Political instability not affecting economy, says Sanusi
By Bassey Udo and

Oluwaseyi Bangudu


March 4, 2010 03:44AM
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The Central Bank of Nigeria (CBN) says there is no correlation between the performance of the nation's economy and the current political impasse resulting from the inability of President Umaru Musa Yar'Adua to perform his duties as president.

The bank's governor, Sanusi Lamido Sanusi, told NEXT in Abuja on Tuesday that there are no indications of any negative impact on the economy as a result of the president's poor health, which had made him stay outside the country for about 94 days for medical attention in a Saudi Arabian hospital.

"The Economy has been growing. Exchange rate has been stable. Interbank rate has been low. We have continued with the banking reform," Mr. Sanusi said.

The central bank Governor also said Acting President Goodluck Jonathan is satisfied with the operations of the bank.

"The activity of government continues. We have continued to get approvals from the Acting President, and consult with him at any point in time.

"We, at the Central Bank, at any point in time, have not felt that there is any difficulty in getting things done.

"I have said this repeatedly, and I will continue to say it, that we do not have any problem," Mr. Sanusi said.

Asset Management Company

On the status of the bill seeking to establish the Asset Management Company (AMC), Mr. Sanusi expressed optimism that, given the pace of the legislative process at the National Assembly, the decision on the matter will be made within the next few weeks.

"As at last week, the three committees in the House of Representatives laid the report before the full house. As of today, the AMC Bill has been tabled for the second reading at the Senate. We expect that all things being equal we can get it passed within two weeks, after all the committee processes, before the harmonisation of any differences, and then presidential assent.

"We are on track to get the AMC Bill approved within this quarter. We are on track for making rapid progress on the final resolution of the policy on capitalisation of the banking industry in the second quarter and for getting all shareholders' approval in the third quarter. By September 30, all issues with all the affected banks would have been resolved," he said.

Analyst differs

However, Victor Ndukauba, an analyst at Afrinvest, a finance and research firm, disagreed with the central bank governor's position saying that the political impasse has increased investment risks, as the political risk rating of any economy is a high determining factor for investment.

"Most investors, external investors particularly, are looking at political risk while considering economies for investment. They look at the whole political setup, the transition, the instability and the impact of all on industry and business" he said.

Mr. Ndukauba told NEXT in Lagos that "In the absence of a president, one of two decisions usually lies pending and one of these is in terms of direction and policy making and how these would impact on businesses and investments. It begins to raise a concern to any investor who would begin to factor this as a major point for decision making.

"He (President Yar'Adua) was away for about 93 days and then it was reported by foreign and local media that he returned.

"We were told that an ambulance, along with an escort headed to the seat of power, (Aso Rock) none of the media saw him, he is yet to grant an address to the public either by national address or any form of public discourse.

"This scenario creates a lot of uncertainty and that is not good for the investment climate of the nation. In my opinion, I think this would worsen the situation because while he was away, the legislature had found a way to make the Vice president act as the president, foreign players and other counterparts were more assured of the stability of the nation under one man but this recent uncertainty makes it challenging for investors" he said.

Labour warning

The Trade Union Congress of Nigeria, in the early days of the president's return, had warned that "Unless the situation (political uncertainty) is properly managed, self serving politicians who have fuelled the tension in the polity thus far over this issue, are capable of adding political, sectional and religious connotations to the whole issue and this is capable of causing serious problems for a fragile country and our fragile economy and our overall stability."

Infrastructure challenges

Speaking on infrastructure challenges in the country, the CBN governor said all the 24 bank chief executives identified, power, transport infrastructure and agricultural development as the three key areas of intervention by the banking sector that can positively impact the economy.

He said the Bankers' Committee has constituted a technical committee to work in consultation with state governments to identify bankable projects that require funding as well as other issues, such as approval to accept bonds issued by well managed states for liquidity.

He also said the CBN would encourage states to access the capital market to source for funds for their projects, pointing out that one window is the deployment of the excess liquidity by banks with the apex bank to the state governments for 10-15 year bonds through the capital market for financing long-term infrastructure development activities such as power projects.

"It's a combination of working with the banks and the government to ensure that the projects are commercially viable; pushing the advocacy for capital market reforms (like the tax), which is awaiting the president's signature," adding that this would open up the bond market to the private sector and direct lending through consultation and appropriate advice.

http://234next.com/csp/cms/sites/Next/Money/Business/5535344-147/story.csp

Is it possible that an air of political uncertainty will have no impact on the economy and foreign investment in any country?

This man compiled a wrong list of debtors, they blamed it on the Banks!!!!

This man created an unemployment catastrophe, they blamed it on his predecessor!!!!

This man has a bill before NASS to set up AMC without any mention of cost !!! we are yet to hear who they will blame it on, may be the lawmakers who can't read!!!!

Now this man is telling us that political uncertainty have no impact on the economy?

Na wa oh!!!!!!!!!!!!!!  Someone needs to chase this Bull out of the China shop.

This is sure a big miss cue on his part. How can uncertain political future not affect a countries economy ? Even the USA isn't that strong.

"I have said this repeatedly, and I will continue to say it, that we do not have any problem," Mr. Sanusi said.

A situation where we have a dying substantive President who governs by proxy and an indefinite Acting President is not a problem for Mr Sanusi.

This man is a phony character

The man is talking from the Northerner psyche of his mouth

This is exactly what Soludo said when the bubble was about to burst, the whole world is suffreing from the impact of the global recession in a world economy that is not only interconnected but interdependent on another. Investors move monies in seconds to diferent countries for safety.

Since his counterpart brother from Kastina state is running the country on proxy then can anyone tell me what is wrong with the country in Sanusi Lamido's opinion?

The irony is that only we southerners worry about those sort of issues, as far our Northern brothers are concern, what is the problem?

By way of illustration, there is Governor in the 80's from Kano state called Bakin Zuwo. When the military struck in December 1983, there was a rumour that they found about N5 million naira ( equivalent today' N1.250BILLION) in his safe at the governor's  house or lodge. The Military guys were alledge to question him,

Military: Governor, where did you get this money from?

He replied

Bakin Zuwo;  He asked them what was the problem?, This is government money, I am the Governor, this is the government house ?


To our brothers in the North, Governace, money, religion can be done as the leader wishes. They swear by Allah and don't uphold the tenent of Islam. They lie barfaced like their master Yar A'liar.

What also worry me about Sanusi lamido is that he is one of the bright star in that Region and he still behaving like a PDP politician. Maybe because they appointed him, it is rubbing off on him, that one day he may declare his intention like SOLUDO to become the Governor of Kano state even though his royal entitlement is only to the crown of Kano city.

Certainly Sanusi need to used his medication as prescribed by the shrink for thinking or saying that the country economy is not or will not be affected by the political instability.  No serious business person risk their money in a politically uncertain country or economy, and that is Economics 101, even Market women understand this.

With the bolded part of the article, seems like Sanusi dont care who runz the nation, he only care about the economy and his job, and if i am right, kudos to him

Fhemmmy:

With the bolded part of the article, seems like Sanusi dont care who runz the nation, he only care about the economy and his job, and if i am right, kudos to him

Thank You

Very wrong assumption.
The effect is too much for them to even analyze.
How many people will wanna go and invest in a nation that is not stable

Sanusi has no power to affect the Presidential situation.

If he starts bleating that Yara absence is affecting investors, you all will start harping that he is affecting investors confidence.

In the meantime, it is important to let investors know that Jonathan supports the reform, and that reform will carry on regardless who is the substantive President. This stresses the relative independence of the CBN.

I wouldnt expect any CBN Governor to say different.

Ibime:

Sanusi has no power to affect the Presidential situation.

If he starts bleating that Yara absence is affecting investors, you all will start harping that he is affecting investors confidence.

In the meantime, it is important to let investors know that Jonathan supports the reform, and that reform will carry on regardless who is the substantive President. This stresses the relative independence of the CBN.

I wouldnt expect any CBN Governor to say different.

What is the difference between this comment and those who said Nigeria's economy can withstand the global financial crisis?

Or do we have a totally different acceptable standard for Sanusi?

OYB_MEND:

What is the difference between this comment and those who said Nigeria's economy can withstand the global financial crisis?

Nigeria could withstand the global financial crisis and the attendant repatriation of hot money. . . what Nigeria couldn't survive (in both long and short term) is monumental fraud and book cooking.

Ibime:

Nigeria could withstand the global financial crisis and the attendant repatriation of hot money. . . what Nigeria couldn't survive (in both long and short term) is monumental fraud and book cooking.

The effect of instability in Nigeria seems to be underestimated

Ibime:

Nigeria could withstand the global financial crisis and the attendant repatriation of hot money. . . what Nigeria couldn't survive (in both long and short term) is monumental fraud and book cooking.

The way you guys talk about book cooking makes me laugh

so far has Sanusi gone around the country to count the money in each Bank's vault?
It is still the balance sheet of these banks he audited, of which any smart MD who was possibly cooking books like you guys claim can always get some smart accountantants to balance the books, report some losses and collect money from the CBN which they did not need in the first place.

OYB_MEND:

The way you guys talk about book cooking makes me laugh

so far has Sanusi gone around the country to count the money in each Bank's vault?
It is still the balance sheet of these banks he audited, of which any smart MD who was possibly cooking books like you guys claim can always get some smart accountantants to balance the books, report some losses and collect money from the CBN which they did not need in the first place.

and that is why you are not an auditor

OYB_MEND:

The way you guys talk about book cooking makes me laugh

so far has Sanusi gone around the country to count the money in each Bank's vault?
It is still the balance sheet of these banks he audited, of which any smart MD who was possibly cooking books like you guys claim can always get some smart accountantants to balance the books, report some losses and collect money from the CBN which they did not need in the first place.

Anyone who makes an assumption that Nigerians in leadership positions do not engage in fraudulent practices is seriously misguided. . . I have heard many arguments against Sanusi, but none so inane as someone giving their word that the Ibrus et al are clean.

Corruption is so interwoven into the fabric of our soceity that the default position of any wise observer should be that corruption is endemic in every sphere of our society . . . from Public to Private sector.

biina:

and that is why you are not an auditor

Is that all you have to say about this topic?

Akingbola: Court Refuses EFFC's Request
By Davidson Iriekpen, 03.06.2010

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Justice Tijani Abubakar of the Federal High Court in Lagos yesterday refused an application by the Economic and Financial Crimes Commission (EFCC) seeking to compel the former Managing Director of Intercontinental Bank Plc, Dr. Erastus Akingbola to appear before the court.

Justice Abubakar in a ruling held that it was unnecessary for Akingbola to appear in person in court before his suit challenging the order for temporary forfeiture of his assets could be heard.

The judge whose ruling covered three applications – two by EFCC and one by Akingbola held that the doctrine of fugitive disentitlement relied upon by the commission in seeking to compel Akingbola’s appearance was not applicable.
EFCC had in the application urged the court to order Akigbola and one of his lawyer, Mr. Bode Oduwole to appear before it and answer questions relating to the former Intercontinental Bank’s boss’ assets and his earnings.
The commission’s lawyer, Dr. Konyinsola Ajayi (SAN) had stressed the need for the court to summon the duo in view of the conflicts inherent in the supporting affidavit to Akingbola’s application.

Justice Abubakar held that there was no conflict in the said affidavit which required the calling of oral evidence. He added that the application could be determined on point of law alone.
The court also dismissed EFCC”s application for stay of proceedings until Akingbola appears before the court to answer to a pending charge filed against him.

“Again, it must be understood that the issue before this court relates to wholly and exclusively the property of the respondent (Akingbola). I am not sure the doctrine of fugitive disentitlement will apply in the instant case.
“This court is therefore bound to hold that it is necessary to hear and determine the respondent’s application dated December 7, 2009,” the judge held.

The judge refused to either vacate or stay the execution of the mareva orders he earlier granted for the temporary forfeiture of Akingbola’s assets.
He held that as against Akingbola’s argument that the order were wrongly obtained, it validly made.
Akingbola had argued that the hearing of the motion ex-parte dated December 23 last year order made by the court were done in the judge’s chambers and not in the open court, acts which he argued, were unlawful.

Citing sections of the EFCC Act, 2004, the judge held that it was within the power of the commission to procure a court order for temporary forfeiture of assets belonging to someone suspected to have been involved in financial crime.
“I am of the view that the powers vested in the commission by sections six and seven of the EFCC Act 2004 will be meaningless unless the right to take steps to preserve suspected property is given to the commission,” he held.

Justice Abubakar further held that evidence before the court showed that there is a pending charge against Akingbola and that he was yet to appear in court to answer to the charge.
He held that it would do substantial injustice to the interest of the public should he discharge the order of mareva injunction against Akingbola.

Akingbola’s lawyer, Chief Felix Fagbohungbe (SAN) while responding to the decision, said his client would appeal.
He said the court failed to pronounce on the core issue before it, which was whether or not it was constitutional for the judge to hear the EFCC’s application in chambers and gave order also in chambers.
He noted that the judge reviewed parties’ arguments on the issue in his ruling, but failed to make pronouncement on it.

Sanusi's house of cards are crashing on him.

Ibime:

Sanusi has no power to affect the Presidential situation.

If he starts bleating that Yara absence is affecting investors, you all will start harping that he is affecting investors confidence.

In the meantime, it is important to let investors know that Jonathan supports the reform, and that reform will carry on regardless who is the substantive President. This stresses the relative independence of the CBN.

I wouldnt expect any CBN Governor to say different.

Good, and I appreciate his change in attitude.

Its good to see he is learning on the Job 
I have come to a conclusion about Sanusi.

He is an astute/principled banker of high quality and knows his stuff.

But this comments like many others hes made in the past, expose his macro-economic deficiencies.

He either doesn't know or knows but does not appreciate the impact of macro-economic/fundamental issues.
This guy expressed genuine shock when Nigerias credit rating was downgraded after he publicly intervened and bailed out a number of Nigerian banks

This has been evident since day one and has been his biggest undoing.

i have always seen Sanusi as a debile person and would say anything put in his mouth,

vigasimple:

The man is talking from the Northerner psyche of his mouth
This is exactly what Soludo said when the bubble was about to burst, the whole world is suffreing from the impact of the global recession in a world economy that is not only interconnected but interdependent on another. Investors move monies in seconds to diferent countries for safety.

Since his counterpart brother from Kastina state is running the country on proxy then can anyone tell me what is wrong with the country in Sanusi Lamido's opinion?

The irony is that only we southerners worry about those sort of issues, as far our Northern brothers are concern, what is the problem?

By way of illustration, there is Governor in the 80's from Kano state called Bakin Zuwo. When the military struck in December 1983, there was a rumour that they found about N5 million naira ( equivalent today' N1.250BILLION) in his safe at the governor's house or lodge. The Military guys were alledge to question him,

Military: Governor, where did you get this money from?

He replied

Bakin Zuwo; He asked them what was the problem?, This is government money, I am the Governor, this is the government house ?


To our brothers in the North, Governace, money, religion can be done as the leader wishes. They swear by Allah and don't uphold the tenent of Islam. They lie barfaced like their master Yar A'liar.

What also worry me about Sanusi lamido is that he is one of the bright star in that Region and he still behaving like a PDP politician. Maybe because they appointed him, it is rubbing off on him, that one day he may declare his intention like SOLUDO to become the Governor of Kano state even though his royal entitlement is only to the crown of Kano city.

Certainly Sanusi need to used his medication as prescribed by the shrink for thinking or saying that the country economy is not or will not be affected by the political instability. No serious business person risk their money in a politically uncertain country or economy, and that is Economics 101, even Market women understand this.

vigasimple, To say that I'm a bit disappointed in you and your post above would be a gross understatement. You started out by with what you called the Northerner psyche, and as an illustration of the said psyche, you used one of the most incompetent and deplorable governors in the North. You know fully well that Bakin Zuwo's utterrances do not reflect the so called pshche you talked about. Your posts here is disingenuous to say the least and may be due to latent bigotry.

I thought you were one of the detribalized forumites here, but I guess I was wrong.

This is a political statement, is this guy a Politician?

ndu_chucks:

vigasimple, To say that I'm a bit disappointed in you and your post above would be a gross understatement. You started out by with what you called the Northerner psyche, and as an illustration of the said psyche, you used one of the most incompetent and deplorable governors in the North. You know fully well that Bakin Zuwo's utterrances do not reflect the so called pshche you talked about. Your posts here is disingenuous to say the least and may be due to latent bigotry.

I thought you were one of the detribalized forumites here, but I guess I was wrong.

ha ha ha ! and what is the psyche of the north pls?

I am waiting for his foot soldiers to tell us how he is right and still knows what he is doing.

My friend biina and co over to you.

agabaI23:

I am waiting for his foot soldiers to tell us how he is right and still knows what he is doing.

My friend biina and co over to you.

Let me humor you. From statements acredited to Sanusi  in the article

Sanusi's conclusion: There are no indications of any negative impact on the economy as a result of the president's poor health, which had made him stay outside the country for about 94 days for medical attention in a Saudi Arabian hospital.

Sanuis's primary premises:
1. The Economy has been growing.
2. Exchange rate has been stable.
3. Interbank rate has been low.
4. We have continued with the banking reform.

Sanuis's secondary premises (as regards effect on CBN operation ):
1. Acting President Goodluck Jonathan is satisfied with the operations of the bank.
2. CBN continued to get approvals from the Acting President, and consult with him at any point in time.Analy

Analysis: IMO, if the premises are true, then the conclusion is right. Of the four primary premises, the difficult one to ascertain is the economic growth, the other 3 are easily measurable.
For those who disagree with Sanusi above, they should either show the lack of correlation/relevance of Sanusi's premises to measuring negative impact on the economy,or present evidence that his claims in those premises are false. Saying he is prevaricating without providing counter evidence is BS. What should have happened is not necessarily same as what happened.

An example of a poor counter argument is (from the article)

Ndukauba Conclusion: the political impasse has increased investment risk

Primary premise:
1. the political risk rating of any economy is a high determining factor for investment.

Secondary Premise:
1. Most investors, external investors particularly, are looking at political risk while considering economies for investment
2. In the absence of a president, one of two decisions[b] usually[/b] lies pending and one of these is in terms of direction and policy making and how these would impact on businesses and investments.

The contradiction: while he was away, the legislature had found a way to make the Vice president act as the president, foreign players and other counterparts were more assured of the stability of the nation under one man but this recent uncertainty makes it challenging for investors" he said.

The problem with Ndukuaba (and similar arguments) is that they focus on what was likely to happen, but fail to provide any evidence that those things happened in this specific case. He failed to provide evidence of the relevant policy decisions that were pending, nor did he provide any evidence of discouraged investors.

Note: Sanusi' statement is different from Soludo's in that Sanusi was talking about the past, while Soludo was predicting the future. Soludo wouldnt make the same statement today. Hindsight is 20/20.

Good try^

You said he was talking about the past?

'Is not affecting' does not sound like the past for me or may be I should repeat my English 101 class.

2. Exchange rate has been stable and 3. Interbank rate has been low.

Yea exchange rate and interbank rate will be stable because letters of credit (LOC) are no longer honoured and the volume of import has decreased. It is not as if there is increased industrial activities to fill the vacuum created by impaired importation because the banks are not willing to extend credit facilities and even when they do, they do so at cut throat interest rates.

How will the economy grow in such a situtaion.

It is very obvious that he was saying what he was asked to say. He has his own allegiance not minding his 'radical' stance.

4. We have continued with the banking reform.

Until he visits Unity bank I will not believe him.

df2006:

ha ha ha ! and what is the psyche of the north pls?

Rain has fallen again. Crawl back into your hole, the rain has stopped. olodo

agabaI23:

Good try^

You said he was talking about the past?

'Is not affecting' does not sound like the past for me or may be I should repeat my English 101 class.

The present is an instant. If you were to plot a graph of the economic indices against time, the present will be a single point which cannot have a trend. You can only have a trend over a period of time.

Yea exchange rate and interbank rate will be stable because letters of credit (LOC) are no longer honoured and the volume of import has decreased. It is not as if there is increased industrial activities to fill the vacuum created by impaired importation because the banks are not willing to extend credit facilities and even when they do, they do so at cut throat interest rates.

How will the economy grow in such a situtaion.

Again you are making arguments as to what should be and asking questions. Please provide evidence of what was/is.
You seem to accept the points on exchange rates and interbank rates. Can you then provide indices that counter that the economy is growing? e.g. stock market index and GDP figures (in November, December, January and February)

It is very obvious that he was saying what he was asked to say. He has his own allegiance not minding his 'radical' stance.

and you know this how? because his views doesn't agree with yours? stay on point and leave out personal evaluations and allegations

Until he visits Unity bank I will not believe him.

Unity bank,like all the other banks, has been audited and directives issued.
Still the continuance of banking reforms doesnt not mean nor imply its fairness (which I believe is what you are insinuating) and was used to indicate that the absence of the president had not affected CBN operations. If you want to debate the fairness of the banking reforms, feel free to start a new thread.

Political impasse assailing capital market, say stakeholders
By Helen Oji

THE socio-economic stability, needed for restoration of investors' confidence in the nation's capital market, may have been experiencing unsavoury compromise, due to the political impasse over the country's Presidency.

Indeed, stakeholders, in separate chats with The Guardian over the weekend, stressed early resolution of conflicting issues from various political groups, to stem the tide of concomitant value depletion, arising from sagging investors' confidence in the stock market.

The stakeholders lamented that several weeks after Acting President Goodluck Jonathan had been invested with full executive powers to head the nation, discomforting currents, capable of undermining his capacity to perform the functions have been rising, with the potentiality of investors reacting negatively to the signals.

At the weekend, 12 members of the Federal Executive Council, under the aegis of "wise men", urged Jonathan to retain the status quo in the absence of ailing President Umaru Yar'Adua, even as the Chairman of the recently inaugurated Presidential Advisory Council, Lt. General Theophilus Danjuma, urged the Acting President to "get cracking", for posterity sake.

Managing Director of Dependable Securities Limited, Mr. Chenenyem Anyanwu, in Lagos, admitted that the tense political environment has been impacting negatively on the transactions in stocks.

He pointed out that no investor would agree to commit his fund in an economy with shaky political profile, especially the foreign investors, who, due to the global financial crisis, have adopted the "watch and see" posture, in the milieu of lingering political uncertainty.

"Of course yes, the political situation is affecting the stock market. Nobody would like to invest in a shaky economy. The foreign investors do not know what will happen next and the indigenous ones, who have suffered huge financial losses due to the share price meltdown, have chosen to adopt the 'watch and see' measure too. So it is affecting our market."

Corroborating his view, the Managing Director of Pivot Trust Securities and Investment Limited, Mr. Sunny Agoh, explained that when the polity is being heated up, as is the situation now in in the country, the economy is bound to suffer.

His words: "There is power tussle in the country and when there is power tussle, it is impossible for the person at the head to concentrate. And nobody is talking of the economy now and with this, it would be difficult for them to release funds.

"It is when people lay their hands on fund that things will start to work and that is when people can come to the market to invest. No country moves forward without addressing their political problems."

In his contribution, an investor with Vision Trust Investment Limited, Mr. Chibuzor Eze, said investments are being affected negatively, as a result of the political unrest.

According to him, long-term investors in the capital market want to hold on for now, until the political problem is resolved, while those that invest for short term are treading with caution.

"There is uncertainty in the country and all the sectors are affected, including the stock market. People are cautious on how they commit their funds and this limits the inflow of cash in the system. Nobody wants to commit his fund in a way he or she cannot come out of it easily.''

Nigeria's capital market has been described as one of the slowest recovering bourses in the world, even after being adjudged the worst performing in 2009.

The crisis was accentuated in the last quarter of last year, when the impacts of Central Bank of Nigeria's reform agenda, started hitting corporate Nigeria.

The apex bank's reforms, which were targeted at sanitising the banking sector, are yet to impact positively on the stock market.

How can one correlate the above with Sanusi's statement ?