Nigeria suspends central bank chief for financial recklessness

Updated 20 February 2014

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."


IMF experts visit Lebanon amid worsening economic crisis

Updated 20 February 2020

IMF experts visit Lebanon amid worsening economic crisis

  • IMF team will provide broad technical advice
  • Lebanon has not requested IMF financial assistance

BEIRUT: A team of IMF experts met Prime Minister Hassan Diab on Thursday at the start of a visit to provide Lebanon with advice on tackling a deepening financial and economic crisis, an official Lebanese source said.

The IMF has said the team will visit until Feb. 23 and provide broad technical advice. Lebanon has not requested financial assistance from the Fund.

The long-brewing economic crisis spiraled last year as capital flows into the country slowed and protests erupted against the ruling elite over decades of corruption and bad governance.

Diab’s government, which took office last month, must decide what to do about upcoming debt payments, notably a $1.2 billion dollar-denominated sovereign bond due on March 9.

Lebanese President Michel Aoun meanwhile said on Thursday measures would be taken to hold to account all those who contributed to Lebanon’s financial crisis through illegal actions be they transfers abroad, manipulation of Eurobonds or other acts.

“There is information that we are still in need of with regards to the banking situation. There are measures that we will take to hold to account all who participated in bringing the crisis to where it is,” Aoun said, according to his Twitter account.

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One of Lebanon’s most influential politicians, Parliament Speaker Nabih Berri, said on Wednesday that debt restructuring was the best solution for looming maturities.

Lebanon will on Friday review proposals from firms bidding to give it financial and legal advice on its options, a source familiar with the matter said on Thursday. The government aims to take a quick decision on who to appoint, the source said.

So far, firms bidding to be Lebanon’s legal adviser are Dechert, Cleary Gottlieb, and White and Case, the source said.

Lebanon has issued requests for proposals to seven firms to provide it with financial advice.

The government on Wednesday formed a committee tasked with preparing an economic recovery plan that includes ministers, government officials, a central bank representative and economists, according to a copy of a decree seen by Reuters.