Sanusi and His Missing $20bn Charade

I spent most of last week studying the report of the Senate Committee on Finance on the alleged missing $20 billion (which later became $49.8 billion) from the federation account. The erstwhile governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi had raised the alarm last year, throwing the nation into crisis. He alleged that the Nigerian National Petroleum Corporation (NNPC) had failed to remit $49.8 billion to the Federation Account over a 19-month period.

This was contained in a letter he wrote to President Goodluck Jonathan in September last year. In the heat of the crisis, many had alleged that Sanusi was working for the opposition, and that his motive was simply to bring down the Jonathan administration. On the face of it, the allegations by sanusi looked ridiculous and vindictive, but I felt I should wait for the outcome of the Senate’s investigation before making my views known. That was why I spend days going through the Senate Finance Committee’s report when part of it became public last week.

I took my time to read the report and at the end of the day, I was left depressed and dejected. I was so angry that an officer of the level of Sanusi could make such mischievous allegations that left many Nigerians sick and worried.
Now, let’s take a critical look at some of the high points of the Senate committee’s report as published by a leading national newspaper last week. First, the committee cleared the NNPC of any wrongdoing, saying neither $49.8 billion nor $20 billion was missing from the federation’s account. The Ahmed Makarfi-led committee also said it could not reconcile how the former CBN governor arrived at the said amount.

It said it found that the CBN, NNPC, Ministry of Finance and Ministry of Petroleum Resources had reconciled $47 billion of the unaccounted for revenue, which it said had been remitted into the Federation Account.

The committee’s report as published by the leading national newspaper reads further: “The committee could not see how the figure of $49.8 billion was arrived at by the CBN governor for instance. The CBN governor at the first hearing had put forward the figure of US$12 billion as monies to be reconciled and changed his position to US$20 billion at subsequent hearing. At the conclusion of his written submission, he posited that it could be US$20 billion, US$10.8 billion or anything in between.”
On the alleged unremitted $20 billion, the 73-page report, however, said it found that the sum of $218.0 million was considered as the Federation Account’s share of third party financing that was still in dispute.

It also noted that another sum of $447.8 million, which it described as the Federation Account’s share from the $6.815 billion listings by NNPC on behalf of the Nigeria Petroleum Development Company (NPDC) remained in dispute.
Also in dispute, according to the report, is $262 million which the committee described as expenses incurred by the NNPC in respect of holding strategic reserves and pipeline maintenance and management cost/capital expenditure.

The committee therefore asked the corporation to refund the $262 million into the Federation Account, saying it could not satisfactorily defend it.
The report also said the total kerosene subsidy paid but not appropriated for by the National Assembly between 2012 and 2013 was $4.430 billion adding, however, that the amount might exceed this figure because the certification by the Petroleum Products Pricing Regulatory Agency (PPPRA) for the period was on an interim basis.
On the expenditure incurred by the corporation on subsidy which was not captured by the Appropriation Act, the committee advised President Jonathan to prepare and present to the National Assembly a supplementary budget “to cover the expenditure in the sum of N90.6 billion for PMS (premium motor spirit) subsidy 2012 and the sum of N685.910 billion for kerosene subsidy expended without appropriation by the National Assembly.”

I kept the above report as published by the national newspaper by my bedside for days and read it over and over again.
My conclusions: It is obvious that Sanusi, under the influence of the opposition was actually out for mischief. His allegations, which lacked substance was fabricated to bring down the Jonathan administration. His figures kept changing. How can a man at that level claim that he does not know the process for reconciling lodgements into the federation account? Is it possible for a man who has been managing director of a key bank to display such naivety about remittance into the federation account by the NNPC? From day one, there was so much inconsistency in his allegations.

Sanusi first alleged that the NNPC had failed to remit $49.8 billion to the Federation Account. But while appearing before the committee in December 2013, Sanusi later alleged that of the initial $49.8 billion said to be unaccounted for, NNPC only failed to remit $12 billion; he was later to revise it to $10.8 billion, before revising the amount for the third time to $20 billion. He was obviously under the influence of some people.
I thought by now, the former CBN governor should be apologizing to Nigerians for misleading them. I am surprised that he is still running from one court to another, looking for God-knows what. It is a shame that a man of his caliber could descend so low. I am surprised that he is still walking free across the nation. He has a lot of explanations to make about the missing money issue. It is in his interest to start making them now.
Running from one court to another would not help him. It would only delay the Judgement Day. First, he has failed to regain his seat through the court. He had challenged his removal as governor and sought reinstatement by suing the president, and the Attorney-General of the Federation and the police, asking the court to declare his suspension by the president null and void. Unfortunately, for him, the court sent case to the industrial court.
Sanusi also filed a suit to stop the Financial Reporting Council from investigating him for which he got a reprieve as the trial judge on May 12 ordered the FRC to stop investigating him. The FRC has however appealed the judgment.
The way forward for Sanusi is a very simple one. He should first withdraw all his funny suits in court and simply stop dancing naked in public. Thereafter, he should apologise to Nigerians for misleading them and then address issues raised in the FRC’s report.
Rather than address his indictment in the report of the Financial Reporting Council of Nigeria on the Audited Financial Statements of the CBN for the year ended 31st December 2012, Sanusi has been playing politics and running from pillar to post, trying to get one court injunction or the other
Sanusi’s indictment is grave. It is pertinent to take a dispassionate second look at the FRC report for us to really understand the magnitude of the case against Sanusi. The report reads partly: “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 (IFRS) 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.
“The provisions of the Memorandum of Understanding (MoU) signed by the CBN and other Deposit Money Banks (DMBs) 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 the approval of the said BOT.
“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 or company, unless an entity set up by the approval of the authority of the Federal Government, CBN in 2010, acquired 7% shares of International Islamic Liquidity 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.
“The CBN had an additional brought forward to General Reserve Fund of N16.031 Billion in 2012 but proceeded on a voyage of indefensible expenses in 2012 characterised by inexplicable increases in some heads of expenditure during the year. Examples include:
(i) The bank spent N3.086 billion ‘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; (ii) The CBN claimed to have expended N20.202 billion on ‘Legal and Professional Fees’ in 2011, beyond all reasonable standards of prudence and accountability; (iii) Between expenses on ‘Private Guards’ and ‘Lunch for Policemen’, the CBN claimed to have spent N1.257 Billion in 2012; (iv) 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 remuneration to Auditors, the Bank has consistently observed this provision in the breach and even went to the extent of changing one of its Joint External Auditors without notifying the office of the President.
“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 a total of 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 transaction with all clients (including the CBN).”
How could the CBN under Sanusi spend about N1.3 billion on private “security guards and lunch for policemen? The external audit further revealed balances of sundry foreign currencies without physical stock of foreign currencies in the CBN head office and questionable write-off of N40 billion naira loans of a bank.
These are just some of the grave infractions unmasked by the external auditors, which clearly shows recklessness and gross incompetence which characterised the operations of the CBN under Sanusi.
One would have expected him to take up the issues one by one and address them. Rather, the former CBN governor has been busy making reckless and unguarded statements. This is an insult on Nigerians and this should not be allowed to continue. The CBN under Sanusi obviously carried out its functions in a manner characterised by disregard for due process and accountability.
Bakura is a Lagos-based journalist and public affairs commentator.


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