Date Published: 09/05/09

EDITORIAL: The House and CBN Governor brouhaha over bail out money

Last Wednesday the Central Bank of Nigera(CBN), Governor, Lamido Sanusi was tackled by members of the House of Representatives’ committee on Banking and Currency over the N420 billion bail out fund for five banks without recourse to the National Assembly. The committee described the move by Sanusi as an affront on its powers and control over public funds. But the CBN boss insisted that the apex’s bank’s actions were in line with the CBN Act and within the regulatory framework of the Banks and Other Financial Institutions Act (BOFIA). According to Sanusi, the money injected into the banks is considered a loan (tier 2 capital) and not equity.

The House’s argument is hinged on Section 80 (1) of the 1999 constitution which says “ All revenues or other monies raised or received by the Federation ( not being revenues or other monies payable under this constitution or any Act of the National Assembly into any other public fund of the federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation” Section 2 says “ No moneys shall be withdrawn from the consolidated revenue fund of the federation except to meet expenditure that is charged upon the fund by this constitution or where the issue of those moneys has been authorized by an Appropriation Act, Supplementary Appropriation act, or an Act passed in pursuance of Section 81 of the constitution”

Sanusi however backed his action with the CBN Act 2007, Section 42 (2) which says “Notwithstanding the provisions of Section 29 (1) and Section 34 (d) of this Act, the bank may grant loans and other accommodation facilities at such rate of interest and on such terms as the bank may determine to any bank which may be having liquidity problems”

Sanusi maintained that the N420 billion was a loan (tier 2 capital), which is expected to be repaid.

After a series of back and forth, the members, as usual suggested they go into a closed door. Ofcourse the press and the public were sent packing.

The development will not shock anyone who has been following the rot in Nigeria and particularly the National Assembly. The trend is whenever a minister or head of parastatal makes a move involving billions of Naira, the relevant committee summons the top gun, quickly put together a so called public hearing..(This definitely is closed later). It is believed that at the closed door session, cards are laid on the table, and shortly after the issue dies.

The chairman of the Banking Committee, Ogbuefi Ozomgbachi tried to deny this tactics on Friday . He described it as our “constitutional responsibilities”. As a matter of fact the committee was reacting to insinuations that the move on Sanusi was sponsored by some interest groups including Rock Engineering. one of the indicted debtors (N36.98 billion)

Eseme Eyiboh, Chairman, Media argued that it was unfortunate that “ some persons could think that the lawmakers would require the sponsorship of any external body for the House to rise up to its constitutional responsibilities.”

On why Ozomgbachi used the writing pad of Rock to take notes on the day of the hearing, he said he did because it was the next available writing sheet. But skeptics will continue to insinuate because these lawmakers have acted dishonorably on several occasions.

We recall several probes and hearings including the hyped probe on the power sector. At the end of the day, the truth came to light. Truth is, the House and senate are peopled by several shady characters. Membership is not based on experience or any reasonable factor. The Senate President or Speaker picks his men, some times recommended by old crooks outside NASS. Most members do not even know anything about the sector they are supposed to carry out oversight functions. They just waddle to the meetings, snooze and wait for the public officer to start talking business.

Public officers like Sanusi will continue to disrespect NASS is so far they continue to ask them, during screening to take a bow and leave, or they continue to encourage closed doors. We also blame the whole confusion on the defective constitution and the inability of those who put together these Acts to first look at what the constitution says.