• Sunday, December 10, 2023
businessday logo


CBN governor says he won’t seek second term


Sanusi Lamido Sanusi, governor, Central Bank of Nigeria (CBN), who rescued the banking industry from near-collapse four years ago, said he won’t renew his contract when it expires in 2014.

Sanusi, who has led the apex bank since June 2009, said it was never his intention to stay longer than one term. He was speaking in an interview with CNBC Africa in Abuja.

Appointed in the midst of a debt crisis, Sanusi, 51, fired the chief executives of eight lenders within four months of taking office after an audit found evidence of mismanagement and reckless lending. He’s pushed for stability in the currency and helped bring inflation down below 10 percent, while at the same time antagonising lawmakers by criticising their spending and courting controversy for his outspoken views, most recently on China’s role in Africa.

“That quality of character, that boldness is a quality that will be difficult to find amongst policy makers in Nigeria,” Bismarck Rewane, chief executive officer of Financial Derivatives Co., said by phone on Wednesday.

Sanusi led the Monetary Policy Committee in increasing the benchmark interest rate by six percentage points to a record 12 percent from September 2010 to October 2011 to bolster the currency and curb inflation.

The government should name his replacement soon to help ease investors’ concerns and manage the transition, said Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd. In 2009, former President Umaru Yar’Adua didn’t name Sanusi as a replacement to Chukwuma Soludo until two days before his term ended. 

 The naira fell 0.2 percent to N158.95 per dollar by 3:32 p.m. in Lagos, taking its decline this year to 1.8 percent, according to data compiled by Bloomberg. Yields on Nigeria’s $500 million of Eurobonds due January 2022 fell 10 basis points, or 0.1 percentage point, to 4.23 percent.

“He has a strong personality and a lot of people invested in the country just because of the personal relationship and the trust in Sanusi, and the confidence that Sanusi inspires,” Gadio said by phone from Lagos.

Policy makers kept the interest rate on hold on Tuesday even as they face rising calls from businesses and the finance ministry to lower borrowing costs to spur investment. Sanusi told reporters in Abuja on Tuesday a rate cut “could send wrong signals of a premature termination of an appropriately tight monetary policy stance.”

Finance Minister Ngozi Okonjo-Iweala said in July record interest rates that pushed up commercial bank rates to about 20 percent were making it difficult for businesses to borrow.

Sanusi hasn’t shied away from controversy. In December 2010, lawmakers demanded Sanusi apologise for saying a quarter of the government’s spending on overheads went to parliament and that was damaging for the economy. He refused, saying his estimates were correct.

Last year, lawmakers attempted to curtail the bank’s powers by proposing an amendment to the Central Bank of Nigeria Act that would strip Sanusi of his position as chairman of the bank’s board. They also pushed to include more external members on the board and have parliament approve the bank’s budget.