Waging wars against oil subsidies to the middle classes, Nigeria’s central banker, Dr Lamido Sanusi, is not short of adversaries
Most central bankers live behind closed doors, spending much of the day poring over pages of data before emerging to make the occasional speech about the economic outlook.
But that’s not how Dr Lamido Sanusi, the governor of Nigeria’s central bank, sees his job.
Handed the poisoned chalice three years ago he was hardly in his seat when he ordered the sacking of the management and boards of no less than a third of the country’s 24 biggest banks. Several executives and chairmen landed in court, “the rich and powerful,” as he described them. And Sanusi had a case – the sector had run up $5bn in non-performing loans, acquired fleets of private jets and even rifled depositors’ funds to buy shares in their own IPOs.
Sanusi’s next and current campaign took on big oil, more specifically the pernicious oil subsidies palmed by middle and upper-class Nigerians – “middle men, rent-seeking parasites and corrupt officials,” says the governor – at the expense of ordinary people who are missing out on the country’s hydrocarbon boom. “So for two years I have been convinced that this thing is a scam and that it cannot be stopped because the entire controls have been compromised,” he said.
For good measure he also waded into the intense debate over the causes of the wave of terrorism that has left 250 dead so far this year alone. Having made a donation to the victims through the central bank, he argued that economic inequality is a contributing factor and lasting peace can only be attained if northern Nigeria, origin of much of the Boko Haram terrorist group, gets its fair share of economic growth.
As always making his case with detailed research, the governor said: “When you look at the figures and look at the population in the north, you can see that there is a structural imbalance of enormous proportions.” In fact as the south has prospered by grabbing the lion’s share of average seven percent GDP growth in the last decade, the northern regions have been the victims of a decade of bust public companies, a collapse in infrastructure, power shortages and bungled sales of public assets during a decade of often misguided market reforms.
Finding new allies
Needless to say, Africa’s best-known central banker has more than his fair share of critics in this country of 150 million people. His campaign against oil subsidies has triggered vitriolic personal attacks that also target his grandfather, a prince responsible for numerous reforms including laws allowing women to inherit property, and his father, a distinguished civil servant who helped several African countries gain independence.
Not even the central bank’s donation to the terrorism victims escaped censure. “Mallam Sanusi should be sanctioned for the diversion of public funds through the illegal donation [to the terrorism victims],” thundered one newspaper columnist. Still, a prophet is not without honour and Sanusi routinely wins accolades from The Banker magazine, and last year he landed in Time’s list of the world’s 100 most influential people.
Although Sanusi will continue to attract the headlines, he’s a central banker to his fingertips. One of his smartest moves yet may be the decision to invest five-to-ten percent of Nigeria’s forex reserves in China’s yuan, the first African country to do so. The move will bring a half-formed economy closer to one of world’s fastest-growing and most complete economies – and the governor will probably get criticised for that too.