Why Lamido Sanusi Should End Up In Kirikiri Prison.

Hope For Nigeria in Lagos, Nigeria

B-O-M-B-S-H-E-L-L!!!

By Femi Aribisala, Lagos.

One of the more annoying things about Nigeria is that our thieves are bad thieves. Conventionally, thieves operate at the night, out of respect for the homeowner and law-enforcement agencies. Not in Nigeria: thieves operate here in broad daylight in absolute contempt of everybody.

n Nigeria, thieves know they will not be caught. They know if they are caught, they will not be tried. They know if they are tried, they will not go to jail. Therefore, there is a culture of impunity in Nigeria which makes the country a holiday-resort for thieves and robbers.

Jail or Dismissal?
Nothing speaks more eloquently about this culture of impunity than the CBN under Lamido Sanusi. Sanusi’s posture as CBN Governor is an insult to Nigerians. He ran the place as a personal estate. He flouted every financial regulation.
He gave away government money in a flagrant manner that would give pause to even billionaire Mike Adenuga. And then when he knew the game was up, he decided to blow the lid on NNPC financial indiscretions, in order to distract attention and attract public support and sympathy.

Nigerians should not fall for this “mago-mago.” Lamido Sanusi should not only be sacked, he should be tried and, if convicted, should be jailed.
The government has called Sanusi’s bluff. In a sleight of hand, he has been summarily dismissed from office under the guise of suspension.
This has created some brouhaha because the President needs Senate approval for the dismissal of a CBN Governor. But the president has found a way round that impediment. Sanusi has been suspended; he has not been fired.
Surely, the president has the power to suspend a public employee for questionable conduct, pending the confirmation of his wrongdoing.
If the allegations against him are found to be without substance, he can then return to his post.

However, since Sanusi’s term will soon expire, the president has gone right along to nominate his replacement. It is all politics, and not just Nigerian-style. Separation of powers is a judicious principle of federalist government, but there is something anomalous about a CBN governor transforming himself overnight into an opposition politician spokesman. There is also something unacceptable about the arrogance of Sanusi which makes him feel he is an untouchable. Under the circumstances, his suspension/dismissal from office is not surprising. Indeed, it is all the more imperative given the financial improprieties that have characterised his tenure in office.

Distorted Timeline:
The major sticking point with Sanusi’s “dismissal” is the widespread assumption that it is payback for him blowing the whistle about the whopping $20 billion missing from NNPC accounts.
However, there is every probability that the opposite is what happened. The government was the first to query Sanusi about his financial improprieties. When he could not explain them, Sanusi went on the offensive by making public statements about missing monies at NNPC.

This would explain why his allegations tuned out to be shambolic.
The last thing a country needs is a CBN governor who talks frivolously. The word of a CBN governor has implications for financial market volatility; therefore he must mark his words.
He must speak with confidence and precision. Not so with Lamido Sanusi. Sanusi went public and made a monkey of his credibility. First, he said $49 billion was missing from NNPC accounts. Then he said it was $10 billion; and then it was $20 billion. What will it be tomorrow? How come Sanusi did not determine precisely the amount before broadcasting it to the world? It would appear that Sanusi’s reckless disclosures came out of the need for him to cover his tracks at the CBN. Knowing that the book would soon be thrown at him, he decided to lay the grounds for saying he was being accused of financial improprieties because he exposed those of others.
This is not to deny that there are, in all probability, huge financial improprieties hidden in NNPC accounts. However, the very fact that a CBN governor decided to go public with them is highly suspect. A CBN governor does not make such public disclosures as CBN governor.

He resigns first. It is even more suspect given the fact that the very person who would have us believe he is taking the moral high ground with these disclosures is the same person we have now learnt has run the accounts of the CBN like a bull in a china shop. Sanusi is anything but a foolish man. He surely knows that those who live in glass houses don’t throw stones.

Sanusi knew something was up. Therefore, he decided to go on the offensive. What he has done is to curry favour the Nigerian public by raising alarm about missing monies, even when he did not have the full facts, in order to preempt the disclosures about his own financial improprieties.

This strategy has succeeded in part. Sanusi has immediately become the darling of the opposition APC party. Muhammadu Buhari, the self-styled apostle of anti-corruption, has come out in his staunch defense, giving us a taste of the kind of anti-corruption his APC has in mind. There is a déjà vu to this. It is the kind of hypocritical anti-corruption where the airports and seaports of Nigeria can be closed to everyone, but the Emir of Gwandu can bring in 53 suitcases under the escort of the aide-de-camp of the Head of State.

Financial Atrocities:::
The financial atrocities in the CBN under Sanusi are simply outrageous. If this is how government agencies steal and mismanage public funds, then Nigeria is in more trouble than we have ever imagined. CBN accounts under Sanusi read like pure fiction. While crying foul about missing money in NNPC, Sanusi failed to account for missing monies in CBN. Investigating the CBN in April 2013, the Financial Reporting Council of Nigeria (FRC) discovered that N38.23 billion was missing.

The money was said to have been paid to MINT- a subsidiary of the CBN. However, MINT accounts showed no such money was received.
It is only in Nigeria that you can have a Central Bank governor spend government money anyhow at his own discretion. Sanusi did not just spend a few thousand naira whimsically. He did not just give away millions of naira like Aliko Dangote. He gave away billions. The government reveals that Sanusi gave away nothing less than N163 billion in no less than 63 “intervention projects” in different parts of the country.

Remember this: that is more than the entire 2014 budget of Edo State.
Just listen to this: the CBN is said to have paid ?38 billion to the Nigerian Security Printing and Minting Company (NSPMC) in 2011 for printing banknotes. However this is in excess of the total turnover of NSPMC that same year, which was only N29 billion. The CBN claims to have paid Emirate Airline N511 million for currency distribution nationwide in 2011 when the airline does not have a local charter service in Nigeria. It reports N425 million was paid to Wing Airline, but the airline is not even registered in Nigeria. It also claims to have paid Associated Airline ?1 billion for the same purpose, but the airline did not have up to a billion-naira turnover in 2011.

In its 2011 account under “sundries” (i.e. unexplained expenses), Sanusi’s CBN reported an expenditure of N1.1 billion. For legal and professional fees that same year, it claimed to have spent an amazing N20 billion. This is simply mind-boggling. So mind-boggling in fact that naïve people like me don’t believe a word of it. These are just crooked details designed to mask the massive corruption and graft under Sanusi’s watch.

In 2012, N1.2 billion was listed as expenses on “private guards” and “lunch for policemen.” Wow! These policemen must have been having caviar for lunch. Similarly, N1.6 billion was spent on newspapers, books and periodicals alone that same year.
Pull another leg.
Who believes this kind of rigmarole? Still in 2012, N3 billion was spent on “promotional activities.” Pray, to whom was the CBN doing this promotion? Where did these promotional activities take place and to what purpose? Was it in Nigeria or in outer space? Which bank was CBN in competition with?

Was it the World Bank or the African Development Bank? Was the CBN trying to attract depositors or customers? Or was it paying legislators so that its powers would not be curtailed?
Nobody should condone Sanusi’s financial recklessness. He also played Father Christmas with Nigeria’s money. According to the government, Sanusi’s CBN wrote-off loans to the tune of N40 billion.

Without board or presidential approval, Sanusi spent ?743 million of CBN money acquiring 7 percent shares of the International Islamic Management Corporation of Malaysia, contrary to the provisions of the CBN Act.

Off to Kirikiri:::
It is a big indictment of the Jonathan administration that this impunity was tolerated for this long and was only addressed after Sanusi became a political embarrassment to the government. The billion-naira question now is what is going to happen to Sanusi. Will he get away with these corrupt practices or will he be prosecuted to the full extent of the law?

My position is that we need to chart a new course in the treatment of corruption in Nigeria. If Sanusi is truly guilty of these improprieties, he should be sent to jail; for a very long time.
However, the bet is on that nothing will happen to him beyond his dismissal from office.
It appears nothing is also going to happen to Deziani Allison-Madueke, the Minister of Petroleum. The missing $20 billion at NNPC will also be swept under the carpet. All the signs of a cover-up are already apparent. The FRC indicted all the Deputy Governors of the CBN along with the Governor and asked that they all be sacked. However, not only were they not sacked, one of them has been made the new Acting Governor. In all likelihood, this culture of impunity will remain for the simple reason that it seems to go all the way to the very highest echelons of the Nigerian government. - Hope For Nigeria.

The Vampire Squid Strikes Again: The Mega Banks' Most Devious Scam Yet

Rolling Stone magazine


Banks are no longer just financing heavy industry. They are actually buying it up and inventing bigger, bolder and scarier scams than ever

Read more: http://www.rollingstone.com/politics/news/the-vampire-squid-strikes-again-the-mega-banks-most-devious-scam-yet-20140212#ixzz2uLAv28sc 
8

By MATT TAIBBI

February 12, 2014 11:00 AM ET

Illustration by Victor Juhasz

Call it the loophole that destroyed the world. It's 1999, the tail end of the Clinton years. While the rest of America obsesses over Monica Lewinsky, Columbine and Mark McGwire's biceps, Congress is feverishly crafting what could yet prove to be one of the most transformative laws in the history of our economy – a law that would make possible a broader concentration of financial and industrial power than we've seen in more than a century.

Matt Taibbi on the Great American Bubble Machine

But the crazy thing is, nobody at the time quite knew it. Most observers on the Hill thought the Financial Services Modernization Act of 1999 – also known as the Gramm-Leach-Bliley Act – was just the latest and boldest in a long line of deregulatory handouts to Wall Street that had begun in the Reagan years.

Wall Street had spent much of that era arguing that America's banks needed to become bigger and badder, in order to compete globally with the German and Japanese-style financial giants, which were supposedly about to swallow up all the world's banking business. So through legislative lackeys like red-faced Republican deregulatory enthusiast Phil Gramm, bank lobbyists were pushing a new law designed to wipe out 60-plus years of bedrock financial regulation. The key was repealing – or "modifying," as bill proponents put it – the famed Glass-Steagall Act separating bankers and brokers, which had been passed in 1933 to prevent conflicts of interest within the finance sector that had led to the Great Depression. Now, commercial banks would be allowed to merge with investment banks and insurance companies, creating financial megafirms potentially far more powerful than had ever existed in America.

All of this was big enough news in itself. But it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is "complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally."

Complementary to a financial activity. What the hell did that mean?

The Feds vs. Goldman

"From the perspective of the banks," says Saule Omarova, a law professor at the University of North Carolina, "pretty much everything is considered complementary to a financial activity."

Fifteen years later, in fact, it now looks like Wall Street and its lawyers took the term to be a synonym for ruthless campaigns of world domination. "Nobody knew the reach it would have into the real economy," says Ohio Sen. Sherrod Brown. Now a leading voice on the Hill against the hidden provisions, Brown actually voted for Gramm-Leach-Bliley as a congressman, along with all but 72 other House members. "I bet even some of the people who were the bill's advocates had no idea."

Today, banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs own oil tankers, run airports and control huge quantities of coal, natural gas, heating oil, electric power and precious metals. They likewise can now be found exerting direct control over the supply of a whole galaxy of raw materials crucial to world industry and to society in general, including everything from food products to metals like zinc, copper, tin, nickel and, most infamously thanks to a recent high-profile scandal, aluminum. And they're doing it not just here but abroad as well: In Denmark, thousands took to the streets in protest in recent weeks, vampire-squid banners in hand, when news came out that Goldman Sachs was about to buy a 19 percent stake in Dong Energy, a national electric provider. The furor inspired mass resignations of ministers from the government's ruling coalition, as the Danish public wondered how an American investment bank could possibly hold so much influence over the state energy grid.

There are more eclectic interests, too. After 9/11, we found it worrisome when foreigners started to get into the business of running ports, but there's been little controversy as banks have done the same, or even started dabbling in other activities with national-security implications – Goldman Sachs, for instance, is apparently now in the uranium business, a piece of news that attracted few headlines.

Wall Street's War

But banks aren't just buying stuff, they're buying whole industrial processes. They're buying oil that's still in the ground, the tankers that move it across the sea, the refineries that turn it into fuel, and the pipelines that bring it to your home. Then, just for kicks, they're also betting on the timing and efficiency of these same industrial processes in the financial markets – buying and selling oil stocks on the stock exchange, oil futures on the futures market, swaps on the swaps market, etc.

Allowing one company to control the supply of crucial physical commodities, and also trade in the financial products that might be related to those markets, is an open invitation to commit mass manipulation. It's something akin to letting casino owners who take book on NFL games during the week also coach all the teams on Sundays.

The situation has opened a Pandora's box of horrifying new corruption possibilities, but it's been hard for the public to notice, since regulators have struggled to put even the slightest dent in Wall Street's older, more familiar scams. In just the past few years we've seen an explosion of scandals – from the multitrillion-dollar Libor saga (major international banks gaming world interest rates), to the more recent foreign-currency-exchange fiasco (many of the same banks suspected of rigging prices in the $5.3-trillion-a-day currency markets), to lesser scandals involving manipulation of interest-rate swaps, and gold and silver prices.

But those are purely financial schemes. In these new, even scarier kinds of manipulations, banks that own whole chains of physical business interests have been caught rigging prices in those industries. For instance, in just the past two years, fines in excess of $400 million have been levied against both JPMorgan Chase and Barclays for allegedly manipulating the delivery of electricity in several states, including California. In the case of Barclays, which is contesting the fine, regulators claim prices were manipulated to help the bank win financial bets it had made on those same energy markets.

And last summer, The New York Times described how Goldman Sachs was caught systematically delaying the delivery of metals out of a network of warehouses it owned in order to jack up rents and artificially boost prices.

You might not have been surprised that Goldman got caught scamming the world again, but it was certainly news to a lot of people that an investment bank with no industrial expertise, just five years removed from a federal bailout, stores and controls enough of America's aluminum supply to affect world prices.

How was all of this possible? And who signed off on it?

By exploiting loopholes in a dense, decade-and-a-half-old piece of financial legislation, Wall Street has effected a revolutionary change that American citizens never discussed, debated or prepared for, and certainly never explicitly permitted in any meaningful way: the wholesale merger of high finance with heavy industry. This blitzkrieg reorganization of our economy has left millions of Americans facing a smorgasbord of frightfully unexpected new problems. Do we even have a regulatory structure in place to look out for these new forms of manipulation? (Answer: We don't.) And given that the banking sector that came so close to ruining the world economy five years ago has now vastly expanded its footprint, who's in charge of preventing the next crash?

In this Brave New World, nobody knows. Moreover, whatever we've done, it's too late to have a referendum on it. Garrett Wotkyns, an Arizona-based class-action attorney who has spent more than a year investigating the banks' involvement in the metals markets and is suing Goldman and others over the aluminum case on behalf of two major manufacturers, puts it this way: "It's like that line in The Dark Knight Rises," he says. "'The storm isn't coming. The storm is already here.'"

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How the U.S. Exports Global Warming

POLITICS MAIN

Read more: http://www.rollingstone.com/politics/news/the-vampire-squid-strikes-again-the-mega-banks-most-devious-scam-yet-20140212#ixzz2uLBIaguS 



1.  Ex-Morgan Stanley Chief Jams Foot in Mouth, Complains of CEO Abuse

February 13, 5:30 PM ET

John Mack actually thinks the government is being too hard on his banker buddies | More »

Read more: http://www.rollingstone.com/politics#ixzz2uLC0JR00 

I’ve powers to suspend Sanusi – GEJ

By  Emmanuel Aziken, Ben Agande, Peter Egwuatu, Dapo Akinrefon, Gbenga Oke & Michael Eboh

ABUJA—President Goodluck Jonathan, yesterday, affirmed his powers to suspend Mallam Sanusi Lamido Sanusi as governor of the Central Bank, saying the action was totally unconnected with alleged corruption charges raised by Sanusi against the Nigerian National Petroleum Corporation, NNPC.

Speaking during an interactive media chat on television last night, President Jonathan equally pooh-poohed issues about his intentions for the 2015 presidential elections just as he declared that the country would not break under his watch.

President Goodluck Jonathan and Lamido Sanusi

The president said that the forthcoming national conference was an opportunity for Nigerians to address long standing issues affecting them in the polity just as he queried the propriety of the Borno State governor’s claim that the Federal Government was not doing enough in fighting the terrorist group, Boko Haram. The president dared the governor that should he pull out the troops from Borno State for one month, the governor would not be able to stay in Government House for one month.

The media chat anchored by AIT’s Imoni Amarere also had Grace Ekpo, Goodluck Nnaji of Base FM, Oraifite in Anambra State, and Bolaji Tunji of New Telegraph on the panel.

The media chat which lasted exactly 75 minutes was mainly taken up by last week’s suspension of Sanusi as governor of the CBN but the president also addressed issues concerning defections by governors and senators from the parties on which they were elected; the resurgence of Boko Haram attacks in the country, his 2015 presidential bid and the controversies surrounding subsidy on kerosene, among others.

On his declaration for 2015

The President said: “In Finland, when you are elected as the president of that country, you no longer belong to any political party. But that is Finland; in Nigeria and with the tradition of the PDP, as soon as you become the president, you become the leader of the party. In the parliamentary system, the Prime Minister is the leader of the party. So, ideally, the president has some challenges. Even today, I am not contesting elections but I must make sure that I lead my party to victory.

“I remember in 2007, when former president Olusegun Obasanjo was leading the campaign for the late Yar’Adua and myself. There was a particular place we visited and Yar’Adua was not with us when I addressed the press and I was asked the question, ‘why should President Obasanjo be the key person campaigning for you’?.

I told them then that what you do not understand is that the President of Nigeria according to the PDP constitution, is the leader of the party and the president should lead his party to victory. As at that time, I was still the governor of Bayelsa State.

“While I am campaigning here, I will also go and lead the campaign in Bayelsa State because I was the leader of the party and as the governor, I had to make sure that the party wins. Even today that I am not contesting elections, any candidate contesting on the PDP platform, I must still lead the party to victory.

The president must lead his party to victory and the political environment is so hot and I do not want to use this platform to campaign and to talk about PDP; it will not be fair. I was there to tell the world that the PDP is still the dominant party in the country. I cannot run away.”

Defections of governors

“I will prefer we do not go to that area to market my party. I want to use this platform to comment on contemporary issues. I believe one thing very clearly- that we are elected by Nigerians and the days when Mr President, Mr governor or Mr Senator imposes his will on Nigerians is over. Nigerians have been made to understand that their votes count.

The issue is that if the governor is doing very well, the people will definitely follow him, but if the people do not believe in him, they will go with their votes.”

Are you contesting and when are you going to declare your interest?

“If I tell you I am not contesting, there will be issues and if I say I am contesting, there will be issues. I know the political environment is hot now but at the appropriate time, you will know.

Centenary celebration funding

“I cannot say the total cost of the centenary but it is mainly sponsored by the private sector. The Heads of states that are coming are my guests. I will accommodate them, feed them and pay for their transportation, that is the role of the president but every other thing is being sponsored by the private sector. Government is not going to spend so much money.”

Kick off of the national conference

“We will not want the disintegration of Nigeria to be a subject matter for that discussion but I am quite happy that when the committee went round, it was discovered that only one person submitted a memo on  the disintegration of the country.

“Our thinking is that the national conference will begin on March 3. You will know the chairman, the deputy chairman and the secretary but they will start work for at least a week before we invite others to join. On March 10, I will formally inaugurate the conference. The plan so far is that the conference will start on March 3.”

Nigeria will not disintegrate

“We are not holding the conference so that the country will break. People feel that the present constitution is not the peoples’ constitution, but that the constitution was imposed on them by the military dictators and that Nigerians must have their own constitution. People have different views, all what we are doing, other countries have done, but they call it different names. Just as other countries have done, it shows that we are entering another centenary.

“If there are issues we think we can correct, we must go and correct them but if there are no issues, then fine. But let us go from different backgrounds and redeem our country. If there are one or two grey areas that we think we can make corrections, then, let us make them. The purpose is not to prevent the disintegration of Nigeria. Nigeria will not disintegrate. The idea of the conference is not to create any environment that will affect this administration, but this conference is necessary. At the end of the day, I believe that there will be a lot of changes.

On his powers to suspend the CBN governor, he said:

“The issue of the Central Bank is quite unfortunate but I will respond based on the issues you raised. Forget whether it is Goodluck Jonathan; it is whether the President of the Federal Republic of Nigeria has powers to suspend the governor of CBN. I will tell you, yes, the President has absolute powers to suspend the CBN governor. CBN is not even well defined in the Nigerian constitution. If you look at the Nigerian constitution, section 153,  talks about executive bodies like Federal Character Commission, Civil Service Commission, Judicial Service Commission, about 14 of them, the code of conduct, these are clearly defined and it says that the President appoints, but must clear with the National Assembly. For the President to remove anybody, the president must go through Senate. CBN as the number one bank is not even well defined in the Nigerian constitution, but CBN law makes the provision that to appoint the governor, deputy governors, and  the non-executive directors, the President appoints and sends to Senate but the President has oversight functions over cbn. But if somebody tells you that the CBN is a different country, it is not true because for the cbn governor to change the colour of the Naira, the President must approve and for the CBN account to be even published, the President must approve.

Sanusi is still the governor of CBN and people must know that and that is why there can never be a substantive governor until the issue is sorted out. Sanusi could come back tomorrow to continue his work because the issues raised are issues that the board of CBN with the Financial Reporting Counicl, the authority that has the power to look into the financial transactions of CBN will deal with.

“The issue of suspension came in because the CBN Act is somewhat anomalous. We have similar situations where the CBN governor is also the chairman of the board. The CBN governor is the chief executive of CBN and at the same time is chairman of the CBN board; so if there are allegations about the CBN governor, it becomes a problem for you to look into it. And there were issues raised based on the 2012 audit report and for you to look into those issues, for you to be sure of what you are doing, the CBN governor should just step aside.

Immediately the board and the Financial Reporting Council sorts out those grey areas, and if it does not affect him, he would come back to do his work. So, you cannot   say now that you are going to Senate to ask for powers to suspend, then maybe in one week or so, if the board of the Financial Reporting Council… then you go back to the Senate, this man is coming back, no.

“It is when you want to remove the governor completely. Assuming that the board of CBN and Financial Reporting Council look into those grey areas and feel that the infractions are grave enough for Sanusi to leave completely, then I will have to go to Senate no matter the issues they raise. I cannot say that I am firing him, it is the Senate. So, I can place those issues before the Senate and if the Senate agrees with the report, and says yes, then he can leave.

The issue of suspension and removal are quite different.”

On why it took long for the CBN governor to be suspended, he said:

“People raised all kinds of issues that the suspension will affect the economy. When you are dealing with the treasury of the nation, you have to consult widely and take the necessary steps to ensure that it does not affect the economy. One little thing and if issues bordering on the capital market are not taken carefully, it can bring the economy down especially when the Central Bank is involved. When the financial statement was sent to me, I had to send the report to the FRC to seek their opinion. Even if I am the best accountant in the world, I still have to consult widely. It went back and forth. The first report that came to me, issues were raised. Then based on the issues raised, I raised a query to the CBN governor. Of course, the CBN governor now wrote back and I sent it back again to the FRC telling them the response of the CBN governor. It took them time, but what quickly made me to rush to take that decision? By now, the 2013 audit report ought to be published.

One of the things we had to do to stabilise the economy was to send the name of the next CBN governor to the Senate even though the tenure of Sanusi will expire in June in order to tell the international community that we have a succession plan. At any time, if they are through, Sanusi can even come back as CBN governor. So, we want to assure the international community that the succession plan will not affect the economy. It is quite a sensitive thing and you must handle it with care. I really want to use this opportunity to advise people. President Jonathan is a Nigerian, Sanusi is a Nigerian and having been governor of the CBN, he must have stepped on toes.”

Prosecuting Sanusi

People should know how government functions. Government does not prosecute anybody. Any one can be accused of anything. Even in normal civil service operations, even when you are suspected, let us say fraud, they first thing they do is to place you on suspension or interdiction and that matter is investigated. Why they place one on suspension or interdiction until the end of investigation is to ensure that the person dosen’t stay in office to frustrate the process of investigation.

“Government normally places one on interdiction without salary, but if it is a grievious offence, the person is suspended without salary, but not sack, until when they conclude the investigation. The person might go back if he has no case to answer. If he has a case to answer that is when he will be prosecuted.

“The FRC is not a member of CBN, so there might be some issues they pointed out and probably they might need some explanations.

“I’m not saying what they raised there is incriminating on the CBN or Sanusi. It will depend on when the Board of CBN and the FRC look into the grey areas. If he has no case to answer, we won’t prosecute.

“If he has a case to answer, it will depend on the nature of the case. In the public service there are some cases, which are not criminal in nature, such as an act of negligence, or that he skipped a process that he is supposed to follow, this might not lead to prosecution, he might only be sanctioned, indictment or so.

“Prosecution will only come in if a fraud is established. If a fraud is not established, it is just that somebody failed to follow due process or some other issues that are not clearly fraudulent. Nigerians should wait.”

President Jonathan also addressed issues relating to the autonomy of the apex regulatory bank saying that a bid to amend the act was frustrated last year.

He said:

“They are aspects of the CBN operations that most be absolutely y autonomous, not everything about CBN should be autonomous.

“The issues of monetary policies on which CBN is autonomous. For instance, if the CBN wants to devalue the naira, they don’t need to take permission from the President. They just need to look at international actions and take an action. If they want to strengthen the money or withdraw money from circulation, they don’t need to tell the president, nobody interferes. Anything that needs to do with the monetary policies of the CBN, nobody interferes and they don’t need to take permission from anybody, the law gives them absolute autonomy. They should not be subjected to political actions, so that they can manage the country’s finances effectively.

“There are, however, a number of positions that they need the consent of the Presidency, such as when they want to change the colour of the naira, they must seek the President’s consent. The CBN law may be, I’m not saying will be. However, where it may be amended, we might have to consider international best practices.”

Asked why the deputy governors were retained despite the report indicting them, he said:

“The Governor has to step aside, not because anybody has convicted Sanusi, but because he is the Chairman of the Board. Yes, there is somebody among the Deputy Governors, who is now acting, because we cannot remove everybody, unless the office will collapse. In cases like this, the leader steps aside.

“Those are not convictions, but suspected transactions and so on. There may be explanations. The issue of one having to remove all the deputy governors and directors, is not right. While going into the issue, and it is discovered that one of the deputy governors is involved, the person will be asked to step aside, for that area to be properly examined.

“For now, the report is central, so it sort of affects the head.

Kerosene subsidy

“I don’t need to be briefed about the kerosene subsidy issue, because I was involved. I was the Vice President to the late President Yar’Adua.

About 2008, 2009, international crude oil price dropped significantly, it was $48 or so and we realized that at that time, the pump price of PMS was N70 per litre, while kerosene was N50.

We realized that if we completely deregulate, Nigerians at that time would have gotten PMS at about N60 per litre. We then agreed that we will pull out, completely deregulate the industry, because if we have pulled out then, the pump price would have dropped, and if the pump price dropped, nobody would have protested and that is the best time. So those approvals were given.

Along the line, people, even labour leaders  were among the people that said this might be short-lived, let us wait for another six months, then if it is stable, government can pull out. We were afraid that the price can go up again, and if we pull out now and the international price of crude oil goes up again, citizens will suffer.

“We decided to leave it that way, because the petroleum law did not recognize the president, it is the minister.  So, what happened is that instead of keeping the pump price at N70, the president now got the pump price to N65. This is the first time the pump price of petroleum products were brought down. It always goes up and up. Nigerians would have been buying at N62, but the presidency brought it to N65 and it was announced.

Those are memos authorizing the minister to act, the president has no power based on the law, but of course we know that before the minister will effect it, the president must give clearance.

The law governing changing the price of petroleum products is very clear. To increase  or decrease the price of any petroleum product, the law states that you have to advertise it. You must inform Nigerians in some daily newspapers, you will state the date and the time. If you listen very well, when we want change the price, we might say maybe Sunday 12 midnight, so that by then, every station will change.

Kerosene subsidy still remains, it was not removed and no Nigerian can say that at a particular period it was removed. I was Vice President, and there was no particular period that we announced that we have completely deregulated kerosene.

On Boko Haram

We are worried that people are being killed. There are successes but the negative stories create the impression that the security services are not working. If they are not working, we will not be walking freely in Abuja. We are working with the Cameroonian authorities. The killings are quite worrisome but we will get over it.

On the statement by the Borno governor.

The statement by the governor is unfortunate. I don’t expect that from the Borno governor. If he thinks that the armed forces are not doing well, he should tell me and I will pull them out and see if he will stay in Government House for one month.

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Sanusi explodes says Jonathan’s aides fraudulent, unfit

Subsidy and the alleged missing billions

Business News
Written by vangret

The Senate Finance Committee sitting on alleged missing N20billion dollars had a lot of interesting testimonies. From the initial accusations by the suspended CBN Governor, Mallam Lamido Sanusi, to the clarifications by the various government agencies,facts are out in public domain which have enlightened the public on the issue.

For example ,Nigerians now know that the allegation that kerosene subsidy is illegal is  no longer sustainable . This is because the so-called presidential directive stopping subsidy was discovered to be contradictory and unimplementable by the then Petroleum Minister Rilwanu Lukman . It also came to the fore that there is truly subsidy on kerosene but the impact is not  being  felt because of the high demand in the face of low supply. Nigerians also now know that by virtue of the Petroleum Act ,the oil corporation has the power to incur expenditure.

Many more facts came out including the fact that nobody is ready to withdraw subsidy on kerosene as even the Senate Committee asked the executive arm to make request through supplementary appropriation. Even at that, the hearing was confronted with the reality of a provision of the Petroleum Act which empowers the Minister of Petroleum Resources  to fix the prices of petroleum products. The plan for an independent audit was also unimplementable because the responsibility is statutorily that of the Auditor General of the Federation.

The Senate sitting had opened with a  theatrical drama by the suspended CBN Governor. He anchored the missing N20billion on the argument that there is no subsidy. But events have proved that there is indeed subsidy ,leading to the new reality that the so-called missing money was spent on kerosene subsidy. If Sanusi had succeeded in proving that a presidential directive  stopped subsidy,he would have also triumphed in claiming that the N20billion dollars was illegally spent . On both counts,Sanusi failed as several documentary evidence confirmed.

First, Lukman, in his capacity as Petroleum Minister, was obviously unable  to implement  this directive as the inherent contradiction in the directive was at variance with a fundamental and critical requirement of the Petroleum Act which requires  the issuance of a gazette. Specifically ,the directive contained a clause that said the subsidy removal should not be made public.

For the avoidance of doubt , the letter of the controversial presidential directive is to the effect that commencing from July 2009: “Eliminate existing subsidy on the consumption of kerosene, taking into account that subsidy payments by government, on kerosene do not reach the intended beneficiaries. Public announcement of this measure should be avoided”.Lukman refused to gazette the directive because of the contradiction . So subsidy continues especially after the violent demonstrations of 2012.

The other thing is why the high prices of kerosene despite subsidy? The President of the Independent Petroleum Marketers Association of Nigeria, IPMAN,  Alhaji Aminu Abdulkadir, said the problem has to do with high demand versus low supply as the quantity  subsidised is not sufficient to meet the needs of kerosene users. Said he: “About 7 to 10 million liters  are supplied  but our national consumption today is about 15 million liters. There is a shortfall in supply, hence people think the subsidy is not reaching the people. There is subsidy”.

The management of the Nigerian National Petroleum Corporation  (NNPC) also said that diversion of kerosene to neighbouring countries, industrial use, aviation fuel, sharp practices by middlemen and pipeline vandalism are reasons kerosene is not readily available for domestic consumption. Group Managing Director of the corporation, Engr. Andrew Yakubu, made this disclosure during the two-day investigative public hearing on supply, distribution, expenditure and subsidy on kerosene.

Yakubu maintained that due to a number of issues ranging from incessant pipeline vandalism and diversion of the product to road construction, the product, meant for the masses, is not readily available. “There are quite a number of competing demands for kerosene and until these are addressed by other relevant agencies, the issue of kerosene not being readily available for domestic use will continue to reoccur every now and then.

The way out is for this committee to collaborate with the NNPC to encourage the sale of liquefied petroleum gas otherwise known as cooking gas,” the NNPC boss  said.

Responding to a question on whether kerosene subsidy is still in place, he said that was exactly what he met when he assumed office in June 2012, adding that kerosene subsidy is funded by unrealizable revenue flow. “The NNPC takes crude at international price and sells it at the domestic market at regulated price of N50 per liter,” he stated.  Answering a question on what the NNPC is doing to stop kerosene diversion, the NNPC helmsman said that the Corporation does not have the power to police marketers and sanction them, adding that there are statutory bodies with the responsibility.

Commenting on the legality of kerosene subsidy, the NNPC Company Secretary, Anthony Madichie, citing Petroleum Act section 6 subsection 1, said only the Minister of Petroleum Resources has the authority to fix petroleum product prices, stressing that if a presidential directive is given and not gazetted, such directive will not be effective.

In his submission to the committee, the Managing Director of the Pipelines and Products Marketing Company, PPMC, a subsidiary of the NNPC, Prince Haruna Momoh, informed that kerosene is sourced for the Nigerian market through importation and domestic refining, adding that dual purpose kerosene (DPK) is sold to coastal marketers, Major Marketers Association of Nigeria, MOMAN, Depot and Petroleum Products Marketers Association, DAPPMA and NNPC Retail.

“I can confirm to this committee the statistics for the supply of DPK is as follows. In 2010, NNPC supplied 2,515,582.44 metric tonnes of DPK, in 2011, NNPC 1,922,263.56 metric tonnes, in 2012, NNPC supplied 2,622,843.20 metric tonnes and in 2013, NNPC supplied 2,671,747.97 metric tonnes making a total of 9,732,437.17 metric tonnes,” Momoh revealed.

Marketers also supplied further statistics on the existence of subsidy.The price regime of DPK ex-refineries/depots in Nigeria is at N40.90k/litre, NNPC sells DPK at its retail outlets for N50/litre. If the PPPRA template is taken into account, DPK is expected to have a landing cost of N130/litre leaving a gap of about N80/litre which is a cost element to NNPC and the tune to which DPK is subsidized for the populace.

Demand versus supply

The question ‘where does the subsidy go?’ then arises. The total demand for DPK across all sectors by far outweighs the supply available nationwide thus leading to a shortage of the product and a resultant increase in the equilibrium price. This is the major reason the subsidy though enormous is not being felt by the populace.

Another  major development is a submission which went a long way to settle many contentious issues affecting a subsidiary of the oil corporation.

The Attorney General of the Federation and Minister of Justice, Mohammed Bello Adoke, said the  NNPC can legitimately transfer its participating interest in oil mining leases (OML) to its wholly owned subsidiary, the Nigerian Petroleum Development Company,NPDC.

The AGF provided the legal position during the investigative hearing of the Senate Committee on Finance on the alleged unremitted $49.8bn oil revenue in respect of the status of $6bn NPDC gross revenue which Sanusi  had alleged should have been remitted to the Federation Account by the NNPC.

Adoke informed  that by virtue of paragraph 14 to 16 of the First Schedule of the Petroleum Act, CAP.P.10 Laws of the Federation of Nigeria, LFN, 2004 (NNPC Act) and Regulation 4 of the Petroleum (Drilling and Productions) Regulations 1969 as amended, a holder of an OML or Oil Prospecting License (OPL) can assign its interest provided the consent of the minister of petroleum resources is obtained.

On whether all revenues derived by the NNPC from upstream operations including those under which OMLs in the JV operations are payable to the Federation Account, the minister posited that NNPC is generally under an obligation to remit its revenue from the upstream petroleum operations into the Federation Account.

According to him, this is, however, dependent on the definition of ‘revenue’ within the meaning and intendment of section 162 (10) (c) of the constitution of the Constitution of the Federal Republic of Nigeria 1999 (Constitution) saying that the NNPC can by virtue of section 7(4) of the NNPC Act defray all expenses incurred in the course of its business in the upstream operations.

The AGF stated that the NNPC is required to pay into the Federation Account the ‘net revenue’ as opposed to the ‘gross revenue’.

Meanwhile, IPMAN has warned that kerosene subsidy removal was capable of bringing down government even as it denied reports that it bribed officials of the petroleum ministry and the oil corporation on  allocations.

Speaking in Abuja ,the National President of IPMAN, Alhaji Aminu Abdulkadir, said the bribery allegation  was part of  the plot to politicise the oil sector ,stressing that “any removal of subsidy is a ploy to instigate  uprising against government as kerosene subsdised the cost of living for the poor.

The IPMAN leader said those plotting to derail the Jonathan presidency are the ones behind the push to withdraw kerosene subsidy which he said would impose further hardship on the poor,canvassing that “subsidy should remain until LPG supply is sufficient to fill the gap.

”Until LPG is widely available,you cannot remove subsidy. If you do,it will bring social unrest. I strongly advise that subsidy should remain. I also call on the minister to call industry operators to order to put in more efforts into the provision of LPG. Part of the subsidy should be used to fund facilities for LPG”,he said .