As the Central Bank Governor Exits

Sanusi Lamido Sanusi (SLS) will bow out of CBN in May this year at the end of his single term as the Governor of the Central Bank of Nigeria (CBN). Despite last-ditch efforts to tarnish his image, I believe he can exit with his head held high.

Like him or loath him, he has succeeded in bringing some semblance of sanity into the banking system and the way the CBN is run. When he took over as the Governor, the banks were in a complete mess with some on the verge of collapse, the stock market has tanked, the Naira was in a free fall and the payment system archaic by today’s standards. All that has changed in the 5 years of his tenure.

His decisive and no-nonsense approach ensured that depositors were saved and the banking system was stabilized. Depositors funds were recovered from some bank CEO’s that had turned the banks into their personal piggy banks. The exchange rate was stabilized and the Naira is today exchanging to the dollar at about the same rate it was in early 2009. Although the last 6 months have been tough for the Naira it could have been worse but for the earlier good work of the CBN in the preceding 4 years.

And the icing on the cake is the improvement in the payment system. Today you can do your banking without entering a banking hall. Thanks to a more efficient payment system driven by the new emphasis on cash less transactions and the unified account numbering that made online banking transfer more seamless. To further cap it all, our new status in the global place allowed our hitherto snubbed at debit and credit cards to be acceptable worldwide. Now you can use your GTB/Zenith etc. MasterCard to withdraw cash in China, Dubai, Tunisia, US, France etc. You can pay for your shopping on amazon with your Naira MasterCard. Gone are the days when you either need a domiciliary account or a foreign account to shop online.

SLS was able to accomplish this in spite of the blackmails, insults, threats etc. hauled at him in the beginning by guilty bankers and then later by the political class. Thankfully, he never wavered. How did he do it?

1. He made it clear from the beginning he will not seek a second term and kept his word. How refreshing! Many have towed this line but never saw it through. This allowed him to do what was necessary as he was under no pressure to win friends in order that they will help his bid for a second term.
2. He was fearless and there were no sacred cows. Remember the list of bad debtors? That sent the signal that no one will siphon depositor’s money and just get away with it.
3. He was decisive. What needed to be done to save the financial system was done without much ado.
4. He strengthened the CBN and made it a more transparent institution. The minutes of MPC deliberations were made available and reasons for decisions made public promptly on CBN site.

While some will label him controversial, attention seeking etc., my verdict is he did a fantastic job overall. When he became the Governor of the CBN, I sent him a mail, I don’t know if he ever got it, requesting that he should please consider writing his memoirs when he leaves office. I am extending the plea again. We need those who served in Public office to document their experience so that we can learn from it. I am sure such a book by SLS will be a great addition to Nigerian Leadership literature. I hope he gives us this last but enduring present.

2 comments

  1. No second term is the best strategy in our corrupt environment. A second term requires compromise and for what he needed to accomplish there was no room for compromises. I am happy he realised that right from the go. It allowed him to act as he did.

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