|Jonathan & Sanusi|
The outspoken Mr Sanusi courted a stormy end to his tenure, due to finish in June, by accusing the state oil company, the Nigerian National Petroleum Corporation (NNPC), of failing to remit $20 billion in revenues to government accounts. The ministry of finance puts the figure at $10.8 billion. Mr Jonathan says he suspended Mr Sanusi because of “financial recklessness and misconduct” and “far-reaching irregularities” at the bank. But the decision came just days after Mr Sanusi presented detailed evidence to a Senate committee investigating alleged fraud and mismanagement at the NNPC. Most concluded that the suspension was politically motivated.
Investors are spooked, interpreting the decision as a sign of the authorities’ lack of stomach for fighting corruption. Already, $2 billion of the $9 billion in foreign cash invested in Nigerian bonds has moved out; bankers predict more will follow. The naira plunged to an all-time low of 169 to the dollar on February 20th. Sarah Alade, a highly regarded technocrat who will run the bank until June, has pledged to continue to support the currency. But the foreign-exchange reserves she needs to do so have fallen by almost 14% from 12 months ago.
The controversy has a strong political tinge. The Senate’s investigation was prompted by a leaked letter from Mr Sanusi to the president in which he accused the NNPC of violating the law. This put him in conflict with Diezani Alison-Madueke, the petroleum minister and a close ally of Mr Jonathan’s. The NNPC has repeatedly denied the allegations. Ngozi Okonjo-Iweala, Nigeria’s finance minister, says an independent audit must establish the truth. Many see her outspokenness as a sign she doubts that Mr Jonathan will hold a credible inquiry. “The key question we need answered is what is the correct amount,” she says. “We need urgent action to bring this to the fore.”
Mr Sanusi’s treatment undermines confidence that this will happen. It is not the first time there has been scrutiny of the NNPC, part of a rotten oil industry whose leakages undermine Nigeria’s macroeconomic stability. Eighteen months ago the former anti-corruption tsar, Nuhu Ribadu, claimed tens of billions of dollars in oil-and-gas revenue had been siphoned off in 2002-12. The president ordered three reports into it, but they never saw the light of day—if they exist at all—and no one was prosecuted. Months later the Nigerian Extractive Industries Transparency Initiative, part of a global lobby for transparency in natural-resource revenues, revealed a leakage of more than $9.8 billion in 1999-2008.
Mr Sanusi’s suspension has also provided ammunition for Mr Jonathan’s political opponents in the run-up to the elections in 2015. The All Progressives Congress, the main opposition party, described it as “the clearest indication yet that President Jonathan…is willing to silence any whistle-blower”. Although acclaimed abroad, Mr Sanusi has a mixed reputation at home. He tackled widespread financial fraud and overhauled Nigeria’s banks during a banking crash in 2009. He has stabilised inflation in single digits and cracked down on money-laundering. But his staff say he has dragged the bank into politics. His blunt outbursts criticising Nigeria’s governance propelled the legislature to propose a bill (which failed to pass) compromising the bank’s independence. Some accuse him of having political ambitions of his own.
The Senate is due to confirm Mr Jonathan’s new choice of governor, Godwin Emefiele, who heads Zenith, a private bank. He is expected to keep quiet and stick to tight monetary policy. “He is hardly seen nor heard—a typical attribute of the central banker the Nigerian establishment prefers,” says Oluseun Onigbinde, an economist at BudgIT, a start-up that publishes Nigerian economic data on social media.
Investors want the stability that came from Mr Sanusi’s policies and which Mr Emefiele supposedly seeks. But they are losing faith in Mr Jonathan’s administration. Thanks to its vast oil-and-gas reserves and the vitality of its 170m people, Nigeria remains hugely attractive. But Mr Sanusi’s tumultuous exit is another instance of the country’s squandered potential."