Rationalising Sanusi's moves
By Bayo Ogunmupe
PRESIDENT Umar Yar’Adua replaced Charles Soludo with Lamido Sanusi
as the Central bank governor in 2009. Since then Sanusi had performed
creditably as an economist, patriot and CBN governor. He had whipped Nigerian
banks into shape by shaming the corrupt and forcing the banks to pay for their
own bailouts.
Sanusi won accolades from around the world. However, January
2012 was an unpopular month for him, with protesters threatening to burn down
his Kano home after his successful campaign for the removal of oil subsidy. In
a recent lecture at the London School of Economics, Sanusi acknowledged his
newly found unpopularity, warning the predominantly Nigerian audience to
exercise restraint through striving to understanding the issues before throwing
shoes at him.
Unfortunately, our people do not understand that we are
importers of manufactured goods and exporters of raw materials because of
corruption and incompetence of our leaders. That was what Sanusi sought to
rectify, which caused the anger of the ignorant. While trillions of naira were
being siphoned form the treasury through fake oil subsidy, Sanusi sought and
succeeded in exposing the oil subsidy fraudsters. There was no way Sanusi could
explain to the people for he himself is a bourgeois. Exasperated by the wanton
profligacy, Sanusi went to town with curing its source rather than merely
treating it. All these have led to what Sanusi calls the de-industrialisation
of Nigeria. In his LSE lecture, Sanusi referred to the current state of affairs
in Nigeria as a primitive accumulation of wealth by our leaders. Thus, the
Nigerian economy isn’t just structurally deformed because of bad policies, it
is so also because of external pressures, slave raiders, neo-colonialists and
the Bretton Woods institutions, which is why an Okonjo-Iweala as president of
the World Bank isn’t the panacea to our economic woes.
Indeed, Sanusi argues that the solution to our economic
problems lies in ethical policies that are prosecuted by men of integrity. He
presents his banking reforms as living proof of the way forward. But the real
target of Lamido Sanusi is the rentier class, namely those who manipulate the
social and political environment to get a larger share of fixed wealth rather
than creating new wealth. The Nigerian economy is deformed because it is
actively scarified by the rentier class who benefit from its deformity. One
could extend Sanusi’s analogy: “banks don’t fail, they are killed,” to the
entire Nigerian economy, meaning, the Nigerian economy didn’t fail, it was
killed. Economists see these public sector killers as governors, senators,
civil servants and ministers. Which is why 70 per cent of our so-called
business moguls are fronts for looters. They are parasites of the Nigerian
state. They are not creating wealth, they are only keeping it in trust for the
treasury looters.
Sanusi’s greatness lies in his being an ethics scholar,
rather than a traditional banker and economist. He was appointed Central bank
governor in June 2009 when the Nigerian Stock Exchange was at its lowest ebb in
performance and oil was 40 dollars per barrel. Moreover, the Nigerian banks
were about to collapse at the time. Then, Sanusi discovered a disconnect
between bank balance sheets and the real economy. He found that money was
chasing rent, not profit. To turn the country around, the government and CBN
needed an overarching vision to reverse the pauperization of Nigeria, to turn
this rent based economy to a neo capitalist system.
Thus, in his banking sanitisation policies, Sanusi’s success
has been outstanding. He restored accountability to the banks, moving
commercial banks out of the short-term investment areas, and opening space for
private equity. By bringing down bank overheads through the sharing of
services, costs have dropped by 30 per cent, leading to lower interest rates.
This enabled increased lending to agriculture which now accounts for 42 per
cent of GDP, it was less than one per cent in the Soludo era.
In 2009, he subsidised lending to small-scale businesses by
N200 billion with 7 per cent interest. That measure saved 12,000 jobs and
production in those businesses going up by 15 per cent. Then, he set up a fund
for companies owned by women so that they borrow at single digit interest
rates.
Sanusi’s opposition to fuel subsidy fits perfectly into the
industrialisation scheme. He sees supporters of devaluation of the naira as
agents of international capital agitating against sovereign states to protect
the integrity of the domestic economy. Sanusi’s anti-subsidy stance is
economically sound, if even the government handling of it has been woeful.
Ideologically, Sanusi believes in subsidising the poor
rather than the elite as we are doing at present. In 2011, 24 million litres of
oil were imported on top of Nigeria’s daily consumption of 35 million litres
which never reached Nigeria. Effectively then, Nigerian fuel subsidy was
subsidizing fuel consumption at home and its neighbours in Benin Republic,
Togo, Ghana, Cameroun and the Sahel states to the North. Sanusi’s postulation
is that the struggle between rent and profit isn’t class struggle. It is merely
the exploitation of the people. His support for the local production of goods
and services had been seen as an attack on vested interests and the support for
the creation of a patriotic national bourgeoisie. Sanusi’s criticism of
on-going primitive accumulation of money via oil subsidy scam, pensions scam
and the like stored in Dubai houses, fast cars, and Lagos boat club could be
converted into investment in manufacturing and infrastructure, kick-starting an
industrial revolution. That was the way Britain started her industrialization
which took funds from capitalists and invested them in productive enterprises
in England, spurring the industrial revolution.
This option isn’t open for Nigeria, for the English
plantation owners had fewer options then than using their profits from slavery
to enrich the motherland. In the Nigerian case however, the Nigerian rentier class
has a much wider variety of options: from conspicuous consumption to chasing
domestic and foreign assets accumulation.
Indeed, our mindset is deadlier than bombs. It is self
evident that while Christians are being targeted because of who they are,
Muslims are being hit because they are not supporting actions that are inimical
to the their cause. Which was why during the fuel subsidy furore, Sanusi was
branded an enemy of the people, though he was working to salvage the people
from the stranglehold of subsidy scammers.
Thus, the Nigerian Spring, also known as Occupy Nigeria,
started with patent opposition to oil subsidy removal. This quickly broadened
out with other grievances such as the waste in governance, corruption and poor
service delivery. The fuel importers are now being investigated and the subsidy
palliatives: Subsidy Reinvestment and Empowerment Programme (SURE) is being
reorganized. All these go to curb the excesses of the rentier class, putting
extra budgetary expenditures under closer scrutiny.
Indeed, it is praiseworthy that Sanusi has been able to put
up a programme that reduces the cost of borrowing for power companies. The CBN
now lends at seven per cent, which is a six per cent gain from the rentier
class. We should therefore continue to eschew violence and strengthen our
resolve to clean Nigeria of corruption by demanding better deals from
government through mass action and support for patriotic public office holders
like Lamido Sanusi.
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