Nigerian Leader Sacks Reformist Central Bank Chief

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Nigeria’s President Goodluck Jonathan on Thursday ousted the Central Bank governor blamed for leaking news that billions of petrodollars are missing from the coffers of Africa’s biggest oil producer, accusing him of “financial recklessness and misconduct.” The country’s naira currency weakened in response, analysts said.

Jonathan immediately sent to Parliament the name of another banker he proposed as the new custodian of the nation’s federal reserves, making clear that he effectively has fired the internationally respected Lamido Sanusi, a 52-year-old career banker.

The opposition All Progressives Congress coalition said the move sends `’a strong signal to all Nigerians that it (Jonathan’s administration) will not tolerate any exposure of corruption under any circumstance.”

Senior analyst Murtala Touray says London-based HIS Country Risk assesses it as an effort to discredit Sanusi’s report of missing billions and to send a message to Sanusi’s successor “not to wash government’s dirty linen in public.”

Sanusi, who has spearheaded bank reforms and acknowledged making powerful enemies among vested interests in a country where corruption is endemic, could not immediately be reached for comment.

The naira dropped from 163 to 169 to the U.S. dollar when Jonathan’s statement became public, financial analysts said. The Central Bank briefly stopped trade in its fixed income and bond market.

Economist Bismarck Rewane warned of “a very difficult time” for the naira and Nigeria’s financial market in the near-term. In the long term, he said it raises questions about the future independence and autonomy of the Central Bank.

Such moves make investors jittery and encourage capital flight, political economist Adeola Adenikinju of Nigeria’s University of Ibadan said, pointing to investors dumping the naira Thursday.

Rewane said the suspension from a position held in high reverence increases uncertainty as Nigeria prepares for a hotly contested presidential election in February next year.

A statement from presidential adviser Reuben Abati said Jonathan has noted reports from the Financial Reporting Council and other investigating bodies indicating that Sanusi’s tenure “has been characterized by various acts of financial recklessness and misconduct.”

Local media had reported in December that Jonathan had demanded Sanusi resign, and that the governor had refused to leave before his five-year tenure expired in June this year.

Last year Sanusi reported that $50 billion worth of oil sold by the corruption-riddled state Nigerian National Petroleum Corp. had not been paid to the government. The Senate Committee on Finance last week ordered an independent forensic audit into the missing money, which it said now amounted to about $20 billion. The Finance Ministry said missing receipts recovered in an audit accounted for the rest of the missing money.

Jonathan had dismissed Sanusi’s charges as “spurious” and has said that corruption is not among the biggest problems suffered in Nigeria, Africa’s most populous nation of more than 160 million people.

Jonathan appointed deputy governor Sarah Alade as acting governor, saying he is “determined to urgently re-position the Central Bank of Nigeria for greater efficiency, respect for due process and accountability.”

Nigerian accounts on Twitter hummed with the news, with many saying Sanusi was being punished for fighting corruption, and others hoping his suspension would lead him to making even greater revelations.

“When you fight corruption, corruption fights back,” the Enough Is Enough Nigeria project tweeted.

Sanusi, a dapper figure who wears signature bow ties, has said he received death threats and frequent warnings he would be fired after he took “a decision that would pitch us against powerful economic and political forces,” taking on bank CEOs who had stolen billions and who had bought political protection or actually were politicians.

He said corrupt vested interests are at the heart of 90 percent of the problems confronting Nigeria, from an northeastern Islamic uprising and deadly ethnic strife to a lack of jobs, education and health care.

“We don’t have development because vested interests continue to rape this country and take the money out, and the only way you’re going to move from potential to reality is to stop preaching and ask yourself how can we overcome the fear of vested interests and how can we confront them,” he told an audience of young people at a TedX forum in Nigeria’s capital, Abuja, in August.

 

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