Who Takes Sanusi’s Job

Fri, Mar 29, 2013

By publisher

4 MIN READ

The race for Sanusi Lamido Sanusi’s job as CBN governor begins as the incumbent says he is not interested in a second term

|  By Maureen Chigbo  |  Apr. 8, 2013 @001:00 GMT

WITH the tenure of Sanusi Lamido Sanusi, governor of the Central Bank of Nigeria, CBN, ending June 2014, speculations are rife as to whether the governor will be re-appointed. But Sanusi has taken it upon himself to inform Nigerians that he is not in the race for CBN governorship anymore. His reason is that he informed President Goodluck Jonathan as far back as 2011 that he would not be interested in seeking a second term. “I informed the president going back in 2011 that I would not be interested in serving for two terms,” Sanusi told Bloomberg,  a United States-based news agency recently adding: “the job has been done, largely.”

Sanusi has more than one year still to finish up his assignment. If he leaves, he would largely be judged by how weak or strong the banking sector is. Most Nigerians would like to know if Sanusi left the industry stronger than he met it or vice versa. For now, reactions to Sanusi’s tenure in office depends on which side of the divide one is. Those who are pro-Sanusi will definitely cite good reasons to convince skeptics that the CBN governor has left his feet on the sands of the banking sector.

The sanitisation of the systemic defects in the banking sector which bordered on poor corporate governance in the banking industry is one example. There is, of course, the sacking of the managing directors of the banks that were found wanting. Also, some of the key indices to analyse the economic scenario will revolve around interest rate, lending rates, and the management of our foreign reserves. The interest rate is still double digit which will not earn the CBN governor any high marks. The reserve which went down previously, is now on the upward swing and could fetch scores for the apex bank boss.

But when you look at the lending rates, especially to the real sector, the pendulum will automatically swing down and will even become more erratic when the interest rate is put on the scale. The argument is that manufacturers have not fared better under the banking regime of the controversial Sanusi as the CBN governor. Some of the controversies had to do with the infamous donation of N100 million to Bomb Blast victims in Kano, his home state, and another N25 million to those affected by the Madala Bomb blast. Apart from controversies, Sanusi has had an unsavoury ding-dong relationship with the National Assembly.

However, Sanusi, is not unduly worried over criticisms of poor performance during his tenure. He said categorically that he would not seek renewal of tenure as he considers a single term enough to make a lasting positive impact in the financial system and the economy in general. On the issue of retention of the 12 percent Monetary Policy Rate, MPR, which serves as the benchmark for interest rate, Sanusi said: “My own inclination is to just hold and just continue doing what we’re doing, because it has worked very well. But I’m only one vote in the Monetary Policy Committee and as you can see, the votes to ease are beginning to increase. More MPC members may follow by voting for rate cuts”.

The CBN governor cautioned on the quest for low interest rate because “the impact of interest rates below inflation could be “horrendous” for economic stability; so in the short term, the country has to live with high rates.” On inflation, Sanusi said “our own forecasts don’t show us getting back to the kind of 12 to 13 percent levels we saw last year. “Inflation is where we’d like it to be, exchange rates are stable, reserves are heading upwards and will soon cross $50 billion.”

On the foreign exchange market, Sanusi said that “unless there’s some major external shock, the foreign- currency market looks to me one in which we can have stability.” He noted that the bank has enough reserves to defend the naira and “keep it where we want.”  It would be recalled that the House of Representatives passed a resolution on February 20, ordering its committee on banking and currency to request the Central Bank to lower its policy rate to below 10 percent to encourage borrowing and investment.