of First Bank when, some day in late February 2009, he received a call from the then Nigerian President, Umaru Yar’Adua.
“We spent about 15 minutes chatting about family,” Sanusi recalls. But it wasn’t until May 8 of the same year that Sanusi got another call, this time the head of state informing him of his wish to make him the Governor of the Central Bank of Nigeria. It came as a big shock to Sanusi, who had never met his president before and thought you had to lobby to get such jobs.
Little did he know that two years on, he would have behind him such accolades as World Central Bank Governor of the Year 2011, Sub-Saharan Central Bank Governor of The Year 2011, African Central Bank Governor of The Year 2010 and People’s Person of The Year 2010.
He is most likely to arrive at the Forbes Africa Person of the Year awards ceremony in Lagos wearing a bow tie, for he refuses to wear a conventional tie. A bow tie, he says, is “cute” and speaks to his “instinctive sense of being different”. What else would you expect from a banker who never runs with the herd.

Tag: Sanusi Lamido Sanusi

FORBES AFRICA SOCIAL MEDIA

The Pain Of The Banker Who Investigated The Missing $20 Billion

Stormy Days Ahead?

‘I Am Surprised That It Took Them So Long’

“I sometimes thought I didn’t step on enough toes”