corrected version! CBN and donation: Does law permit Sanusi to embark on charity spree? · Lawyers unanimous in condemnation of CBN's father Christmas posturing
KAYODE KETEFE The country's apex bank, Central Bank of Nigeria, has been constantly in the news under the leadership of the incumbent governor, Malam Lamido Sanusi, whose visibility in the public arena has soared in recent times. Sanusi was the energetic campaigner for highly controversial issues like Islamic banking and fuel subsidy removal. He is the one who also granted a putatively provocative interview to Financial Times of London in which he blamed the emergence of Boko Haram 13 per cent derivation being granted to the oil-producing states from the Federation Account The Central Bank boss has now opened another Pandora box which spawns intense legal controversies- this is N100 million donation he made on behalf of the CBN to victims of Kano Boko Haram terrorist attacks. "We are here to commiserate with the government and people of the state on the recent violent incident that claimed the lives and properties of victims and to present the contribution of the bank to the state." With these words, Sanusi graciously presented a N100 million cheque to the Kano State Deputy Governor, Dr Abdulahi Umar Ganduje, during a condolence visit he paid to the Kano State Government. Sanusi had said the donation is part of CBN's contribution to the state government to alleviate the sufferings of direct victims of the violence and their families. Although nobody would ordinarily go against rendering assistance to the victims of disasters or calamity, a lot of people have kicked against this particular charity for a number of reasons. While politicians and other vested interests have based their condemnation on issue like perceived discrimination in helping the victims by asking the questions, "Why starting with Kano? What about other victims like dependants of Christmas Day bombing in Madalla which preceded Kano's terroristic attacks?" lawyers have been examining the issue from the perspective of legality. They are asking the question "Does the CBN have the statutory empowerment and responsibilities to be making such donations?." After the spate of criticisms which greeted the donation, the CBN seems only concerned about socio-political aspect of its gesture without addressing the legal aspect. For example the CBN, in its defence stated it would extend the gesture to the victims of the bomb attack on the Christmas at St. Theresa Catholic Church in Madalla,Niger State. While this addresses the question of balance and social justice, it has nothing to offer on whether or not CBN has the power to make extra-budgetary donation from taxpayers' money. As the criticisms mounted, the apex bank again offers the following defence "It should be noted that this is not the first time that the Central Bank of Nigeria is assisting victims of disasters. Just recently, we built N500 million bridge that links the two campuses of University of Benin after series of mishaps" Many legal minds construe this explanation to be unnecessary circumlocution by the CBN which falls short of addressing the question of legality. The question of legality has become really necessary when one takes into cognizance the fact that the apex bank has over the years spent billions of naira on diverse charity projects, what is the implication if all these money have been donated illegally? For example, The CBN claims on its website to have spent millions of naira as charitable grants on 24 universities in Nigeria and it is still getting ready to do more. CBN states, "The Bank has so far spent the sum of over The questions troubling many people's minds is whether the topmost bank is not usurping the Federal government's executive duties by making such donations, more importantly as they appear to be extra- budgetary. Furthermore many would fault the bank's donation for relief purpose in emergencies, on the ground that there is a Federal Government's specialised agency, National Emergency Management Authority (NEMA) which has responsibilities for such assistance. This view is in consonance with the responsibilities of the NEMA stipulated under Section 6 of the NEMA Act, which empowers the agency to among other things, " co-ordinate the activities of all voluntary organisations; engaged in emergency relief operations in any part of the Federation; receive financial and technical aid from international organizations and non-governmental agencies for the purpose of disaster management in Nigeria; collect emergency relief supply from local and foreign sources and from international and non-governmental agencies.; and to distribute emergency relief materials to victims of natural or other disasters and assist in the rehabilitation of the victims where necessary." As for the CBN, the CBN Act of 2007 charges the Bank with the overall control and administration of the monetary and financial sector policies of the Federal Government. Furthermore, the Bank is saddled with the responsibility of administering the Banks and Other Financial Institutions (BOFI) Act (1991) as amended for the purpose of ensuring high standards of banking practice and financial stability via surveillance activities. The principal objectives of the CBN is stated in Section 2 of the CBN Act which stipulates same to be the following :"(a) ensure monetary and price stability; (b) issue legal tender currency in Nigeria (c) maintain external reserves to safeguard the international value of the legal tender currency; (d) promote a sound financial system in Nigeria; and (e) act as banker and provide economic and financial advice to the Federal Government." It would appear that it is the empowerment under the section 2 paragraph (d) above that the CBN invoked when it injected over 600 billion naira as bailout funds into some ailing banks following the spate of banking failure in 2009. The said bank failures which arose as a result of weak internal controls, lax credit administration and lack of sound corporate governance culture also led to the CBN sacking the management of the affected banks. The affected banks in 2009 were Oceanic Bank, Intercontinental Bank, Union Bank, FinBank and Afribank. Three banks, Afribank, Bank PHB and Spring Bank were also nationalised last year by the CBN which also sacked their Boards of Directors, replacing them with interim supervisors. The exercise of these powers by the CBN has generated a lot of controversies and even legal scholars, jurists and lawyers were not consensual in their interpretations of the CBN Acts provisions viz-a-viz invocation of the powers. At the moment , there are some cases still pending in court on this issue. However, if there is controversy as regards the CBN's power to take over management of failed banks especially in the light of provisions of the section 2, it would appear that there is nothing in the quoted principal objectives in section 2 or any other statutes that gives CBN power to have to embark on charity spree. This writer sought the views of a number of senior lawyers on this issue and all seem to have nothing but condemnation for CBN over this development. The big question put to these learned minds "is CBN legally empowered to use the taxpayers' money for humanitarian activity? In his view, Chief Felix Fagbohungbe SAN described the donation as embarrassing and wondered why the CBN governor did not extend similar gestures to other victims of violent attacks by Boko Haram in Yobe, Borno and Niger states. He argued that the CBN Act of 2007 mandated the apex bank to have overall control and administration of the monetary and financial sector policies of the Federal Government. Fagbohungbe said "Somebody occupying the exalted position of CBN governor ought to be a person who lives above parochial inclinations. Sanusi's donation to Kano victims only shows that he puts sectional interests above national interest even as governor of the apex bank. "The CBN is not a profit making organisation and nowhere in the CBN Act was it stated that the apex bank is required to use taxpayers' money for charitable activities. The CBN governor does not have the moral right to give cash donations from the public fund in his care or is it because he is from Kano. Only the Federal government can do so. The CBN governor shoud cite any provision of the CBN Act mandating the CBN to give cash donations. It is only commercial banks and other profit making organisation that could do so." Another Senior Advocate of Nigeria, Chief Festus Ajayi, put his response in a terse but very poignant way, saying "How can CBN make such a donation, where does it derive such powers? The CBN Act does not give such power; they are just doing what they like" A Lagos-based lawyer and popular human rights activist, Mr. Femi Falana, made a copious comment on the issue; he said "From the law setting up the CBN, the diversion of public funds to assist victims of disasters is illegal in every material particular. The management of the Central Bank cannot be allowed to continue to dissipate public funds under the pretext of carrying out any social responsibility outside the ambits of the law. "I wish to state, without any fear of contradiction, that the Central Bank has usurped the functions of NEMA by providing financial assistance to victims of disasters. In the light of the foregoing, the CBN Governor, Mallam Sanusi should be sanctioned for his reckless diversion of public funds. He should be made to refund public funds that have been illegally donated by him to schools and victims of disasters." The former First Vice-President of the Nigerian Bar Association, Mr. Adekunle Ojo, also berated the CBN's gesture he said "Ordinarily if Sanusi, had made the donation out of his own pocket and not from the public accounts, it would not have been illegal, but the way it is now Sanusi is guilty of breach of public trust. "The money he doled out is extra-budgetary and is illegal. It is ultra vires the powers of the CBN governor to give out money from the public treasury as he likes. The Executive should not fold its hands why the CBN Governor is doing what he likes with the public funds In saner countries, he would have been arrested by now and faced prosecution. "One keeps wondering where the Economic and Financial Crimes Commission is? Where is the Independent Corrupt Practices and Other Related Offences Commission? Are there Nigerians that are untouchable? A Lagos-based senior member of the bar, Mr. Pekun Sowole, said "No matter the good intention behind the such donations, the CBN would only be justified by doing same if only the CBN Act expressly empowers it to do so, if not, it would be very wrong and I don't really think the Act allows the CBN to do it." |
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