In an interview with the Financial Times of London just a few months after he became Governor of the Central Bank of Nigeria, he was asked to comment on conversations in cyberspace linking him with presidential ambition, MallamLamidoSanusiLamido said it was not true. “Do you have any presidential ambitions?” “No, I don’t. I have ambitions to be the emir of Kano”, he quipped.
But what are the qualities expected of a prince and king? According to “the Prince” by Niccolò Machiavelli, the prince must not get frightened in adversity; he should avoid ruling via magistrates, if he wishes to be able to “ascend” to absolute rule quickly and safely and he should make sure that the people need the prince, especially if a time of need should come.
And certainly, since June 3, 2009 when he took office, Sanusi has demonstrated some of the qualities of the prince but at times he tends to overdo it. To be sure, the Senate President who came into office as an astute frugal banker and human rights activist impressed majority of Nigerians when on August 14, 2009, he sacked chief executive officers of eight banks and announced the first bailout of N620 billion.
Other initiatives such as the nationalisation of defunct Afribank, Bank PHB and Spring Bank Plc now known as Mainstreet, Keystone and Enterprise Bank and establishment of Asset Management Corporation of Nigeria (AMCON), tend to have stabilised and restored confidence in the banking system.
Sanusi’s CBN also identified three key sectors of power, transportation and agriculture, as most critical to development of the real economy, as well as the change that will drive other sectors and contribute to economic development of Nigeria.
The Economic Confidential reveal that some key interventions in the real sector under this reform pillar include: the N200 billion Commercial Agricultural Credit Scheme (CACS); the N300 billion Power and Aviation Intervention Fund; the N200 billion Restructuring/Refinancing to the Manufacturing Sector/SME; the N200 billion Small and Medium Scale Enterprises Guarantee Scheme (SMECGS).
CACS was established by the CBN in collaboration with the Federal Ministry of Agriculture being funded through the issuance of bond by the Debt Management Office (DMO) in two tranches. Loans made under the scheme are at single digit interest rate subject to a maximum of 9.0 per cent, while the CBN bears the 10 interest subsidy at maturity.
For the Power and Aviation Intervention Fund, the CBN made available the sum of N300 billion to stimulate credit to the domestic power sector and the troubled airline industry. The initiative was to help finance badly needed power projects and to allow banks to refinance loans to the heavily-indebted airline industry.
Under the scheme, borrowers access the fund at an interest rate of seven per cent payable on a quarterly basis, including all charges in order to refinance existing loans and leases and provide working capital for the two sectors.
As part of efforts towards unlocking the credit market and to ensure that credit flows to the real sector of the economy, the CBN made available N200 billion for re-financing/re-structuring of banks’ existing loan portfolios to the manufacturing sector and SMEs. The fund was meant to fast-track development of the manufacturing sector by improving access to credit by manufacturers, as well as improving the financial position of the commercial. The maximum that a single borrower could borrow under this scheme is N1 billion in respect of re-financing/re-structuring with an interest rate of seven per cent also payable quarterly.
As per the N200 billion Small and Medium Scale Enterprises guarantee Scheme established in 2010, the purpose was to promote access to credit by SMEs. It provides guarantees on loans by banks to the sector in order to absorb some of the risk elements that inhibit banks from lending to the real sector. Manufacturing and agricultural value chains; SMEs, processing, packaging and distribution of primary products are some of the activities eligible for financing under the scheme.
A borrower is entitled to maximum amount of N100 million under the scheme in the form of working capital, term loan for refurbishment, equipment upgrade, expansion and overdraft. The guarantee covers 80 per cent of the amount borrowed and is valid up to the maturity date of the loan, with maximum tenor of five years.
Also in the offing is the N100 billion intervention funds for women enterprises in line with the apex bank’s avowed plan to boost businesses owned and managed by women set for launch by the end of 2012.
Aside intervention in key economic areas, the CBN has been involved in philanthropic activities too. In January this year, it announced donation of various sums of money to victims of Islamist fundamentalists in parts of the country.
Prince Sanusi has also not been silent on national issues. For close to two years and until January 1, 2012 when President Goodluck Jonathan increased price of premium motor spirit from N65 to N130 per litre, the CBN Governor continued to push for the total removal of alleged subsidies in petroleum prices.
In addition, Sanusi is always advising state governors on prudent ways of spending their revenue allocations.
For his comments and actions, Sanusi has attracted both commendations and opprobrium from the public. The Movement for National Equity accused him of thriving on trouble. It accused him of pursuing “illogical and unenlightened shallow policies, sectional-motivated decisions, controversy-filled actions, deepening distrust, non-transparency, and arbitrary wasteful spending of scarce national resources.”
One of such policies is the Cash-Lite policy, which is said not to be well thought out and was introduced without adequate public enlightenment. Initially, the CBN placed a limit on cash transactions across the counter for individuals at N150,000 and N1 million for corporate organisations, only to increase it to N500,000 and N3 million respectively after a myriad of complaints occasioned by infrastructure challenges during the pilot scheme in Lagos State.
Some also accused him of policy inconsistencies like his attempt to introduce N5000 note at the same time that the banks was pursuing a cashless policy. The issue of N5,000 bank notes and coining of lower domination notes, including the N20, N10 and N5 notes, the apex bank has come under immense pressure and criticisms.
Some financial experts, including Sunday Salako, president, Association of Senior Staff of Banks, Insurance and Financial Institutions, ASSBIFI, is that a lot of damage has been done to the financial system. “Nigerian banks are currently worth half (of) their real value.” Pat Utomi, a financial analyst and professor of economics, argued that before Sanusi’s appointment, Nigerian banks were expanding all over Africa but that now they have become less competitive.
According to Sam Ohuabunwa an industrialist and immediate past chairman of the Nigerian Economic Summit Group, NESG, , “My fear is that when Sanusi has finished these forced marriages, there is going to be an unravelling, because it is not organic; it is not happening by pure business realisation.”
Others argued that even in developing economies, the functions of the central bank go beyond being the lender of last resort and price stability to developmental functions.
As it is, Sanusi is truly living to the billing and tributes of a prince. The prince should, ideally, be virtuous, but he should be willing and able to abandon those virtues if it becomes necessary. “A wise prince should be willing to be more reputed a miser than be hated for trying to be too generous. On the other hand: "of what is not yours or your subjects' one can be a bigger giver, as were Cyrus, Caesar, and Alexander, because spending what is someone else's does not take reputation from you but adds it to you; only spending your own hurts you".
A prince should also not only keep his word when it suits his purposes, but do his utmost to maintain the illusion that he does keep his word and that he is reliable in that regard. Therefore, a prince should not break his word unnecessarily.
Of all these, Sanusi is doing his best