Tested, But Not Trusted
by
When Ogbagi, Akoko, Ondo State-born Chief Joseph Oladele Sanusi was appointed Governor of the Central Bank of Naira (CBN) in May 1999 by newly sworn-in President Olusegun Obasanjo, very few took an exception to his age. Then a few months shy of 61, Sanusi's explosive career run as a tested banker promised a breath of fresh air into the apex bank that had been subject to a lot of abuse by the military under his immediate predecessors Alhaji Abdulkadir Ahmed and Dr. Paul Ogwuma. The veteran banker who is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and Chartered Institute of Bankers (CIBN) was managing director and chief executive officer of First Bank of Nigeria PLC for six years (1992 to 1998). He had also served in the same capacity at United Bank for Africa PLC (UBA) from 1990 to 1992.
Sanusi's tenure at First Bank witnessed significant automation of the bank's activities. His period also saw an enhancement of the bank's pension scheme and greater impetus for agricultural projects. It was under Sanusi that the bank signed an agency agreement with Western Union Financial Services Incorporated, U.S.A which heralded the Western Union Money Transfer scheme into the Nigerian financial system. Other landmarks recorded under him include the establishment of the Kakawa Discount House in conjunction with a consortium of banks and several endowment programmes. When he was retired from First Bank in 1998, he moved to midwife the comeback of Standard Chartered Bank, a foreign financial outfit which he would have served as chairman.
Sanusi's appointment as the fifth governor of the CBN caught several persons unaware. His name had not featured in the list of people touted as possible successors to Dr. Ogwuma. That list had Malam Ismaila Usman, Professor Dotun Phillips, Mr. Pascal Dozie and Mohammed Hayatudeen. His appointment was, however seen by many as a measure of the Obasanjo administration pledge to instill financial discipline into the banking sector bearing in mind his 33 years experience in both the public and private sectors of banking.
His first sojourn with public banking began in 1966 when he was appointed as deputy manager (accounts) with the CBN. Like a typical public officer, he rose through the ranks serving at different times as accounts manager, assistant chief internal auditor, deputy chief of banking operations, executive director (monetary and banking policy) and finally deputy-governor, just a step away from the governor's seat.
Despite his achievements in both public and private sector banking, many observers criticised his appointment as CBN governor by Obasanjo as an extension of gerontocratic rule. The global trend was in favour of younger and more dynamic professionals who are very pro-active to rapid changes that characterise Twenty-first century world economy. His achievements at First Bank notwithstanding, many still considered him a conservative who would soon fall victim of the environment of his new office. At 61 when he was appointed, he was just young enough to start savouring the sweet taste of retirement. Now some months short of 63, Sanusi's two-year tenure in the CBN has proved many of his critics right.
The apex bank has been unable, under Sanusi, to come up with policies that will redress the poor state of the Nigerian economy. The CBN has been unable to identify particular panacea for the dwindling fortunes of the naira, rather its policies have been directed at the symptoms of the problems. Recently, there have been a flood of calls for the resignation of Sanusi for the bank's flawed programmes. According to Lagos lawyer, Mr. Fred Agbaje, the bank's leadership is bereft of any magic to turn the declining value of the naira around. The recent review of minimum Rediscount Rate (MRR) from 15 per cent to 16.5 per cent, Cash Reserve Ration (CRR) from 11 to 25 per cent and liquidity ratio from 35 to 40 per cent primarily to mop excess liquidity in the banking sector is a wrong-headed decision. This according to banking experts is because the excess funds causing the problem identified by CBN are actually outside the banks. The CBN's new policy has only led to a sky high increase in inter-bank lending rate from 29 per cent to as much as 50 to 55 per cent. The introduction of the CBN certificate between the range of 10 to 20 per cent has also been fingered as adding "another dimension to the destabilisation in monetary management".
Sources in the financial sector informed us of how Sanusi scuttled the attempt by Obasanjo to bring down the interest rates. The President had approached leaders of the banking and finance industry to help the government in bringing down interest rates. As the banking industry started to respond favourably, interest rates actually dropped to about 15 per cent. But the introduction of the CBN Treasury Bills at 20 per cent, five points above what the bankers were charging led the rate to eventually jump to 22 per cent.
The inability of managers of the naira, especially the banking sector has made it a lot easier to engage in the business of currency speculation rather than invest in a company whose future is rather blighted. As it is, the demand for foreign exchange keeps rising forcing the CBN to constantly devalue the naira.
Determined to shut the gate of financial management to younger professionals with the energy and presence of mind to do business at the speed of thought, the CBN on 4 January this year came out with an infamous directive prescribing the number of years a person must spend in the banking profession before he can be promoted to certain key positions. By simple calculation, no young person, by the CBN guidelines can become the managing director of a bank until the age of 42. The Sanusi-led CBN argument is that the move will discourage on endogenous factors that plague the banking sector such as "inept management, abusive ownership and self-serving insider dealing'. When banks have done well under young chief executive officers, the CBN consider that the exception to the rule because the apex bank reckons only veteran bankers have the presence of mind to stem distress. It does not matter that the younger bankers are usually more dynamic and pro-active. Sanusi is not complaining. He became the managing director of UBA when he was a young man of 52. It does not even matter that under him, now 63, the naira continues its free-fall; exchanging for 139.40 a dollar and 198.50 to a pound at the beginning of this week.
At least his signature still appears on the currency, battered as it may be. Besides, the CBN is introducing bigger naira denominations. Sanusi's CBN has also begun plans to redesign the nation's coins which it intends to introduce later in the year.