Politics
Nigeria’s suspended Central Bank governor, Lamido Sanusi, could have the last laugh
by Ikechukwu Kelikume for The Conversation
The Nigerian business community and international investors into Africa’s most populous country are still reeling from the shock of the suspension of Central Bank of Nigeria (CBN) governor Lamido Sanusi. President Goodluck Ebele Jonathan claimed the suspension of the CBN governor came against the backdrop of a report from the Financial Reporting Council of Nigeria and other investigating bodies, which indicated that Sanusi’s tenure has been fraught with various act of financial recklessness and misconduct.
No one has ever fired a CBN governor in the past in Nigeria, let alone suspend the governor. The CBN Act 2007 makes clear that the removal of the governor must be supported by a two third majority in the senate on the grounds of incompetence or inability of the governor to perform his duties as the head of the apex bank.
Sanusi, the architect of sweeping reforms of Nigeria’s banking sector, had been due to step down in June. But he has already indicated he plans to contest his suspension in court. He says it is the only way to resolve the issue of autonomy of the office of governor.
Sentiment unsteady
The question now on the lips of political analysts, domestic investors and foreign investors, is what are the economic implications of his suspension, particularly as Nigeria heads towards an election in 2015. Will it exert pressure on the already weak naira, Nigeria’s currency? What impact will the suspension have on ongoing financial sector reform?
These include the merger of weak banks, the cashless policy which limits the level of withdrawal by individual to USD$3,000 and corporate bodies to USD$18,000, and the policy on currency restructuring. How will the suspension affect the sentiment of foreign investors? Will the new governor rise up to the challenge if confirmed? What new priorities is the new governor likely to pursue? And what are the likely implications if Sanusi’s legal challenge to his removal drags out in court?
On the domestic front, Sanusi’s suspension produced mixed reaction from different quarters. Some commentators were of the view that the ousting was long overdue, following Sansusi’s recent attack and open criticism of the government over USD$20 billion alleged missing from the coffers of the Nigerian National Petroleum Corporation (NNPC). Others such as opposition politician Nasir El-Rufai were quick to fault the government action if it was linked to Sanusi’s whistle-blowing.
