Fresh
facts have emerged on why President Goodluck Jonathan SuspendED the
embattled governor of the Central Bank Of Nigeria (CBN) Mallam Sanusi
Lamido Sanusi. A State House Press Release sent to elombah.com earlier
today said President Jonathan Suspended Lamido Sanusi As CBN Governor
and appointed Dr. Sarah Alade
as Acting Governor because reports
of the Financial Reporting Council of Nigeria and other investigating
bodies "indicate clearly that Mallam Sanusi Lamido Sanusi’s tenure has
been characterized by various acts of financial recklessness and
misconduct which are inconsistent with the administration’s vision of a
Central Bank propelled by the core values of focused economic
management, prudence, transparency and financial discipline".
However
according to the report by the Financial Reporting Council of Nigeria,
some of the infractions against Sanusi includes his persistent refusal
and/or negligence to comply with the Public Procurement Act in the
procurement practices of the Central Bank of Nigeria.
It cited " A) By virtue of Section 15
(1)(a) of the Public Procurement Act, the provisions of the Act are
expected to comply to 'all procurement of goods, works and services
carried out by the Federal Government of Nigeria and all procurement
entities.' This definition clearly includes the Central Bank of Nigeria.
(B) it is however regrettable that the
Central Bank of Nigeria, under your leadership, has refused and/or
neglected to comply with the provisions of the Public Procurement Act
(PPA). You will recall that one of the primary reasons for the enactment
of the PPA was the need to promote transparency, competitiveness, cost
of effectiveness and professionalism in the public sector procurement
system.
(C) available information indicates that
the Central Bank has over the years engaged in procurement of goods,
works and services worth billions of Naira each year without complying
with the express provisions of the PPA.
(D) by deliberately refusing to be bound
by the provisions of the Act, the CBN has not only decided to act in an
unlawful manner, but has also persisted in promoting a governance
regime characterised by financial recklessness, waste and impunity, as
demonstrated by the contents of its 2012 Financial Statements".
Anther infraction stated by the Council
is the unlawful expenditure by the Central Bank of Nigeria on
'Intervention Projects' across the country.
The report cited " A) the unacceptable
level of financial recklessness displayed by the leadership of the
Central Bank of Nigeria is typified by the execution of 'Intervention
Projects' across the country. From available information, the bank has
either executed or is currently executing about 63 such projects across
the country and has committed over N163billion on them.
(B) it is inexcusable and patently
unlawful for any agency of government to deploy huge sums of money as
the CBN has done in this case, without appropriation and outside CBN's
statutory mandate. It is trite that the expenditure of public funds by
any organ of government must be based on clear legal mandates, prudent
costing and overriding national interest".
The report further accused the gov of
Financial infractions and acts of financial recklessness committed by
the Central Bank as reflected in its audited financial statements of
2012.
It cited "(A) pursuant to Section 50 of
the CBN Act 2007, a copy of the audited financial statements of the CBN
for the year ended 31st December 2012 was sent to Mr. President. Based
on the issues raised in the financial statement, a reinsertion was
requested from you to enable a proper appreciation of the nation's
economic outlook.
(B) the response to this query was further referred to the Financial Reporting Council of Nigeria.
The review by the council, rather than
allay the fears of government, further confirmed concern bout the untidy
manner in which you have generally conducted the operations of the CBN.
Some of the salient observations arising from the review are;
(A) in a most ironical manner, it has
become obvious that the CBN is not able to prepare its financial
statements using applicable International Financial Reporting Standards
(IFFS) whereas Deposit Money Banks that the CBN is supervising have
complied with this national requirement since 2012.Undoubtedly,
this laxity on the part of our apex bank, apart from calling to
question its capacity for proper corporate governance, is capable of
sending wrong signals to both domestic and international investors on
the state of the Nigerian economy.
(B) the provisions of the Memorandum of
Understanding (MOU) signed by the CBN and other Deposit Money Banks on
Banking Resolution Sinking Fund have been breached in a material manner.
For example, a Board of Trustees (BOT) to manage the Fund has not been
constituted since 2010 when it was established. The CBN has however
continued to utilise the Fund for certain operations without approval of
the said BOT.
(C) contrary to section 34 (b) of the
CBN Act 2007 which provides that the CBN shall not, except as provided
in Section 31 of the Act, inter alia, purchase the shares of any
corporation of company, unless an entity set up by the approval or
authority of the Federal Government,m CBN in 2010, acquired 7% shares of
International Islamic Management Corporation of Malaysia to the tune of
N0.743 billion. This transaction was neither brought to Mr. President's
attention nor was a board approval obtained before it was entered into.
(D) the CBN has failed or refused to
implement the provisions of the Personal Income Tax (Amendment) Act
2007. Accordingly the Pay-As-You-Earn (PAYE) deductions of its staff are
still being computed in accordance with the defunct Personal Income Tax
Act 2004, thus effectively assisting its staff to evade tax despite the
generous wage package in the CBN, relative to other sectors of the
economy.
(E) the CBN had an additional brought
forward to General Reserve Fund of N16.031 billion in 2012 but proceeded
on a boy age of indefensible expenses in 2012 characterised by
inexplicable increases in some heads of expenditure during the year.
Examples include:
1. The bank spent N3.086 billion on
"promotional activities" in 2012 (up from N1.084 billion in 2011). The
bank spent this sum even when it is not in competition with any other
institution in Nigeria;
2. The CBN claimed to have expended
N20.202 billion on 'Legal and Professional Fees' in 2011 beyond all
reasonable standards of prudence and accountability;
3. Between expenses on 'Private Guards' and 'Lunch for Policemen', the CBN claimed to have spent N1.257 billion in 2012;
4. While Section 6(3)(c) of the CBN Act
2007 provides that the board of the CBN is to make recommendations to
Mr. President on the rate of renumeration to Auditors, the bank has
consistently observed this provision in breach and even went to the
extent of changing one of the Joint External Auditors without notifying
the office of the President.
5. In the explanations offered by the
CBN pursuant to presidential directives, it offered a breakdown of
'Currency Issue Expenses' for 2011 and 2012. Interestingly, it claimed
to have paid N38.233 billion to the Nigerian Security Printing and
Minting. Company Limited (NSPMC) in 2011 for 'Printing of Banknotes.'
Paradoxically however, in the same 2011, NSPMC reported a total turnover
of N29.370 billion for all its transactions with all clients (including
the CBN).
6. It is significant to note that the
external audit revealed balances of sundry foreign currencies without
physical stock of foreign currencies in the CBN Head Office".
The report also mentioned his Questionable write-off of N40 billion loans of a bank.
"The above issues are only a few of the
infractions highlighted by the review and which point to the gross
incompetence and recklessness which characterised the operations of the
CBN in the period under review" the report said.
Meanwhile the State Security Service has
seized Sanusi's passport when he landed at Murtala Mohammed Airport
this afternoon from Niger Republic.
According
to a reliable source, the Presidency has decided to interfere with yesterday's Supreme Court ruling between the governor and his cousin, Sir
Celestine Omehia. We gathered that Celestine Omehia formally returned
yesterday to the fold of the Peoples Democratic Party (PDP) and was seen
in the Presidential Villa, apparently to meet President Goodluck
Jonathan.
