By Omoh Gabriel
When the governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, September 2013 wrote informing the president that the Nigerian National Petroleum Corporation (NNPC) had not remitted $49.8 billion of oil revenue to the Federation Account over a 19-month period, it was meant to be a wake up call for the government to act on what many Nigerians have come to believe is corruption personified.
The figure of nearly $50 billion was such that neither the president nor his aides would let go as usual.
The various agencies concerned went to work and came out with the fact that it is about $10.8 billion that was yet to be accounted. Certainly, Sanusi as the custodian of government funds has every right to raise issue when in doubt. But a governor of an apex institution in the banking industry cannot afford to be trivial in raising false alarm.
He must not be in a hurry to act and raise alarm when he is in a position to cause the various agencies involved in government revenue collection to look into their books and come up with the fact.
Yes! There are some figures yet to be reconciled, but the issue with NNPC pre-dates both Sanusi and President Jonathan.
When Mansur Muhtar was the Minister of Finance under Alhaji Umaru Yar A’adua, he said that NNPC had about N1.2 trillion claims submitted to his office. Dr. Mansur Muhtar said that the downstream sector of the Nigerian petroleum industry is hemorrhaging as a result of inefficiencies in the system.
The then minister, in an exclusive interview with Vanguard published on the 9th of December 2009, said that NNPC posed a challenge to the Federal Government. According to him, “NNPC presents a big challenge to us. Again, I think there are some issues to be considered here.
“NNPC has outstanding claims against the government in relation to petroleum subsidy, which has not been paid over the years. In addition, as an organisation, it also has taken some money to repair pipelines vandalised by the militants.
These, over the years, have risen considerably. What the Corporation has been telling the Federation Account Allocation Committee, FAAC, is that it is unable to remit the money because government has not settled obligations or the outstanding liabilities due to it.”
Sanusi was certainly not saying anything new, but the magnitude of the figure is what was alarming. If the matter did not unnerve the President, it would have been swept under the carpet and nothing would have been done to reconcile the figures. Sanusi’s alarm, however, raised several fundamental issues that needed to be examined.
The CBN as we know it since inception has a very reputable research unit which data until recently cannot be faulted. The CBN then boasted of very high grade economists who could hold their heads high any where in the world. That cannot be said of today’s CBN.
The alarm raised by Sanusi’s letter is a serious indictment on the capacity of the CBN to act as a banker of last resort. It would mean that whatever is coming out o the apex bank should not be taken as given. Both the government and the citizenry will have to double check information coming out of the apex bank.
The letter seriously indicts the various government agencies as it appears that there is no element of cooperation among Ministries, Department and Agencies of government. It is this simple fact that has made the economy prostrate as each arm of government is working at cross purposes. This also explains why there are no reliable data in the country called Nigeria.
More seriously, the letter and the facts therein cast doubt on the Sanusi’s CBN orchestrated reforms. It was in the same manner in 2009 that Sanusi accused banks of huge non-performing loans and sacked with immediate effect the Managing Director/Chief Executives and Executive Directors of five banks. When Sanusi made the allegation against these banks, he was believed and no second check was made to verify the gravity and veracity of these allegations. The government turned deaf ears to all pleas to cross check the fact of the allegations.
To remind Nigerians, Mallam Lamido Sanusi at the time said “the banks officials were removed due to high level of non performing loans in the five banks, which was attributable to poor corporate governance practices, lax credit administration processes and the absence or non-adherence to the banks’ credit risk management practices.
As at June 4, 2009 when I assumed office as governor of the CBN, the total amount outstanding at the Expanded Discount Window (EDW) was N256.571 billion, most of which was owed by the five banks.
“The five banks were either perennial net-takers of funds in the inter-bank market or enjoyed liquidity support from the CBN for long periods of time, a clear evidence of liquidity. In other words, these banks were unable to meet their maturing obligations as they fall due without resorting to the CBN or the inter-bank market.
As a matter of fact, the outstanding balance on the EDW of the five banks amounted to N127.85 billion by end July 2009, representing 89.81 percent of the total industry exposure to the CBN on its discount window, while their net guaranteed inter-bank takings stood at N253.30 billion as at August 02, 2009. Their Liquidity Ratios ranged from 17.65 percent to 24 percent as at May 31, 2009. (Regulatory minimum is 25 percent)”.
The expanded window that was offensive to Sanusi was a lending outlet from which banks could borrow from on interest, but the N620 billion he injected into the banks was public funds. Which was more cost effective for the nation, the expanded window or the N620 billion?
He thought in this last move he could end his tenure by yet another sensation, this time around to embarrass the nation, the president and present all the other revenue generating agencies as incompetent and manned by unpatriotic fellows.
Nigerians are swayed by whatever data they are given; no one would bother to cross check. The CBN governor went ahead and liquidated those banks.
Today, with the benefit of hindsight many at the CBN officials privately, are saying that those banks were not as bad as they were portrayed and they could still have been saved even if their chief executives were clamped in jail. It is the economy that suffered as the number of the unemployed swells by the day.
What the government did not ask the CBN governor then was what was the supposed role of the apex bank as the bank of last resort? Was it not supposed to bail out ailing banks and save the economy? Were those banks not paying their customer as at when due? If the banks were given due opportunity would they not have been able to recapitalise?
Further, if the Sanusi’s letter did not unnerve the president, and cause an inter ministerial reconciliation of revenue flows, Nigerians would have taken up arms against the NNPC, and if it were a private sector driven company, it would have been liquidated just as some of those banks were. Is it not time the government considers taking a second look at the famous banking reform spearheaded by Sanusi Lamido Sanusi now