Central Bank of Nigeria Governor Lamido SanusiNigerian President Goodluck Jonathan suspended central bank Governor Lamido Sanusi in a surprise move that halted bond trading and sent the naira to a record low, after his accusations of missing oil revenue sparked a public outcry and criticism against the government.Sanusi, 52, was suspended for alleged “various acts of financial recklessness and misconduct,” Jonathan’s spokesman Reuben Abati said in an e-mailed statement. He will be replaced by his deputy, Sarah Alade, as acting governor. Zenith Bank Plc Chief Executive Officer Godwin Emefiele was nominated by Jonathan to succeed Sanusi when his term ends in June, according to a letter the president sent to the Senate.Appointed in 2009 in the midst of a debt crisis,Sanusi cleaned up a banking industry near collapse, keptinterest ratesat a record in the face of calls from businesses for lower borrowing costs, and brought inflation down below 10 percent. His suspension may undermine the independence of the bank, adding to investor concern that policy makers may loosen their mandate on price and exchange rate stability.“This is a disruptive move, which indicates that theCentral Bank of Nigeriahas de facto lost much of its independence,”Samir Gadio, anemerging marketsstrategist at Standard Bank Group Ltd. inLondon, said in an e-mailed response to questions. “Clearly it is driven by political motives given Sanusi’s vocal criticism of oil revenue leakages and theopaque fiscal system in Nigeria.”Missing RevenueTension between Sanusi and Jonathan intensified late last year when he wrote to the president, alleging the state-owned Nigerian National Petroleum Corp. had retained almost$50 billion in revenue that was due to the government. On Feb. 4, he told a Senate finance committee that $20 billion was outstanding. The NNPC has denied the allegations.Jonathan’s office said in its statement that under Sanusi’s watch the central bank had been “distracted” from its mandate and expects Alade to “conduct its affairs with greater professionalism, prudence and propriety.”Sanusi said in an interview with CNBC Africa he won’t return to the bank even if he challenges the suspension. He said he wasn’t aware of the allegations made by Jonathan and declined to say whether the move was politically motivated.“I hope that the central bank will be protected,”Sanusi said. “We’ve done good work at the bank. I would not want to see all of that unravel.”Currency SlidesThe naira weakened as much as 3.2 percent to168.90 per dollar, the lowest since Bloomberg began compiling data in 1999. It recovered to trade at 167.89 against the dollar as of 2:31 p.m. in Lagos, the commercial capital.Nigeria’s benchmark equities gauge slid 1.5 percent and yields on the nation’s Eurobonds due July2023 jumped 11 basis points to 6.32 percent, the highest since Sept. 11.Jonathan’s nomination of Emefiele as the newgovernor may help to calm investors’ concerns, Ronak Gadhia, Africa equity research analyst at Exotix Partners LLP in London, said in a phone interview.“It is a positive appointment,” Gadhia said. “Being part of one of the larger banks means that he understands the challenges.” While thetiming of the announcement could have been better, “you’re removing a major uncertainty for the market.”Finance Minister Ngozi Okonjo-Iweala also moved to reassure investors that “tight fiscal and monetary policies” that were put in place by Sanusi and her office will continue.‘Strong Stability’“I want to reassure investors that the strong stability that we brought into this economy will continue, and we’ll not deviate from that,” she said in an interview in Abuja.Her comments were echoed by Alade, who said in a phone interview from Niger that the central bank is “committed to our mandate ofprice stabilityand minimizing volatility in the foreign-exchange market.”Sanusi fired the chief executives of eight lenders within four months of taking office after an audit of banks at the time found evidence of mismanagement and reckless lending. During his tenure he also criticized lawmakers for spending on salaries, prompting calls from the National Assembly for an apology.Sanusi said in an interview last month that hissuccessor’s main challenge will be to maintain the independence of the central bankand any undermining of that may hurt the economy.Oil AuditA letter Sanusi wrote to Jonathan calling for a probe into the NNPC’s finances was leaked to newspapers in December, fueling criticism against the president for failing to tackle corruption. Lagos-based ThisDay newspaper reported on Jan. 9 that Jonathan told Sanusi to resign over the letter.Okonjo-Iweala said an independent forensic audit of the oil accounts will help to clear up allegations of the missing revenue.Sanusi can only be removed from his post by a two-thirds vote in the Senate, according to central bank rules.“It’s a very unusual development, there’s no precedent of it,”Bismarck Rewane, chief executive officer at risk advisory Financial Derivatives Co., said by phone from Lagos today. “It will heighten uncertainty.”
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