TASKS BEFORE THE NEW CBN GOVERNOR

MR. Sanusi Lamido Sanusi was two weeks ago confirmed by the Senate as the new Governor of the Central Bank of Nigeria (CBN). This followed his nomination by President Umaru Yar’Adua to succeed Professor Chukwuma Soludo who completed his five-year-term at the helm of the country’s apex bank on 28 May, 2009. The appointment of the new governor ended months of speculations about whether Professor Soludo’s term would be renewed as well as the jostling for the plum position by many Nigerians.

WHO is Sanusi and where is he coming from? Mr. Sanusi is a Kano Prince and until his appointment, he was the Chief Executive Officer of the First Bank of Nigeria, plc. In fact, Mr. Sanusi became the Managing Director/Chief Executive Officer of First Bank only a few months ago after succeeding Mr. Jacob Ajekigbe, who retired from the bank. Mr. Sanusi’s rise in the top executive positions in the financial sector has been quite rapid. A few months ago, he was a General Manager with UBA Plc. He then left to join First Bank, Plc as an Executive Director, Risk Management, from where he rose to become the MD/CEO and now barely five months after his appointment as MD/CEO, he has become the Governor of the CBN.

TO be sure, Mr. Sanusi’s background as an Economist and years of experience in the banking world will be useful in his new position. He is a 1981 graduate of Economics from the Ahmadu Bello University, Zaria. He also holds a degree in Islamic Law from the International University of Africa, Khartoum, Sudan. He also holds an MBA degree.

MR. Sanusi’s appointment has generated mixed reactions from Nigerians for several reasons. First, is his background. Coming from Kano State, Mr. Sanusi’s appointment leaves the nation’s financial and economic management in the hands of one region of the country—the North-West. Both the Finance Minister and the Minister of National Planning are from Kano State, while the Economic Adviser to the President is from Katsina State. In fact, most strategic sectors and ministries are now consolidated in a particular section of the country.

THE second reason is because of the visible and respectable profile that the CBN has garnered under the former governor, Professor Soludo, clearly lifted the profile of the CBN and made it an important force in economic management policy of the country. Under his tenure, for the most part, Nigeria witnessed a fall in interest rates, the exchange rate was stable, foreign reserves rose appreciably and even inflation rate declined to a single digit. He also launched a number of high profile policies, such as the banking consolidation, the Financial Sector Strategy 2020, among others. Internationally, the CBN was also well respected and Professor Soludo, as the Governor, became the face of Central Banking in Africa. Of course, he also made a number of high profile mistakes along the line.

HENCE, Mr. Sanusi will be stepping into big shoes and high expectations. No doubt Nigerians are willing to give Mr. Sanusi the benefit of the doubt. We hope that he will take the CBN to a higher level than he met it and will not compromise his decisions in order to return the favour for his appointment or strictly to balance perceived regional imbalance in the implementation of past policies of the CBN. We hope in reviewing the past policies of the bank, he will build on those that have been adjudged to have strengthened the financial sector like the banking consolidation.

SOME areas which the new governor will have to quickly address include the falling value of the Naira. The sharp decline in the foreign exchange rate of the Naira in the past few months has partly been traced to the CBN’s lack of a clear strategy on the way to respond to the decline in government foreign exchange earnings. Several banks latched unto this to make brisk businesses through round-tripping of foreign exchange from official to the parallel market. The CBN actually detected this and promised to deal with erring banks. However, these banks have learnt to take CBN threats for what they are—empty threats. We are not aware of any commercial bank in Nigeria that has been dealt with publicly for contravening the CBN regulations.

THE new governor must maintain strict discipline over the banks. There are currently many sharp practices by the banks. Very few discerning Nigerians actually believed the reports presented by the banks or the various bogus claims about their size and clout. Nigerians want a regulator that will protect their interests and that will ensure that the statements of accounts of the banks are solid and transparent. In particular, Mr. Sanusi should enforce CBN’s directive requiring all banks to have a common end of year for the purpose of publishing their statements of accounts.

THE integration of the monetary and real sectors of the economy is also very important. The banks should be more responsive to the yearnings of the real sector. As elementary monetary economics teaches, growth in the banking sector without a corresponding growth in the real sector, is simply a bubble. The CBN governor must also tackle the problems of high inflation and high interest rates. These are the two greatest enemies of economic growth. He must be firm in ensuring that monetary policy is not used to accommodate fiscal recklessness. The development objective of the CBN in a developing country like Nigeria is also very paramount.

WE hope that at the end of Mr. Sanusi’s term as the CBN governor, we will be able to look back and say that “he came, he saw and he left his positive marks on the Nigerian economy”.

SHOOTING EXERCISES AT ODOGBO

RESIDENTS of about 100 communities and the Second Mechanised Division of the Nigerian Army, Odogbo in Ibadan, appear to be friendly now. Before now, the communities had complained bitterly about shooting practices at the Adekunle Fajuyi Barracks Shooting Range in the area.

THE communities had alleged and claimed that the shooting practices of the army had caused loss of lives, disruption of commercial activities and destruction of property in the area. They clamoured for a relocation of the shooting range, alleging that live bullets during shooting exercises, often went beyond the target, destroying house roots, disrupting social and economic activities. In worst cases, killing and maiming of human beings were alleged.

THE army authorities used to ignore the allegation, saying that the complainants were encroaching on their land. However, the communities recently sent a letter of appreciation to the new General Officer Commanding of the division, thanking him for the interest he showed on their plight. The GOC had dispatched a team to the area following a representation to him by the communities.

AS a result of the representation, the GOC was reported to have halted further shooting exercises. He also assured the complainants that the army authorities will explore options that will guarantee the safety of the communities.

IT is good that the Second Mechanised Division is sensitive to the plight of its neighbours. There are so many advantages in good neighbourliness.

BUT is it possible for the division to stop shooting exercises? This is where the GOC has to find a practical and feasible solution to the problem. As long as shootings take place in the area, the communities will always cry out. It is a logjam that has to be resolved in the interest of the two parties.