Central Bank of Nigeria, CBN Governor, Mallam Lamido Sanusi, on Tuesday explained that he exposed the shoddy management of oil revenue in the country by the Nigerian National Petroleum Corporation, NNPC, so that it could lead to people being asked to explain what they had done with the money.
The CBN governor had during his appearance on Tuesday before the Senate Committee on Finance, insisted that $20 billion crude oil proceeds have yet to be remitted to the Federation Account by the NNPC.
According to Sanusi, the controversy surrounding the missing oil revenue was also good for the country.
The CBN governor, whose tenure comes to an end June 2, spoke Tuesday night, while addressing the 2014 Standard Bank’s West Africa Investors Conference in Lagos.
His words: “A lot of the noise that is happening in the country today around me and the oil sector is good for the country because at the end of the day, if it leads to improved governance of oil revenue; if it leads to increased transparency or people having to be called to explain what they have done with the money- that is good for the system.
“People must not see controversy and noise as necessarily bad. I love controversy. If you think there has to be change and if you think a system needs to be improved; and if you get too comfortable in a system, you should ask yourself what has happened to you. You need to step on a few toes, annoy a few people, have your own toes stepped on. You will be annoyed once in a while, of course they will slap you once in a while”.
Sanusi, however, assured his audience of the commitment of the CBN to the stability of the exchange rate, saying the apex bank would continue to shore up the value of the Naira as long as there was a stable crude oil price.
“We have tried to build a stable environment and for us at the CBN, we have been very lucky to have had a very good partner in the finance ministry. If you look at government spending in 2013, it really wasn’t much higher in 2012 and fiscal policy is not in itself loose on the basis of government spending.
“The real challenge is that there are things that we can do to block some of the revenue shortfalls that are causing the problem — oil theft and bunkering because we have good oil price; we have got the output and if you fix that, the issue of reserves; currency stability, fiscal deficit would simply disappear. But government spending itself has not been the problem. It is largely because of the fiscal discipline in the last few years that our tight monetary policy has been able to work.
“We have been able to bring down inflation to single digit and it has been below 10 per cent since January 2012. It would remain below 10 per cent throughout 2014. I know there is speculation about how much money will come into the economy during elections, but how much money is there anyway? It’s $2.5 billion in the Excess Crude Account. So even if people want to spend money, the money won’t be available. So the risk from that end is not as high as people might think.
“The greater risk is if we continue to have deterioration in the revenue profile and that can be addressed because it is really a factor within our control. So we have low inflation and the CBN has a stable exchange rate as the cornerstone of its price stability policy and that has been communicated very clearly to the market.
“We have always had our eyes on stability. We are willing to tighten money; we are willing to use reserves within reasonable limits to give you the investors, an anchor for your expectations.
“We don’t want people to come to the market worrying about whether the Naira is going to be on a free fall. Now we do not guarantee that if oil prices fall, there will be no exchange rate movement. But so long as we have stable oil prices, stable output, stable macro conditions, we are committed to exchange rate stability and we will support the currency and that stability is what I think will continue in the future”, he said.
