January 11, 2022

Former CBN Governor, Sanusi Lamido Sanusi, in a Tedx Youth programme in Abuja on August 18, 2013, painted a graphic picture of the rot in the Nigerian political economy detailing, with hard facts, the fraud the runs in the banking and petroleum sectors. Eight years after, his experience is still relevant as corruption still barbs the soul of the nation’s economy. It’s messy, sleazy and the stench oozes from both the public and private sector including, strangely, from the religious sector.  Below, we reproduce the full expose:

 

Paradoxes of a Nation

Nigeria is a country that specialises in exporting what it does not produce and importing what it produces, one of the world’s largest producers of crude oil that does not refine its own products and has to import petroleum products.

The world’s largest producer of cassava that does not produce starch or ethanol.

A large tomato belt, yet the world’s largest importer of tomato paste.

A country that from childhood I have heard had the potential of being a world power, but everyday we still talk about potential.

Today we’re talking about the potential of Nigeria and yet, China, Indonesia, Malaysia, Japan, Korea, Vietnam, Brazil all have turned their potential into reality.

What is the one thing that we need to do to break this barrier that faces us?

In 4years in Abuja, I’ve come to the conclusion that we need to overcome the fear of vested interest.

My experiences as Governor of CBN

 I became Central Bank of Nigeria, CBN, Governor in 2009 in the middle of a global financial crisis. I came to the CBN knowing that banks have problems and believing that these problems were caused by a global crises, the collapse in the capital market and the price of oil and that they’ll be fixed by simply addressing the simple normal risk management issues in banks.

Shortly after I came in and we went into investigations, I discovered that the Nigerian banking system was infested with the same corruption of the rent-seeking system in this country, that a number of bank Chief executives had taken their banks and  fleeced those banks and literally taken depositors’ money to buy properties all over the world.

And just like people do in ministries or government agencies, the banks were themselves a site for rent seeking. The fundamental character of the Nigerian State is that for decades since we found oil, it has existed not to serve the people but as a site for rent extraction for a very small minority that controls political power, and it doesn’t matter where this group comes from (North, South, East or West, Christian or Muslim), the State has always been a site for extraction of rent, with the exception of a few years that we can think of, when we had development.

This is at the heart of the problems of the country. I’ll give you a few examples; there was one Chief Executive Officer who took away from her bank, over N200 billion, and this money was taken for purchase of properties. We recovered from one CEO, 200 pieces of properties in Dubai, real estate in Johannesburg and on the Potomac in Washington, apart from shares in over 100 companies.

All of that was purchased with depositors’ funds. We went to the court in the UK for the case of another CEO, we got a judgement for that CEO for N142billion stolen from the bank and taken to buy shares and manipulate shares of his institution, and also transferred outside to purchase property.

The first CEO we were able to convict, we recovered these assets and got a six months sentence and sorted it out.

Religion and Political Power Play

The second CEO, we finished our case established in Nigeria that we had a civil case in the UK and a criminal case in Nigeria. Two weeks before the closing statements were made, the judge was miraculously promoted to the Federal Court of Appeal, after 3 years of trial, at the very end of the trial, because someone, a very popular religious leader with hundreds of thousands of supporters took him to political authorities and the system that was supposed to protect depositors and handle criminals was used and manipulated to promote a judge so that the judge will not convict a thief.

This is an example of the kinds of things that happen in a country that stops the country from reaching its full potential.

From my experience with the banking reforms and how it affects the funds of investors we found the following:

After we discovered the things that happened in the banks, the critical thing we had to do was take a decision that will pit us against powerful political and economic forces. We were dealing with CEOs that in 2009 had become invincible, they had economic power and had bought political protection.

They were into political parties, they had financed the elections of officers and they believed that nobody could touch them and every time I said it was time for us to take action, people said to me that I could not touch them because I would be sacked or even killed, and I said, you know what? We are going to take them on, and we took a decision to remove them.

We removed them and nothing happened. And we said we were going to prosecute them and put them in jail and we did put one of them in jail and we’re going to recover these assets, because the way the CBN operated in the past, these guys take all these monies and the CBN says the banks have failed.

The banks that we saved had N4.4 trillion in deposits with 8 to 10 million customers, but the government and the system has always berthed on the side of the rich people.

These 8 million customers include the old woman in Gboko and other villages who have been told to save their money for 40 to 50 years and wakes up one day  and all her savings are gone.

The civil servant who has worked for 35/40 years and kept his/her pension in the bank, the school fees of his children, wakes up one day and he finds that his bank is barricaded because the bank has failed; banks do not fail.

When people say banks have failed, it’s like saying you see a man whose throat has been slit and you say the man died, he did not die, he was killed.

Those that murder the banks and destroy these deposits have always walked away, they become senators, governors, captains of industry and they set up new banks  and they continue and the millions of people who do not have a voice, nobody knows the number of Nigerians who have died from failed banks because they were sick and could no longer pay their medical bills.

Nobody knows the number of children whose parents could afford to pay their school fees but who had to drop out of school because banks were mismanaged. We used banks as one example of what you can do if you want to curb these vested interests, and deal with them and protect the poor for the first time, but the banking industry is just one part of Nigeria.

Fuel Subsidy Fraud

Let’s take the oil industry and talk about fuel subsidy.

In 2009, Nigeria paid N291billion as subsidy for petroleum products. By 2011, the number had jumped to N2.7trillion.  Did we start consuming 10 times as many petrol or having 10 times as many cars or 10 times the population?

I didn’t believe these numbers and a number of people screamed and because we tried to remove subsidy, there was Occupy Nigeria protest.

There have been investigations and we discovered that a lot of that money never went into fuel subsidy that was consumed by Nigerians.

There were people in this country that produced pieces of paper and brought it to Petroleum Pricing Regulatory Agency (PPRA) and somebody signed those papers and said they brought in petroleum products, and actually paid them subsidy because the paper said they brought in 3000 metric tonnes of petroleum products on a particular ship and we discovered that, that ship was nowhere near the coast of Nigeria on that date.

We have seen vessels that did not even exist that had been retired on bills of laden and monies had been paid, and none of these people have gone to jail.

This is the only country in the world where you have oil theft, where vessels can simply come and take crude oil and literally just sail out of the country.

How can anyone just take oil from a country and leave, when we have the Navy, NIMASA, security services of the oil companies themselves and every day we complain about lack of development.

Bogey of Vested Interests

We don’t have development because vested interests continue to wreck this country and continue to take the money out, and the only way to move from potential to reality is to stop preaching and begin to ask yourself how we can overcome the fear of vested interests and how can we confront them?

If there’s one thing I learnt from banking, it’s that they’re not to be feared; they stand on quicksand.

They’re not very intelligent people, if they were smart they probably will not be stealing, they’ll find other things to do.

They have two weapons only; how much do you want? And if you don’t want anything then I’m going to destroy you.  If you don’t want their money and you’re not afraid of them, they destroy you.

We have to ask ourselves as a country, how we’ve allowed ourselves to be reduced to a level far below our potential.

The Youth Should Take a Stand

A few days ago, I was at Tinubu’s birthday, I spoke to young people and I said to them, we have 65million young people in Nigeria, what does it take for one of you to get your vote and become the president of this country?

What does it take for you to say you’re tired of the older generation and we’re going to get one 40-year-old intelligent, patriotic, committed Nigerian and we’ll ask all the youths to vote for that person.

What does it take to address this issue sector by sector; identify these interests one by one and confront them.

Why does it have to take fuel subsidy removal for us to come out and challenge the rot in our country?

What are we afraid of? We’re afraid of losing the security that we have today, but if we do not lose it today, we may tomorrow.

Message to Nigerians

One message I have for every Nigerian is to remember that the problems of the country are enormous but the solution is simple, and that solution is that we must recognise that at the heart of the problem of Nigeria, 90 percent of our issues from Boko Haram, religious crisis, ethnic crisis, unemployment to the lack of education and healthcare is that there are people who profit from the poverty and underdevelopment and these people are called vested interests.

So long as they remain entrenched and we do not overcome our fear of them and dislodge them, we’re not going to find solutions to our problems and we’re not going to reach our true potential.