Judgment prompts fears over Nigerian central bank independence

Listen to this article


The independence of Nigeria’s central bank was jeopardised on Tuesday when an Abuja court dismissed a case against President Goodluck Jonathan over the suspension of bank governor Lamido Sanusi.

Mr Sanusi brought the lawsuit shortly after the president suspended him in February, following the governor’s revelations about an alleged $20bn shortfall in revenues owed to Nigeria’s Treasury by the state oil company.

Under the terms of the country’s central bank act, the president requires approval from two-thirds of the senate to sack a bank governor, which Mr Jonathan was unlikely to secure. Mr Sanusi’s lawyers argued that the president should have deferred to the Senate, the upper house of Nigeria’s national assembly, for approval of the governor’s suspension, for which the act makes no specific provisions.

The case has attracted widespread attention because of the implications for the future protection of the central bank from the interference of politicians. But the timing of the case was also politically awkward, with Mr Jonathan under intense pressure over his handling of the abduction of more than 200 schoolgirls by the Boko Haram terrorist group.

Mr Sanusi won acclaim for his role in sanitising Nigerian banks after a 2009 banking crash and was instrumental in stabilising what is now Africa’s biggest economy and restoring investor confidence. His tenure as central bank governor was due to end formally on June 2.

However, Mr Sanusi’s relations with Mr Jonathan deteriorated markedly after the fiasco over the allegedly missing oil revenues, with allies of the president first accusing the governor of politicising his role and then of “financial recklessness”.

If Mr Sanusi had been reinstated following his suspension it would have been another blow to the embattled president’s authority.

In a four hour ruling, read out in sweltering heat to a packed courtroom in the capital, Justice G O Kolawole said the federal high court had no jurisdiction over the matter.

He ruled it a dispute between an employer and employee that should be dealt with by the national industrial court. However, the judge urged the country’s lawmakers to review the statutes governing the central bank to make specific provisions on suspension.

Kola Awodein, one of Mr Sanusi’s lawyers, told the Financial Times after the ruling that should the suspension stand, any future president could remove a well-qualified candidate in the same way and replace that person, in the interim, with a crony. “What the [central bank] act does not give you, you should not be able to take,” Mr Awodein said.

Mr Sanusi has been more successful in two other legal cases. A federal high court in Lagos last week halted an investigation into the alleged “financial recklessness” during his tenure that was launched after his suspension.

In a separate suit, the high court ordered the government to apologise and pay damages of N50m ($300,000) in compensation for Mr Sanusi’s brief detention and the seizure of his official passport.

However, the authorities have appealed in that case and last month security officers seized Mr Sanusi second, personal passport as he tried to board a plane.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.