Nigeria suspends central bank chief for financial recklessness

Updated 20 February 2014
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Nigeria suspends central bank chief for financial recklessness

ABUJA: Nigeria suspended the central bank governor on Thursday for alleged financial recklessness after he accused the state oil company of misappropriating $20 billion (14.5 billion euros) of public funds.
Lamido Sanusi, whose term was due to expire in June, became embroiled in controversy after he charged the Nigerian National Petroleum Corporation (NNPC) with gross mismanagement and corruption.
A statement from President Goodluck Jonathan's office said probes into Sanusi's performance revealed that his "tenure has been characterized by various acts of financial recklessness and misconduct".
It announced his "immediate suspension" as the central bank boss. He is to be replaced by the bank's most senior deputy governor, Sarah Alade.
Sanusi has alleged that Nigeria lost out on $20 billion between January 2012 and July 2013 partly related to suspicious kerosene subsidy payments by the NNPC.
NNPC, long regarded as being riddled with corruption, was branded this week on the cover of the prominent News magazine as "Nigeria's Sleaze Machine."
The company has hit back at Sanusi, saying he does not under the technicalities of the oil industry.
Financial analysts, both within Nigeria and abroad, have applauded Sanusi's tenure in Africa's most populous country, top oil producer and second largest economy.
He was credited with overhauling a crumbling and deeply corrupt banking sector which teetered on the brink of collapse following the outbreak of the global financial crisis in 2008.
He also earned praise for bold moves to protect the Nigerian naira, although the currency has fallen against the dollar in recent weeks.
Sanusi opened himself to criticism over the NNPC affair after he first alleged last year that oil-related revenues of $50 billion had not been paid into government coffers, which amounts to nearly double Nigeria's annual budget.
In the face of enormous political pressure, Sanusi backtracked and said some of the missing money had been accounted for and that further investigations were needed.
He then revised the missing money figure down to $12 billion.
But earlier this month, he insisted the figure was $20 billion.
A Financial Times report, citing Sanusi's private documentation, alleged that the NNPC was continuing to pay subsidies to kerosene vendors even though Nigerians still pay full market price for the product.
Late President Umaru Musa Yar'Adua is believed to have scrapped the kerosene subsidy in 2009, meaning the NNPC subsidy payments may be illegal while offering no benefits to consumers.
The NNPC has countered that the kerosene subsidy removal was never approved by lawmakers so the company must continue to make the payments. It blamed unethical kerosene sellers for the fact that consumers continue to pay full price.
Kayode Awotile of Lakeworth Investment and Securities, who criticized Thursday's move, said Sanusi has left Nigeria's "financial sector better than he met it".
"I do not think any reasonable government would want to penalize him" for demanding answers from Nigeria's widely criticized state oil company.
Nigeria has been attracting huge interest from foreign investors as an emerging economy that may offer strong returns in the coming years.
In a Feb. 19 report, London-based Capital Economics said Nigeria's monetary discipline under Sanusi had positioned the country to outperform the rest of Africa over the next decade.
It was not immediately clear if the turmoil surrounding Sanusi's last months on the job would tarnish this positive outlook, but Awotile said the priority for successor should be to "sustain his reformist nature."


UK core pay growth strongest in nearly 11 years, but jobs growth slows

Data showed the unemployment rate remained at 3.8 percent as expected. (Shutterstock)
Updated 16 July 2019
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UK core pay growth strongest in nearly 11 years, but jobs growth slows

  • Core earnings have increased by 3.6 percent annually, beating the median forecast of 3.5 percent
  • The unemployment rate fell by 51,000 to just under 1.3 million

LONDON: British wages, excluding bonuses, rose at their fastest pace in more than a decade in the three months to May, official data showed, but there were some signs that the labor market might be weakening. Core earnings rose by an annual 3.6 percent, beating the median forecast of 3.5 percent in a Reuters poll of economists. Including bonuses, pay growth also picked up to 3.4 percent from 3.2 percent, stronger than the 3.1 percent forecast in the poll. Britain’s labor market has been a silver lining for the economy since the Brexit vote in June 2016, something many economists attribute to employers preferring to hire workers that they can later lay off over making longer-term commitments to investment. The pick-up in pay has been noted by the Bank of England which says it might need to raise interest rates in response, assuming Britain can avoid a no-deal Brexit. Tuesday’s data showed the unemployment rate remained at 3.8 percent as expected, its joint-lowest since the three months to January 1975. The number of people out of work fell by 51,000 to just under 1.3 million. But the growth in employment slowed to 28,000, the weakest increase since the three months to August last year and vacancies fell to their lowest level in more than a year. Some recent surveys of companies have suggested employers are turning more cautious about hiring as Britain approaches its new Brexit deadline of Oct. 31. Both the contenders to be prime minister say they would leave the EU without a transition deal if necessary. A survey published last week showed that companies were more worried about Brexit than at any time since the decision to leave the European Union and they planned to reduce investment and hiring. “The labor market continues to be strong,” ONS statistician Matt Hughes said. “Regular pay is growing at its fastest rate for nearly 11 years in cash terms and its quickest for over three years after taking account of inflation.” The BoE said in May it expected wage growth of 3 percent at the end of this year.