Government's action solely based on probe by Financial Reporting
Council of Nigeria
Presidential spokesman, Dr. Reuben Abati has disclosed that the
suspension of the Governor of the Central Bank of Nigeria (CBN),
Sanusi Lamido Sanusi earlier announced yesterday was purely based on
the investigation being carried out by the Financial Reporting Council
of Nigeria since May last year.
Briefing State House correspondents at the Presidential Villa, he said
that the suspension has nothing to do with the appearances of Sanusi
or his claims before the Senate Investigative committee on the alleged
missing money from the Federation Account.
Sanusi Lamido had claimed that huge sums of money has been missing and
not remitted to the Federation Account by the Nigerian National
Petroleum Corporation (NNPC).
Abati said that there is no cause for anxiety by the stakeholders and
the international community as Nigeria's monetary policy remains the
same despite the suspension.
He said that the Government remains committed to the stability of the
economy, stability of the naira and stability of the country's
monetary policies.
Stressing that the investigation on Sanusi Lamido's financial
recklessness is still on-going, he said that there is nothing wrong in
naming a successor for his position months to the expiration of his
tenure.
According to him, President Goodluck Jonathan has not flouted the CBN
Act or any law as he did not 'remove' the CBN governor but 'suspended'
him, adding that he who has the power to hire also has the power to
suspend.
He said: "On the suspension of the CBN governor, the statement was
very clear that the president has had to take this decision as part of
attempt to strengthen the CBN to ensure that that apex bank continues
to be symbol for prudence, integrity and accountability."
"That statement also made it clear that there has been issue regarding
the financial recklessness and also violation of due process and the
mandate of the CBN. And in that statement of course it was then made
clear that with Mallam Sanusi proceeding on suspension, the most
senior Deputy governor Dr. Sarah Alade will assume the office in an
acting capacity until various reported breaches have been investigated
and resolved."
"Since that announcement there has been many inquiries particularly
with regards to the point of financial recklessness and breaches,
there has also been a lot of speculation in both local and foreign
media. There has been an expression of anxiety."
Continuing, Abati said: "On the issue of anxiety, I think nobody needs
to be anxious this decision has not been taken on the country's
monetary policy, the monetary policy of the country remains the same
and there is stability in the system and so investors in the Nigerian
economy have no reason whatsoever to fear."
"That decision was taken only with regards to internal governance
issue within the central bank. In the statement issues raised were
very clear that there are issues of internal governance.
Government remains committed to the stability of the economy,
stability of the naira and stability of the country's monetary
policies."
"The lady who has taken over in acting capacity has been long within
the system and so everyone can remain assured that there will be
stability and that the institution will remain very strong."
Abati noted that the second concern been expressed has to do with the
issue of financial recklessness.
"I will like to say that there were issues of financial recklessness
and unprofessional conduct but that did not happen today. It is not as
if this is a sudden development, but that it's been a long process
dating back to last year."
"Last year when the CBN submitted it's financial statement for the
year ended 31st December 2012, a query was raised about some of the
issues in the financial statement and the CBN governor was asked to
offer some clarification with regards to these issues. This was around
first week of May 2013. A response came from the CBN which was then
forwarded to the Financial Reporting Council of Nigeria."
"And the Financial Reporting Council of Nigeria by its Act is
empowered to review the accounts of the CBN and if there is course for
investigation, to conduct such investigation. And if there is need
also to invite other bodies to further investigate, the law makes
allowance for that."
"And that took place. And some of the outcomes of that process relates
to the issues raised about financial recklessness." He added
Listing some of the alleged offences, Sanusi Lamidobis being
investigated, he said:
"If I may just draw attention to a few of them: the persistent refusal
and negligence to comply with public procurement act in the
procurement practices of the CBN; unlawful expenditure by the CBN on
intervention projects across the country, deploying huge sums of money
as the CBN did under the watch of Mallam Sanusi without appropriation
and outside the CBN's statutory mandate."
"It is said that the expenditure of public funds of course by any
organ of government must be based on clear legal mandate, prudent
constrain and overriding nation interest.
And then financial infraction and act of financial recklessness
committed by the CBN and reflected in its audited financial statement
for 2012."
"If you need more details I will be glad to provide those details
because is a long list of infractions. But it is on the basis of all
of this and to allow for further investigations that the CBN governor
has been asked to step aside."
He said that rather than alley the fear of government on those
allegations, the Financial Reporting Council of Nigeria confirmed
concerns about the untidy manner in which the affairs of the CBN were
conducted.
On allegation that the suspension was aimed at disrupting Sanusi
Lamido's testimony before the Senate Investigative panel, Abati said:
"The question has also been raised on whether this has to do with the
ongoing appearances in the National Assembly by the suspended CBN
governor. I will like to state very clearly that this has nothing to
do with that. I have given you the background so that you can see that
this is the process."
"This government remains committed to ensuring integrity and
accountability and discipline in every sector of the economy. And it
encourages persons who have issues, who have things to say to
expressed their rights through the freedom of expression under the
constitution. Indeed the government of Nigeria is also interested in
what the legislature is doing and do not be surprise if government
goes further to initiate further audits as has been suggested in some
quarters."
"And indeed we look forward to a situation whereby Mr. Sanusi will
continue to assist the legislature in their investigations and will
continue to testify because what government is interested in really is
transparency and accountability and anything that will further promote
that objective is perfectly welcome." He said
Asked why the government didn't wait till Sanusi's retirement in June
before forwarding his replacement to the Senate, he said: "Well, I do
not see untidiness in this.
You know there are two vacancies, the suspended governor was due to
retire in June and with the retirement of former Deputy governor Tunde
Remo, there was also a vacancy at the deputy governor's level."
"In many countries of the world, you do not wait till the last minute
before you appoint successor particularly into a position in such a
strategic institutions as the CBN. You allow room for proper
transition and for the market to get to know who the new persons are."
"And with regards to the position of the CBN governor, I think
announcing the nomination for that position is good for the market, it
builds confidence, it reassures the market that there is no crisis,
there is stability and that the institution is in good standing."
"It has nothing to do with the CBN governor, as I told you there has
been a process of investigation with issues raised with regards to
internal governance system in the CBN. In the country like the UK, the
appointment of the current head of the Bank of England was announced
about four months ahead. So this helps the systeml, it builds
confidence and doesn't keep the market in the dark. I think if
anything, the president should be commended for immediately making
these nominations to show that the institution remains strong and in
very good standing."
Abati said that he was not aware of the alleged threat by Sanusi to
challenge the illegality of his suspension or any order given for
Sanusi's arrest
He said: "I'm not aware of any directive that he should be arrested as
at this moment.
But of course you know that under the enabling act of the Financial
Reporting Council of Nigeria, where an indictment is established and
all that, the law could take its course but as at this moment I'm not
aware of any directive that he should be arrested."
"The second one when you say the illegality of his suspension, I do
not understand what you mean by that, although I am aware that some
people are saying oh this is illegal but it is not."
"People who talk about illegality, they are referring to Section 11
Sub Section 2 of the CBN Act. Now under that provision, the reference
is to removal of the CBN governor by the president and there is a
qualification there saying that provided that removal is supported by
2/3rd majority of the Senate."
"But what the president has done, is not removal, it is suspension.
You know you do not read the provision in isolation, you read them
together and the interpretation Act, if you read all of these
provisions together,the thrash point is that he who hires can also has
the power to suspend."
"So if you have the power to appoint, you also have the power to
suspend. What has happened is not removal, it is suspension and that
is perfectly within the purview of the law."
On why he was not suspended before now, Abati: "I spoke of
investigation. Investigation is a process. It is not that you raise a
query and that query is answered and then you immediately take a
decision.
And of course even with the report from financial reporting council, I
told you that investigation are still continuing because there are so
many issues from the FRC running into pages upon pages with annexus."
From a document of the Financial Reporting Council of Nigeria sighted
in Abuja yesterday, the particulars of the infractions against Sanusi
are:
"Persistent refusal and/or negligence to comply with the Public
Procurement Act in the procurement practices of the Central Bank of
Nigeria.
"(A) By virtue of Section 15 (1)(a) of the Public Procurement Act, the
provisions of the Act are expected to comply to 'all procurement of
goods, works and services carried out by the Federal Government of
Nigeria and all procurement entities.' This definition clearly
includes the Central Bank of Nigeria.
"(B) it is however regrettable that the Central Bank of Nigeria, under
your leadership, has refused and/or neglected to comply with the
provisions of the Public Procurement Act (PPA). You will recall that
one of the primary reasons for the enactment of the PPA was the need
to promote transparency, competitiveness, cost of effectiveness and
professionalism in the public sector procurement system.
"(C) available information indicates that the Central Bank has over
the years engaged in procurement of goods, works and services worth
billions of Naira each year without complying with the express
provisions of the PPA.
"(D) by deliberately refusing to be bound by the provisions of the
Act, the CBN has not only decided to act in an unlawful manner, but
has also persisted in promoting a governance regime characterised by
financial recklessness, waste and impunity, as demonstrated by the
contents of its 2012 Financial Statements.
"Unlawful expenditure by the Central Bank of Nigeria on 'Intervention
Projects' across the country
"(A) the unacceptable level of financial recklessness displayed by the
leadership of the Central Bank of Nigeria is typified by the execution
of 'Intervention Projects' across the country. From available
information, the bank has either executed or is currently executing
about 63 such projects across the country and has committed over
N163billion on them.
"(B) it is inexcusable and patently unlawful for any agency of
government to deploy huge sums of money as the CBN has done in this
case, without appropriation and outside CBN's statutory mandate. It is
trite that the expenditure of public funds by any organ of government
must be based on clear legal mandates, prudent costing and overriding
national interest.
"Financial infractions and acts of financial recklessness committed by
the Central Bank as reflected in its audited financial statements of
2012
"(A) pursuant to Section 50 of the CBN Act 2007, a copy of the audited
financial statements of the CBN for the year ended 31st December 2012
was sent to Mr. President. Based on the issues raised in the financial
statement, a reinsertion was requested from you to enable a proper
appreciation of the nation's economic outlook.
"(B) the response to this query was further referred to the Financial
Reporting Council of Nigeria.
"The review by the council, rather than allay the fears of government,
further confirmed concern bout the untidy manner in which you have
generally conducted the operations of the CBN.
"Some of the salient observations arising from the review are;
"(A) in a most ironical manner, it has become obvious that the CBN is
not able to prepare its financial statements using applicable
International Financial Reporting Standards (IFFS) whereas Deposit
Money Banks that the CBN is supervising have complied with this
national requirement since 2012.
"Undoubtedly, this laxity on the part of our apex bank, apart from
calling to question its capacity for proper corporate governance, is
capable of sending wrong signals to both domestic and international
investors on the state of the Nigerian economy.
"(B) the provisions of the Memorandum of Understanding (MOU) signed by
the CBN and other Deposit Money Banks on Banking Resolution Sinking
Fund have been breached in a material manner. For example, a Board of
Trustees (BOT) to manage the Fund has not been constituted since 2010
when it was established. The CBN has however continued to utilise the
Fund for certain operations without approval of the said BOT.
"(C) contrary to section 34 (b) of the CBN Act 2007 which provides
that the CBN shall not, except as provided in Section 31 of the Act,
inter alia, purchase the shares of any corporation of company, unless
an entity set up by the approval or authority of the Federal
Government,m CBN in 2010, acquired 7% shares of International Islamic
Management Corporation of Malaysia to the tune of N0.743 billion. This
transaction was neither brought to Mr. President's attention nor was a
board approval obtained before it was entered into.
"(D) the CBN has failed or refused to implement the provisions of the
Personal Income Tax (Amendment) Act 2007. Accordingly the
Pay-As-You-Earn (PAYE) deductions of its staff are still being
computed in accordance with the defunct Personal Income Tax Act 2004,
thus effectively assisting its staff to evade tax despite the generous
wage package in the CBN, relative to other sectors of the economy.
"(E) the CBN had an additional brought forward to General Reserve Fund
of N16.031 billion in 2012 but proceeded on a boy age of indefensible
expenses in 2012 characterised by inexplicable increases in some heads
of expenditure during the year.
Examples include:
"1. The bank spent N3.086 billion on "promotional activities" in 2012
(up from N1.084 billion in 2011). The bank spent this sum even when it
is not in competition with any other institution in Nigeria;
"2. The CBN claimed to have expended N20.202 billion on 'Legal and
Professional Fees' in 2011 beyond all reasonable standards of prudence
and accountability;
"3. Between expenses on 'Private Guards' and 'Lunch for Policemen',
the CBN claimed to have spent N1.257 billion in 2012;
"4. While Section 6(3)(c) of the CBN Act 2007 provides that the board
of the CBN is to make recommendations to Mr. President on the rate of
renumeration to Auditors, the bank has consistently observed this
provision in breach and even went to the extent of changing one of the
Joint External Auditors without notifying the office of the President.
"5. In the explanations offered by the CBN pursuant to presidential
directives, it offered a breakdown of 'Currency Issue Expenses' for
2011 and 2012. Interestingly, it claimed to have paid N38.233 billion
to the Nigerian Security Printing and Minting. Company Limited (NSPMC)
in 2011 for 'Printing of Banknotes.'
Paradoxically however, in the same 2011, NSPMC reported a total
turnover of N29.370 billion for all its transactions with all clients
(including the CBN).
"6. It is significant to note that the external audit revealed
balances of sundry foreign currencies without physical stock of
foreign currencies in the CBN Head Office.
"Questionable write-off of N40 billion loans of a bank
"The above issues are only a few of the infractions highlighted by the
review and which point to the gross incompetence and recklessness
which characterised the operations of the CBN in the period under
review."
Government's action solely based on probe by Financial Reporting
Council of Nigeria
Presidential spokesman, Dr. Reuben Abati has disclosed that the
suspension of the Governor of the Central Bank of Nigeria (CBN),
Sanusi Lamido Sanusi earlier announced yesterday was purely based on
the investigation being carried out by the Financial Reporting Council
of Nigeria since May last year.
Briefing State House correspondents at the Presidential Villa, he said
that the suspension has nothing to do with the appearances of Sanusi
or his claims before the Senate Investigative committee on the alleged
missing money from the Federation Account.
Sanusi Lamido had claimed that huge sums of money has been missing and
not remitted to the Federation Account by the Nigerian National
Petroleum Corporation (NNPC).
Abati said that there is no cause for anxiety by the stakeholders and
the international community as Nigeria's monetary policy remains the
same despite the suspension.
He said that the Government remains committed to the stability of the
economy, stability of the naira and stability of the country's
monetary policies.
Stressing that the investigation on Sanusi Lamido's financial
recklessness is still on-going, he said that there is nothing wrong in
naming a successor for his position months to the expiration of his
tenure.
According to him, President Goodluck Jonathan has not flouted the CBN
Act or any law as he did not 'remove' the CBN governor but 'suspended'
him, adding that he who has the power to hire also has the power to
suspend.
He said: "On the suspension of the CBN governor, the statement was
very clear that the president has had to take this decision as part of
attempt to strengthen the CBN to ensure that that apex bank continues
to be symbol for prudence, integrity and accountability."
"That statement also made it clear that there has been issue regarding
the financial recklessness and also violation of due process and the
mandate of the CBN. And in that statement of course it was then made
clear that with Mallam Sanusi proceeding on suspension, the most
senior Deputy governor Dr. Sarah Alade will assume the office in an
acting capacity until various reported breaches have been investigated
and resolved."
"Since that announcement there has been many inquiries particularly
with regards to the point of financial recklessness and breaches,
there has also been a lot of speculation in both local and foreign
media. There has been an expression of anxiety."
Continuing, Abati said: "On the issue of anxiety, I think nobody needs
to be anxious this decision has not been taken on the country's
monetary policy, the monetary policy of the country remains the same
and there is stability in the system and so investors in the Nigerian
economy have no reason whatsoever to fear."
"That decision was taken only with regards to internal governance
issue within the central bank. In the statement issues raised were
very clear that there are issues of internal governance.
Government remains committed to the stability of the economy,
stability of the naira and stability of the country's monetary
policies."
"The lady who has taken over in acting capacity has been long within
the system and so everyone can remain assured that there will be
stability and that the institution will remain very strong."
Abati noted that the second concern been expressed has to do with the
issue of financial recklessness.
"I will like to say that there were issues of financial recklessness
and unprofessional conduct but that did not happen today. It is not as
if this is a sudden development, but that it's been a long process
dating back to last year."
"Last year when the CBN submitted it's financial statement for the
year ended 31st December 2012, a query was raised about some of the
issues in the financial statement and the CBN governor was asked to
offer some clarification with regards to these issues. This was around
first week of May 2013. A response came from the CBN which was then
forwarded to the Financial Reporting Council of Nigeria."
"And the Financial Reporting Council of Nigeria by its Act is
empowered to review the accounts of the CBN and if there is course for
investigation, to conduct such investigation. And if there is need
also to invite other bodies to further investigate, the law makes
allowance for that."
"And that took place. And some of the outcomes of that process relates
to the issues raised about financial recklessness." He added
Listing some of the alleged offences, Sanusi Lamidobis being
investigated, he said:
"If I may just draw attention to a few of them: the persistent refusal
and negligence to comply with public procurement act in the
procurement practices of the CBN; unlawful expenditure by the CBN on
intervention projects across the country, deploying huge sums of money
as the CBN did under the watch of Mallam Sanusi without appropriation
and outside the CBN's statutory mandate."
"It is said that the expenditure of public funds of course by any
organ of government must be based on clear legal mandate, prudent
constrain and overriding nation interest.
And then financial infraction and act of financial recklessness
committed by the CBN and reflected in its audited financial statement
for 2012."
"If you need more details I will be glad to provide those details
because is a long list of infractions. But it is on the basis of all
of this and to allow for further investigations that the CBN governor
has been asked to step aside."
He said that rather than alley the fear of government on those
allegations, the Financial Reporting Council of Nigeria confirmed
concerns about the untidy manner in which the affairs of the CBN were
conducted.
On allegation that the suspension was aimed at disrupting Sanusi
Lamido's testimony before the Senate Investigative panel, Abati said:
"The question has also been raised on whether this has to do with the
ongoing appearances in the National Assembly by the suspended CBN
governor. I will like to state very clearly that this has nothing to
do with that. I have given you the background so that you can see that
this is the process."
"This government remains committed to ensuring integrity and
accountability and discipline in every sector of the economy. And it
encourages persons who have issues, who have things to say to
expressed their rights through the freedom of expression under the
constitution. Indeed the government of Nigeria is also interested in
what the legislature is doing and do not be surprise if government
goes further to initiate further audits as has been suggested in some
quarters."
"And indeed we look forward to a situation whereby Mr. Sanusi will
continue to assist the legislature in their investigations and will
continue to testify because what government is interested in really is
transparency and accountability and anything that will further promote
that objective is perfectly welcome." He said
Asked why the government didn't wait till Sanusi's retirement in June
before forwarding his replacement to the Senate, he said: "Well, I do
not see untidiness in this.
You know there are two vacancies, the suspended governor was due to
retire in June and with the retirement of former Deputy governor Tunde
Remo, there was also a vacancy at the deputy governor's level."
"In many countries of the world, you do not wait till the last minute
before you appoint successor particularly into a position in such a
strategic institutions as the CBN. You allow room for proper
transition and for the market to get to know who the new persons are."
"And with regards to the position of the CBN governor, I think
announcing the nomination for that position is good for the market, it
builds confidence, it reassures the market that there is no crisis,
there is stability and that the institution is in good standing."
"It has nothing to do with the CBN governor, as I told you there has
been a process of investigation with issues raised with regards to
internal governance system in the CBN. In the country like the UK, the
appointment of the current head of the Bank of England was announced
about four months ahead. So this helps the systeml, it builds
confidence and doesn't keep the market in the dark. I think if
anything, the president should be commended for immediately making
these nominations to show that the institution remains strong and in
very good standing."
Abati said that he was not aware of the alleged threat by Sanusi to
challenge the illegality of his suspension or any order given for
Sanusi's arrest
He said: "I'm not aware of any directive that he should be arrested as
at this moment.
But of course you know that under the enabling act of the Financial
Reporting Council of Nigeria, where an indictment is established and
all that, the law could take its course but as at this moment I'm not
aware of any directive that he should be arrested."
"The second one when you say the illegality of his suspension, I do
not understand what you mean by that, although I am aware that some
people are saying oh this is illegal but it is not."
"People who talk about illegality, they are referring to Section 11
Sub Section 2 of the CBN Act. Now under that provision, the reference
is to removal of the CBN governor by the president and there is a
qualification there saying that provided that removal is supported by
2/3rd majority of the Senate."
"But what the president has done, is not removal, it is suspension.
You know you do not read the provision in isolation, you read them
together and the interpretation Act, if you read all of these
provisions together,the thrash point is that he who hires can also has
the power to suspend."
"So if you have the power to appoint, you also have the power to
suspend. What has happened is not removal, it is suspension and that
is perfectly within the purview of the law."
On why he was not suspended before now, Abati: "I spoke of
investigation. Investigation is a process. It is not that you raise a
query and that query is answered and then you immediately take a
decision.
And of course even with the report from financial reporting council, I
told you that investigation are still continuing because there are so
many issues from the FRC running into pages upon pages with annexus."
From a document of the Financial Reporting Council of Nigeria sighted
in Abuja yesterday, the particulars of the infractions against Sanusi
are:
"Persistent refusal and/or negligence to comply with the Public
Procurement Act in the procurement practices of the Central Bank of
Nigeria.
"(A) By virtue of Section 15 (1)(a) of the Public Procurement Act, the
provisions of the Act are expected to comply to 'all procurement of
goods, works and services carried out by the Federal Government of
Nigeria and all procurement entities.' This definition clearly
includes the Central Bank of Nigeria.
"(B) it is however regrettable that the Central Bank of Nigeria, under
your leadership, has refused and/or neglected to comply with the
provisions of the Public Procurement Act (PPA). You will recall that
one of the primary reasons for the enactment of the PPA was the need
to promote transparency, competitiveness, cost of effectiveness and
professionalism in the public sector procurement system.
"(C) available information indicates that the Central Bank has over
the years engaged in procurement of goods, works and services worth
billions of Naira each year without complying with the express
provisions of the PPA.
"(D) by deliberately refusing to be bound by the provisions of the
Act, the CBN has not only decided to act in an unlawful manner, but
has also persisted in promoting a governance regime characterised by
financial recklessness, waste and impunity, as demonstrated by the
contents of its 2012 Financial Statements.
"Unlawful expenditure by the Central Bank of Nigeria on 'Intervention
Projects' across the country
"(A) the unacceptable level of financial recklessness displayed by the
leadership of the Central Bank of Nigeria is typified by the execution
of 'Intervention Projects' across the country. From available
information, the bank has either executed or is currently executing
about 63 such projects across the country and has committed over
N163billion on them.
"(B) it is inexcusable and patently unlawful for any agency of
government to deploy huge sums of money as the CBN has done in this
case, without appropriation and outside CBN's statutory mandate. It is
trite that the expenditure of public funds by any organ of government
must be based on clear legal mandates, prudent costing and overriding
national interest.
"Financial infractions and acts of financial recklessness committed by
the Central Bank as reflected in its audited financial statements of
2012
"(A) pursuant to Section 50 of the CBN Act 2007, a copy of the audited
financial statements of the CBN for the year ended 31st December 2012
was sent to Mr. President. Based on the issues raised in the financial
statement, a reinsertion was requested from you to enable a proper
appreciation of the nation's economic outlook.
"(B) the response to this query was further referred to the Financial
Reporting Council of Nigeria.
"The review by the council, rather than allay the fears of government,
further confirmed concern bout the untidy manner in which you have
generally conducted the operations of the CBN.
"Some of the salient observations arising from the review are;
"(A) in a most ironical manner, it has become obvious that the CBN is
not able to prepare its financial statements using applicable
International Financial Reporting Standards (IFFS) whereas Deposit
Money Banks that the CBN is supervising have complied with this
national requirement since 2012.
"Undoubtedly, this laxity on the part of our apex bank, apart from
calling to question its capacity for proper corporate governance, is
capable of sending wrong signals to both domestic and international
investors on the state of the Nigerian economy.
"(B) the provisions of the Memorandum of Understanding (MOU) signed by
the CBN and other Deposit Money Banks on Banking Resolution Sinking
Fund have been breached in a material manner. For example, a Board of
Trustees (BOT) to manage the Fund has not been constituted since 2010
when it was established. The CBN has however continued to utilise the
Fund for certain operations without approval of the said BOT.
"(C) contrary to section 34 (b) of the CBN Act 2007 which provides
that the CBN shall not, except as provided in Section 31 of the Act,
inter alia, purchase the shares of any corporation of company, unless
an entity set up by the approval or authority of the Federal
Government,m CBN in 2010, acquired 7% shares of International Islamic
Management Corporation of Malaysia to the tune of N0.743 billion. This
transaction was neither brought to Mr. President's attention nor was a
board approval obtained before it was entered into.
"(D) the CBN has failed or refused to implement the provisions of the
Personal Income Tax (Amendment) Act 2007. Accordingly the
Pay-As-You-Earn (PAYE) deductions of its staff are still being
computed in accordance with the defunct Personal Income Tax Act 2004,
thus effectively assisting its staff to evade tax despite the generous
wage package in the CBN, relative to other sectors of the economy.
"(E) the CBN had an additional brought forward to General Reserve Fund
of N16.031 billion in 2012 but proceeded on a boy age of indefensible
expenses in 2012 characterised by inexplicable increases in some heads
of expenditure during the year.
Examples include:
"1. The bank spent N3.086 billion on "promotional activities" in 2012
(up from N1.084 billion in 2011). The bank spent this sum even when it
is not in competition with any other institution in Nigeria;
"2. The CBN claimed to have expended N20.202 billion on 'Legal and
Professional Fees' in 2011 beyond all reasonable standards of prudence
and accountability;
"3. Between expenses on 'Private Guards' and 'Lunch for Policemen',
the CBN claimed to have spent N1.257 billion in 2012;
"4. While Section 6(3)(c) of the CBN Act 2007 provides that the board
of the CBN is to make recommendations to Mr. President on the rate of
renumeration to Auditors, the bank has consistently observed this
provision in breach and even went to the extent of changing one of the
Joint External Auditors without notifying the office of the President.
"5. In the explanations offered by the CBN pursuant to presidential
directives, it offered a breakdown of 'Currency Issue Expenses' for
2011 and 2012. Interestingly, it claimed to have paid N38.233 billion
to the Nigerian Security Printing and Minting. Company Limited (NSPMC)
in 2011 for 'Printing of Banknotes.'
Paradoxically however, in the same 2011, NSPMC reported a total
turnover of N29.370 billion for all its transactions with all clients
(including the CBN).
"6. It is significant to note that the external audit revealed
balances of sundry foreign currencies without physical stock of
foreign currencies in the CBN Head Office.
"Questionable write-off of N40 billion loans of a bank
"The above issues are only a few of the infractions highlighted by the
review and which point to the gross incompetence and recklessness
which characterised the operations of the CBN in the period under
review."
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