Sanusi: Nigeria’s President Should Not Double As Petroleum Minister

The 14th Emir of Kano, Muhammadu Sanusi II, has said the idea of the president doubling as petroleum minister was not good enough, as it hindered constructive criticism of the oil industry.

The former Governor of the Central Bank of Nigeria (CBN), who spoke at the opening of the 2023 Bank Directors’ Summit in Abuja, also called for the Nigerian National Petroleum Company (NNPC) Limited to account for the dollar inflows from its operations.

Nigeria has adopted the petroleum minister’s role for the president as an unwritten tradition since the inception of the Fourth Republic in 1999. However, Sanusi said that was bad for the industry that formed the mainstay of the country’s economy, as it created a situation where, “Nobody can talk; they say you are attacking the president.”

Commenting on the current fiscal and liquidity change, Sanusi doubled down on his call on the NNPC to give account of the dollar inflows from its operations.

He emphasised the need for NNPC to give account of dollar inflows from its operations, querying, “Where are the dollars? Ask NNPC.”

Sanusi said that was the same question that cost him his job as CBN governor, adding that he would continue to demand answers until NNPC was properly reformed or “till I die”.

He said the current fiscal challenges resulted partly from the inability of revenue agencies to account for their stewardship transparently in order to reduce revenue leakages.

The former CBN governor particularly blamed the central bank’s overdrafts on the federal government through “Ways and Means” for the country’s high inflation and FX woes.

He queried the National Assembly for reneging on its oversight functions and allowing the previous administration of the apex bank to exceed the five per cent lending threshold to the government without first amending the law.

Sanusi described NNPC as the opaquest institution in the world, stating that to achieve FX stability “you must follow the money as we asked in 2014”. He said so much attention was being focused on the CBN, and no one was demanding answers regarding N11 trillion subsidy payment without accountability.

He criticised the ongoing advocacy by the banking industry for stoppage of AMCON levy.

Under the Asset Management Corporation of Nigeria (AMCON) Act, banks are required to contribute an equivalent of 0.5 per cent of their total assets, plus 0.5 per cent of all contingent assets as of the preceding year-end to AMCON sinking fund in line with existing guidelines.

But the non-refundable contribution, which is for 10 years effective 2013, and with no ownership interest, had been the subject of controversy in recent times. While, on the one hand, government actors called for an increase of the levy, the banking sector advocated its stoppage.

But, the former CBN governor said, “I don’t support the removal of AMCON levy.”

He said the government had spent a lot of money to bail out banks in 2005, adding, “If we had not bailed those banks, all of you would have gone underground”. He explained that CBN pumped in N50 billion during the bailout and hoped to recoup the money from the banking sector.

Sanusi argued that taking the levy off the banks could pass the burden to taxpayers. He also said any move to remove the independence of CBN and subject it to political manipulations could be dangerous for the economy.

He stressed that the CBN Act remained one of the best laws in the world and added that the solution was not in changing the bank’s law but ensuring its implementation.

Sanusi challenged the boards of banks to pay more attention to stopping loans from going bad and improving risk assessment. He said as the first line of defence, the boards must focus on the quality of risk management, set the guidelines, and follow up.

Sanusi said the boards should be up and doing, and decried a situation where the management teams called the shots for the former. He warned that jettisoning regulation could lead to the collapse of the banking sector, as recently witnessed with the Silicon Valley Bank in the United States, where lax regulations were fingered.

Sanusi said trust and integrity, among other things, remained crucial in the banking industry.

James Emejo