* Nigerian central bank governor Sanusi suspended by
* Sanusi's oil graft allegations had upset political power
* Campaigners say resources wealth corrupts, holds back
* Sanusi fate seen a cautionary tale for new producer
* "You can't suspend the truth," says Sanusi
By Pascal Fletcher
JOHANNESBURG, Feb 21 Oil and politics make a
turbid mix, and the suspension of Nigeria's central bank chief
and anti-graft whistleblower Lamido Sanusi is a cautionary tale
for newer African oil producers trying to avoid the "resource
President Goodluck Jonathan suspended Sanusi on Thursday,
citing "acts of financial recklessness", only weeks after the
internationally respected bank governor had publicly upbraided
state oil company Nigeria National Petroleum Corporation (NNPC)
with allegations that it had failed to remit $20 billion owed to
federal government coffers.
NNPC denies the allegations.
"They needed to get him out so they could keep on collecting
the money as they want," Auwal Ibrahim Musa "Rafsanjani",
Executive Director of the Civil Society Legislative Advocacy
Centre (CISLAC), a group that seeks to promote better governance
in Nigeria, told Reuters.
Jonathan acknowledges that corruption exists in Nigeria, but
says it is exaggerated by his enemies to discredit him.
Rafsanjani said Sanusi's suspension was a "deliberate
attempt to silence whistleblowers in the country". Presidential
spokesman Reuban Abati denies it was politically motivated.
The targeting of Sanusi, 52, rattled Nigeria's markets and
alarmed foreign investors who saw him as an anchor of stability
in Africa's No. 1 energy producer, which has long had a
reputation for corruption as murky as the oil-producing Niger
Delta's viscous creeks.
Sanusi plans to challenge the legality of his suspension,
although he says he does not want his job back.
Analysts and anti-corruption campaigners see domestic
politics behind the move as Nigeria heads for elections in 2015
in which Jonathan, battered by graft scandals and a raging
Islamist insurgency in the north, may stand for a second term.
Embarrassed by Sanusi's vocal denunciations of the massive
leakage of government oil revenues, the president is battling to
shore up political alliances and patronage networks lubricated
by the natural commodity that provides 90 percent of the
nation's foreign exchange and 80 percent of state income.
"Even though the elections are in 2015, the jockeying and
deal-making have already started, and the oil sector is very
much part of that," Alexandra Gillies, Head of Governance at the
New York-based Revenue Watch Institute, told Reuters.
"What decides who wins elections in Nigeria is not the
governance record of officials, it's the way you strike deals."
The "resource curse" theory holds that hydrocarbon and
mining booms in poor countries, instead of blessing them with a
shower of wealth for all, in fact poisons their economic and
political development by undermining democracy, encouraging
chronic corruption and entrenching selfish ruling elites.
"It's a cautionary tale that newer and smaller (oil)
producers on the continent need to pay attention to," Gillies
added, referring to Ghana in West Africa and East African
nations who are developing fledgling oil and gas industries.
Gillies was surprised Jonathan acted against such a
high-profile individual like Sanusi, who had turned himself into
an anti-corruption figurehead and fixture at international
In 2011, Sanusi, a career banker, Fulani nobleman and
Islamic scholar with a penchant for colourful bow ties, was
featured by Time magazine among their 100 most influential
people in the world, lauded for his stated ambition to clean up
"not just banking, but all Nigeria".
He participated and spoke at last month's World Economic
Form in Davos, extolling the virtues of an independent central
bank, an institution he now says is under threat in Nigeria.
Jonathan, who has made past public pledges to curb graft in
his country, had already infuriated transparency advocates by
declaring at Davos that corruption was not the biggest problem
facing African countries - he rated the northern Islamist Boko
Haram insurgency as his nation's most serious problem.
"Corruption is not a little thing in Nigeria; it literally
kills people," said Marie-Ange Kalenga, Transparency
International's regional coordinator for West Africa.
She said deep-rooted graft in Nigeria's public institutions
led to less investment in sectors such as maternal health, or
airline safety, which subsequently led to increased fatalities.
"Nigeria is clearly not a model for Africa," Kalenga said.
Yet while Sanusi's axing is a serious setback to Nigeria's
efforts to improve governance, advances are being made elsewhere
in Africa to improve financial transparency.
"Of course ... it's a blow for Nigeria, which is an economic
and political powerhouse of Africa, but this should not
overshadow real progress made elsewhere, in countries such as
Senegal, Niger and Ghana," Kalenga said.
"I do think there is a much wider awareness of the
importance of accountability. The levels of scrutiny are
higher," said Gillies, citing mineral-rich Guinea as another
country that was trying to improve due process in its mining
sector, for example by publishing all signed contracts.
INTERNATIONAL OUTRAGE "MISSING"
Transparency advocates say in top African energy producers
Angola, Nigeria and Equatorial Guinea the line separating the
oil sector from politics is very fuzzy, and countries needed to
develop stronger democratic institutions - like an independent
central bank - to avoid corrosive corruption.
The international community could help, too, by publicly
lobbying developing nations to apply due process and oversight
in the handling of their natural resources, Gillies said.
"I do think outrage is missing in how Nigeria is being
approached by the United States and other players," she said.
Although investors in Nigeria are used to challenging
conditions and expect a bumpy ride, the removal of such a
respected senior policy maker as Sanusi for apparently political
reasons could hurt future investment plans.
"In the immediate aftermath of Sanusi's removal, we expect
particularly foreign investors to continue reducing their
Nigeria holdings, with the naira remaining under pressure,"
Giulia Pellegrini, JP Morgan's Vice President, Emerging Markets
Research, Sub-Saharan Africa, told Reuters.
Nigeria's Coordinating Minister for the Economy and Minister
of Finance, Ngozi Okonjo-Iweala, who has staunchly defended the
government's efforts to reduce corruption and improve economic
management in the oil sector, sought to soothe rattled markets
and investors after Sanusi's suspension.
She said the administration's policies of maintaining
economic stability and a tight fiscal stance would not change
with Sanusi's departure and wished him well for the future.
Sanusi himself had no regrets about his outspoken campaign
to denounce oil theft in Africa's second-biggest economy.
"You can suspend an individual. You can't suspend the
truth," he told broadcaster CNBCA.
(Additional reporting by Tosin Sulaiman in Johannesburg;
Editing by Tim Cocks and Will Waterman)