REMOVAL OF CBN GOVERNOR – KEEPING FOCUS ON THE ISSUES – N-KATALYST – 23 February, 2014
N-Katalyst, a non-partisan network of individuals with a deep commitment to the promotion of Nigerian unity and progressive change is seriously concerned about the removal of the CBN Governor on 20th February 2014 by the President Goodluck Jonathan Administration.
ILLEGALITY OF THE REMOVAL OF THE CBN GOVERNOR
The purported suspension of the Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, by the President is a patent violation of the rule of law and the principle of legality. The decision is symptomatic of the apparent desperation that has gripped the presidency and its allies in the wake of the troubling allegations made by the Governor of the Bank that public officials in the NNPC are looting the country blind in the name of subsidy payments.
In law, the purported suspension of the Governor is unwarranted. Section 11 of the Central Bank of Nigeria Act, 2007 clearly lists the instances when the Governor or any of his Deputies can cease to remain in office. None of such instances include suspension by the President. The only mention of the word ‘suspension’ is in section 11(1)(d) and that relates to the removal of the Governor when he or she is disqualified or suspended from practicing his or her profession in Nigeria. Of course, the illegal suspension of the Governor is not from a professional body and is not at all contemplated by the law.
The only occasion the President can recommend the removal of the Governor or exercise any disciplinary control over him or her is under section 11(1)(f) and that recommendation must be supported by two-thirds majority of the Senate before he or she can be removed. Now the law is clear that the express mention of one thing is the exclusion of the other. In other words, if the law had intended that the President should exercise the power of suspension over the Governor of the Central Bank, it would have expressly stated so, particularly as the same law provides for the removal of the Governor based on his or her suspension from professional practice.
THE ISSUE OF MEGA CORRUPTION
N-Katalyst is aware that Sanusi Lamido Sanusi has been consistent in exposing the exponential growth of mega corruption in Nigeria and it is clear that his removal is intended to put a stop to his revelations and sustain the regime of impunity that exists today. We recall the following facts:
At a Public Hearing in the House of Representatves in late 2010, the CBN Governor raised an alarm over fraud in the fuel subsidy regime. This was corroborated by subsequent investigations, such as those by the House of Representatives Committee and the Aig-Imokhuede Committee.
He revealed in his memo to the Senate Committee on 12 February 2014 that NNPC sells our petroleum for a fixed price of $10 a barrel and that they do not sell it at the market price. This revelation demonstrated that a cabal is selling our petroleum for a paltry percentage of its market price.
The Governor insisted that we should get full value for our resources – an act that should be commended for its patriotism.
iii. He also pointed out that NNPC enters into agreements with private agencies to swap crude oil for processed petroleum products. Such SWAP agreements are normally set up when the crude oil is of low grade. Nigeria’s crude oil is one of very high quality. The SWAP agreements result in serious leakages because they are not properly structured, monitored or audited. Moreover, they allow documents to be destroyed after one year, which allows monumental fraud to be covered up.
Sanusi Lamido Sanusi has also exposed the failure of NNPC to remit foreign exchange to the Federation Account at a time of rising oil prices.
Similar concerns have been also raised by NEITI, the KPMG audit carried out under Minister Aganga when in the Finance Ministry and the Nuhu Ribadu Committee.
NNPC claimed N310.4 billion as “subsidy” on kerosene from 2009 to 2011, even though it had received and acknowledged, in 2009, the directive under President Yar’Adua to eliminate the kerosene subsidy. This is a violation of a Presidential directive, which should be treated as a serious offence. Statistics from the NBS show that no such subsidy was made on the price of kerosene. So the question is: Where is the missing N310.4 billion supposedly spent on kerosene “subsidy”?
vi. NNPC claims to have paid $8.49 million as fuel subsidy during the period April 2012 and December 2013 when its returns to the Federation Account after March 2012 show that the payment on fuel subsidy was Nil.
So NNPC is either making false returns or making false public statements. How does NNPC explain this contradiction? What happened to the $8.49 million supposedly spent on fuel “subsidy”?
The CBN Governor also questioned NNPC’s role in relation to NPDC. He provided evidence to show that NNPC took oil blocks belonging to the Federation, gave them to itself under the cover of NPDC and then transferred the operation of the blocks to inexperienced private agents lacking the required funds for the exercise. This action is not only unconstitutional but in the process, NNPC effectively transferred income in excess of $2.8 billion from public assets into private hands.
viii. The bulk of oil theft, bunkering and illegal refining has been happening recently, between 2010 and 2013, and is estimated to incur losses of between $6.5 and $12 billion.
The removal of Sanusi Lamido Sanusi as CBN Governor has clearly taken place because of these bold acts in exposing and challenging corruption. The other intended purpose of the removal is for the Presidency to establish a firm and direct control over the CBN, which could spell doom for our economy.
THE IMPORTANCE OF CENTRAL BANK AUTONOMY
The CBN Act provides for the autonomy of the Institution so that the desperation of political actors does not affect its effectiveness in protecting the economy. Today it is part of international best practice to ensure that a President cannot wake up one morning and remove the Governor of the Central Bank. If President Jonathan is allowed to get away with this act of illegality, the future of our economy could be very bleak.
We can illustrate the danger by reminding ourselves about the Ugandan case. In 1971, Idi Amin Dada, Uganda’s famous dictator ran out of money to run the Government.
He was furious when he was told he could not just print money through the Central Bank and continue his spendthrift promotion of his megalomania. He reminded everybody that he was the boss and ordered the Central Bank to print more money. This action of course caused massive inflation and led to the collapse of the economy. It is widely believed that Idi Amin subsequently ordered the assassination of the Central Bank Governor, Joseph Mubiru who had told him that it was unwise and dangerous for people with power to toy with the Central Bank. It was easy to kill Mubiru but impossible to address the problems caused by interfering with the Central Bank. The prices of goods soared while essential commodities simply disappeared from the market.
N-Kalalyst believes that the monumental corruption unveiled by the CBN Governor, Sanusi Lamido Sanusi, should be turned into an opportunity to create a tipping point for zero tolerance to corruption and for the institutionalization of transparency and accountability in our public life. We therefore make the following demands:
1) Immediate Re-Instatement of the CBN Governor Sanusi Lamido Sanusi
We must challenge the desecration of the laws of our country by its Chief custodian. We call on the Senate to view the so-called suspension of the Governor as a naked usurpation of its powers and privileges. The Senate should immediately reverse the decision and draw the attention of the President to the fact that our Constitution imposes a regime of separation of powers and the President cannot and should not usurp the powers of Senate.
2) Ending Impunity for the NNPC Cabal
Public corruption has run out of control in Nigeria. We are recent witnesses to the police pension scam and the unbelievable spectacle in the House of Representatives on the power probe where it was discovered that over $16bn was spent to provide electric power without commensurate results. We are looking at a pattern of organized looting of our national resources emanating from the Executive Branch.
It continues because Nigerians do not stand up to fight and hold their leaders accountable for their actions. It will not be enough to insist that the culprits be prosecuted and punished.
We must begin this fight by demanding the following:
i. All persons and institutions that have been involved in the fuel and kerosene subsidy scam should be investigated and prosecuted. These include, but are not limited to, the Ministers of Petroleum Resources and of Finance; the Board Members, MD and Management of NNPC; the Board Members and Executive Secretary of PPPRA; the Director of DPR and all public officials indicted in the Report by the House of Representatives Ad hoc Committee.
ii. The freezing of the accounts and recovery of all illegal payments made to the Petroleum marketing firms, the NNPC, PPPRA and others, which were earlier revealed by the findings of the House Committee, amounting to N1.2 trillion or $6.8 billion.
iii. The immediate suspension of the Minister of Petroleum Resources, Diezani Alison-Madueke, as she awaits prosecution for her crimes against the Nigerian people.
N-Katalyst commits itself to push these demands by exerting maximum pressure on the Federal Government to take action.
3) Getting the Judiciary to do its Work
The spectacular failure of recent high profile criminal prosecutions relating to corruption dramatizes the collapse of the system of public prosecution in Nigeria. Public prosecution rests on a tripod – the detection and investigation of crime, the prosecution of offenders and their conviction and punishment. All levels are in crisis due to the appointment of successive Attorney Generals who see themselves as the President’s henchman rather than an independent and impartial officer of the State determined to advance the cause of justice. There is no political will at the very highest echelons of authority to fight corruption in the country.
Already, the Attorney General of the Federation and Minister of Justice, Mohammed Adoke (SAN), has shown no will to fight corruption. While we are conscious of the fact that government must be guided by the dictates of the rule of law and due process, the message we get from the Presidency is that they are in no hurry to identify and prosecute the culprits of this mega corruption.
The President must come out openly and show commitment to ending impunity by:
i. Immediately terminating the appointment of the Attorney General Mohammed Adoke, SAN and appointing a credible Attorney General who has the skills and the will to combat and prosecute corruption.
ii. Announcing a time frame, not exceeding six months, for implementing the recommendations of the various Committee reports that have demonstrated wide scale fraud in the petroleum industry and commencing the prosecution of all indicted officials and all persons who benefitted, colluded or participated in the corruption scandal.
4) Restructuring of the Petroleum Sector
The structural conditions allowing the continued monumental fraud in the Petroleum sector arise from the fact that the NNPC remains the regulator, main producer and marketer of petroleum and its products, both upstream and downstream. It is a clear conflict of interest that has allowed the organization to become a behemoth with no respect for laws and processes.
There is a need for deregulation so as to stop NNPC from regulating the downstream sector. Oil Minister Diezani Alison-Madueke has a conflict of interest in being both on the board of NNPC – a fuel importer – and the supervisor of the subsidy regulator, the Petroleum Products Pricing and Regulatory Agency (PPPRA).
We demand as follows:
i. A Judicial Commission of Inquiry should be established into the operations of the Petroleum Ministry and NNPC.
ii. The management and board of NNPC should be overhauled and those involved in any infractions should be investigated and prosecuted. The company should be unbundled to make it more transparent and efficient.
iii. The passage, within a maximum of three months, of the original, undiluted Petroleum Industry Bill.
5) Citizen Engagement
N-Katalyst is aware that Government will not act if citizens do not mount sufficient pressure. We Nigerians must learn to act more as citizens and not as subjects. The country belongs to us all and we can no longer leave the political space to corrupt politicians and bureaucrats. The fight against corruption must be comprehensive and all encompassing; all sections of the society must stand up and fight until we bring this monster under control.
i. Pressure should be mounted on Government to engage the participation of citizens in the formulation of a plan of action towards ending impunity and corruption in our national life, including the possibility of making corruption a capital offense.
ii. N-Katalyst commits to working with other civil society groups to ensure that these demands are met.
Dr. Jibrin Ibrahim, Dr. Otive Igbuzor
Saudatu Mahdi, Dr. Ayesha Imam
Ayisha Osori, Idayat Hassan
Yemi Candide-Johnson SAN, Ayo Obe
Dr. Charmaine Pereira, Saka Azimazi
Maryam Uwais, Yusufu Pam
Prof. Kyari Mohammed, Mustapha S. Hanga
Bashir Yusuf Ibrahim, Nasir El Rufai
Auwal Rafsanjani, Hassan Hussaini
Dr. A. S. Mohammed, Prof. Nsongurua Udombana
Asma’u Joda, Nsirimovu Anyakwee
Fatima Balla, Martin Obono
Dr. Hussaini Abdu, Aisha Oyebode
Hubert Shaiyen, Dr. Arabo Ibrahim Bayo
Yusuf Baba Ahmed, Y. Z. Ya’u
Dr. Bibi Bakare-Yusuf, Mohammed Hasheem Abubakar
Mohammed Bello Abdulhameed
N-Katalyst, is a non-partisan network of individuals with deep views on the promotion of Nigerian unity and progress.