Jonathan Directed Me To Waste Billions on Unapproved Projects, Villa, Abuja, etc -- Sanusi....... Mar. 17, 2014 by Ini Ekott PREMIUMTIMES Nigeria’s suspended Central Bank Governor, Sanusi Lamido, accused by President Goodluck Jonathan of wasting public funds on unapproved projects, has provided details of how the president himself personally authorized some of those spending, one of them a multi billion naira purchase of helicopters for the police, and another, a N2.1 billion renovation of the cabinet meeting room in the presidential villa. Mr. Sanusi said the police project, which also involved buying other security equipment, cost N19.7 billion, and that it was carried out “upon the instruction” of President Jonathan. The president, he said, also requested that the CBN pay N3.2 billion for the construction of a new counter terrorism centre for the office of the National Security Adviser, alongside other projects. “Consistent with our policy of development, upon the instruction of His Excellency, the President, the CBN intervened by paying N19.7 Billion to the Ministry of Police Affairs for the purchase of armoured helicopters and other security equipment,” he said. “Also, upon the application of the Secretary to the Government of the Federation, the CBN paid N2.1 Billion for the automation and renovation of the Federal Executive Council Chamber.” Details of the spending on “intervention projects” are contained in a lengthy statement released by the CBN governor early Sunday. Mr. Sanusi said he was responding to the government’s allegation of financial recklessness against him, a charge Mr. Jonathan said was the basis for his suspension. The president claimed his decision to suspend the governor followed the recommendation of the Financial Reporting Council of Nigeria, which he said investigated and found Mr. Sanusi as having misspent billions of naira. ut many Nigerians rejected that explanation and accused the president of removing Mr. Sanusi for revealing how state oil company, the Nigerian National Petroleum Corporation, NNPC, diverted over $20 billion oil revenue. Critics have challenged the government to prosecute Mr. Sanusi if its claims are true, and take a similar action against officials of the NNPC, and the petroleum minister, Diezani Alison-Madueke, who are at the centre of the missing $20 billion. “Irrespective of the tepid and unconvincing denial by the presidency, it is clear that the main reason the presidency moved against Sanusi is because he blew the lid on the 20 billion dollars funds which the NNPC allegedly failed to remit to the Federation Account,” opposition party, All Progressives Congress, APC, said in February after Mr. Sanusi’s suspension”, the All Progressives Congress, APC, said February after Mr. Sanusi’s removal. In his statement Sunday, Mr. Sanusi said a number of expenditure the CBN considered as interventions, but for which he was now being disparaged by the presidency, were either instigated by President Jonathan, or approved by him. “The CBN also initiated, with His Excellency, the President’s approval, the construction of the International Conference Centre for Nigeria,” Mr. Sanusi said. “His Excellency, the President, also requested that the CBN pay N3.2 Billion for the construction of a new counter terrorism centre for the office of the National Security Adviser.” In the wake of the allegations of corruption and financial mismanagement against the NNPC, government critics accused Mr. Jonathan of deploying revenue-generating agencies of government as his Automated Teller Machine, ATM, for the funding of illicit projects often not covered in federal budgets. The CBN example, as presented in Mr. Sanusi’s statement, appears typical of that allegation. Besides expenditures he said were captured under the CBN’s corporate social responsibilities, the bank, according to the details approved by its embattled governor, appeared always on call to fund an array of government projects not known to the budget, from renovating buildings, to constructing new conference centres, to buying hardware for security units. The details also highlight a spending spree by a bank that seemed incredibly buoyant, and constantly in search of bills to offset. It is not clear how these spending were categorized by the president as they were not captured in the budget. Those listed in the budget, such as the purchase of equipment for the police, were supposed to draw funding from the government’s central revenue base, and not from the CBN. Last week, President Jonathan, through his spokesperson, Reuben Abati, upped the government’s attack on Mr. Sanusi, declaring him guilty of the allegations against him, ahead of full investigation the government said was being carried out. But the president dismissed as “untrue and unfounded”- also ahead of complete investigations- Mr. Sanusi’s allegation that the NNPC failed to pay $20 billion oil revenue into government treasury. Mr. Sanusi said all “interventions” carried out by the CBN were not only known to the federal government, but that the government “supported and encouraged” them in “recognition of their positive contribution to development”. “During the recent strike by the Academic Staff Union of Universities (ASUU), the CBN intervention projects in universities were an important fulcrum in the settlement negotiations between the FG and ASUU as borne out in the Memorandum of Understanding between the FG and ASUU, where the Intervention Projects were recognized as part of the contributions of the FG to Education in tertiary institutions,” he said. He said the Financial Reporting Council itself, his main accuser, was a beneficiary of the CBN’s bazaar as “the CBN paid the sum of N220 Million to the FRCN and also organized the banking sector, through the Banker’s Committee, to contribute N280 Million, totaling a sum of N500 Million, for the construction of the IFRS Academy.” “All of these requests were duly submitted to the CBN Board of Directors and were duly approved,” he said. See Sanusi response to President Jonathan’s FRCN allegations of fiancial recklessness below: Press Release Sanusi Lamido Sanusi, CON Governor, Central Bank of Nigeria Response to the allegations in relation to suspension I am compelled to make this public statement to address the various allegations levied against the Central Bank of Nigeria (CBN) and cited as the reasons for my suspension from office as the Governor of the CBN on the 19th of February 2014. As a matter of record, the allegations were made in the following documents: Briefing Note of the Financial Reporting Council of Nigeria (FRCN) dated 7th June 2013, Ref: PRES/188/T&I/89 to His Excellency, President Goodluck Ebele Jonathan [the Briefing Note]; The Letter of Suspension dated 19th February 2014, which I received from the Office of the Secretary to the Government of the Federation; and The petition dated 9th February 2014 by Mr Erastus Akingbola. However, before I go into the above issues, let me reiterate for the records, the achievements of the CBN during my tenure as the Governor: The Record Firstly, let me state that I have been extremely fortunate to have had a solid and supportive team led by the Deputy Governors and supported by the Departmental Directors, as well as thousands of hardworking and dedicated staff who must be given the credit for all that the CBN has achieved. I would also like to acknowledge for the record, the foundation laid by my predecessor, Professor Charles Chukwuma Soludo, in a number of areas. The CBN Act, 2007, which he championed, established the CBN as a truly autonomous entity of the Federation, and made it possible for us to take the difficult decisions necessary for restoring and maintaining macroeconomic stability. The FSS 2020 and PSV 2020 documents provided the principal strategic roadmaps that led to many of the innovations in payment systems, non-interest banking, financial inclusion, the Asset Management Corporation, IFRS, Risk-based Supervision, and the like. Indeed, it will be impossible for me to review almost five years of revolutionary change made possible by the work of thousands of employees in the CBN in collaboration with other Regulators, Banks and Other Financial Institutions and Government Ministries in this press statement. However, I will mention a few of the key highlights. On monetary policy, the Bank has improved the institutional framework for policy-making. A properly constituted Monetary Policy Committee (MPC) with a clear mandate for maintaining stability has been established. The MPC has been supported by improvements in research, data and forecasting capacity, and we have also paid attention to clear communication of our objectives to the market. As a result, headline inflation has remained below 10 per cent since January 2013, from a peak of 15.1 percent and 13.9 percent in 2008 and 2009 respectively. Core inflation declined from 11.2 per cent in December 2009 to 7.9 percent in December 2013, while food inflation maintained a downward trend from 15.5 percent in December 2009 to 9.3 percent in December 2013. In addition to the conventional liquidity management products, the Bank approved financial products to manage liquidity in non-interest financial institutions. The CBN also promoted the formation of the financial Markets Dealers Quotations Over–the-Counter (FQDM OTC) Plc as a self-regulatory OTC operator. In the area of safeguarding the value of the local currency and maintaining stability in the foreign exchange market for the overall sustenance of macroeconomic stability and growth, the CBN over the period has successfully maintained a stable exchange rate regime and a robust external reserve position conducive to sustainable growth and development. On the Banking System, I was appointed Governor in the middle of a global financial crisis when the Nigerian banking system was on the verge of collapse. The Bank moved swiftly to remove the managing directors and executive directors of the banks where major corporate governance failures were discovered, provided liquidity support, pioneered the setting up of the Asset Management Corporation of Nigeria (AMCON) to purchase non-performing loans, recapitalize the banks and pilot a process that led to mergers and acquisitions, as well as recapitalization of all the weak and failing banks. As a result, all financial soundness indicators – Capital Adequacy, Asset Quality, Liquidity and Profitability ratios – were normalized. As a result of the work by the Bank, not a single depositor or creditor lost money in any Nigerian bank during or after the financial crisis. In addition to the quantitative measures, we broke up universal banks and encouraged the setting up of specialized banks (including the first Non – interest Bank in the Country’s history), pushed for the adoption of IFRS and Basel 3, enhanced risk-based supervision, issued Competency Guidelines for the staff in the banking industry, established a Consumer Protection Department and developed a Financial Inclusion Strategy and Roadmap, among others for the CBN. The Bank implemented policies aimed at reducing the excessive use of cash in the system to ensure safety, improve efficiency and curb money laundering. The transformation of NIBSS, the insistence on interoperability of channels, encouragement of electronic banking, the licensing of Mobile Money Operators, the Agent Banking and tiered-KYC frameworks have all led to rapid growth in volume and value of non-cash transaction and enhanced financial inclusion. The Bank has played its leadership role in ensuring industry compliance with environmental sustainability and governance standards, including a strong focus on women and the handicapped. The CBN in the last five years has taken a leading role in providing long-term low-cost funding to priority sectors of the Nigerian economy in a bid to help in bringing to reality the Transformation Agenda of the government of your Excellency. We have provided these funds at single-digit interest rates to micro, small and medium enterprises, as well as to companies operating in the power, aviation, and agricultural sectors of the economy, and also to large industrial enterprises with potential for structural transformation. The Bank has invested in human capital, improved staff welfare and attracted and retained specialized skills in the areas of Banking Supervision, Information Technology, Shared Services and Risk Management. On Financial Performance, the Bank has in the last five years kept a lid on overheads and cost of currency management. As a result, the Bank has continued to produce sterling results and contributed substantially to the Federal Budget. In the five years, 2009 – 2013, the Bank contributed N376 billion to the Federal Budget as Internally Generated Revenue (IGR). Based on 2012 financials alone, we paid N 80 billion to the Ministry of Finance. On the basis of the 2013 results and at the request of the Coordinating Minister of the Economy (CME), we paid N 159 billion to the Ministry of Finance in February this year; the same month the audited accounts of the CBN were approved by the Committee of Governors (COG). Indeed, due to the precarious position of Government finances, the CBN in February 2014, upon the request of the CME, gave the Ministry a further ‘Advance IGR’ of N 70 billion in anticipation of 2014 profits. May I add that, in 2008, the year before my appointment, the CBN contributed N8 billion to the Federation Account. Although the Bank is not a profit-centre, in the first four years of my term, the Bank alone contributed 75 percent of the total IGR paid by MDAs leading to commendation by the House Committee on Finance at several Public Hearings. Recognitions As a result of these achievements of my colleagues and staff, we received numerous recognitions consistently throughout my tenure from highly-regarded publications. These awards are based on a competitive process where analysts and economists rank Central Bank Governors across regions and the globe. In 2010, The Banker Magazine, a publication of Financial Times in London, named me Best Central Bank Governor in the World and Best in Africa. At the Annual World Bank/IMF Meetings, Emerging Markets, a publication of Euromoney Institutional Investor named me Best Central Bank Governor in Sub-Saharan Africa for 2009, 2010 and 2012. The African Banker Magazine named me Best Central Bank Governor in Africa, 2012. This is in addition to being named Forbes Africa Person of the year 2011 and listed by TIME as one of the 100 most influential people in the world, 2011. I have always regarded these honours not as personal accolades, but as a tribute to our nation and the committed and resourceful women and men of CBN. response to the allegations in relation to my suspension On Wednesday 10th March 2014, I submitted a Memorandum to His Excellency, Mr President, with supporting documentation, effectively addressing all the allegations contained in the FRCN Briefing Note, the Letter of Suspension and the Akingbola Petition. Having submitted my response to the President, I am further compelled, following the recent press briefing and comments by the Senior Special Adviser to the President on Media, as well as numerous other references to the allegations in both local, international and online media, to put to the public my responses, in the interest of transparency, accountability and my responsibility to the Nigerian people. Let me also state that I saw the FRCN “Briefing Note” for the first time when it was attached to the suspension letter. At no time was this report sent to the CBN either by the President or the FRCN for comments or explanations. As for the Akingbola petition, it is a rehash of baseless allegations he has been making since 2010 which apparently he must have been asked to reproduce on February 9, ten days before the suspension. It is indeed strange that the CBN Governor can be suspended based on allegations written by a man who ran his bank into the ground and against whom judgement has been obtained in a London court, and who furthermore is facing criminal prosecution at home for offences including criminal Theft. A careful examination of the allegations contained in the FRCN Briefing Note to Mr President, will show that each of the allegations could easily have been resolved by a simple request for clarification or more careful review. There is no doubt that if the CBN had received the Briefing Note, which was prepared in June 2013, all the misconceptions, misrepresentations and erroneous inferences contained therein would have been cleared. I am publishing these responses to enable the general public see that each and every allegation levelled against the CBN under my leadership is false and unfounded, and that many of the allegations were malicious and fabricated, having been designed to mislead the President into believing that the Management of the Central Bank was guilty of misconduct and recklessness. Having provided detailed explanations, backed by verifiable documents, it is my sincere wish that His Excellency, Mr President, in line with his adherence to fairness and justice, will apply the same rationale and rigour to other agencies of the Federal Government that have had serious allegations and queries levied against them, and prevail upon them to provide responses and explanations with the same level of clarity and transparency. In closing, I would like to place on record the dogged professionalism and patriotism of the staff of the CBN. They have, over the years, conducted themselves very creditably, and discharged their duties with the highest integrity. * * * * * * * * ** * * * * * * * * * * * * * * * * * * * * * * * *
Posted on: Mon, 17 Mar 2014 18:08:17 +0000
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