ABUJA - Nigeria's President Goodluck Jonathan suspended the central bank governor on Thursday for alleged financial recklessness, sidelining a prominent government critic as he readies for an expected re-election campaign.
Lamido Sanusi, whose term was due to expire in June, became embroiled in controversy after he accused the state Nigerian National Petroleum Corporation (NNPC) of misappropriating $20 billion (14.5 billion euros) of public funds.
Sanusi was widely applauded by local and foreign economists for overhauling a rotten banking sector and stabilising the currency in Africa's most populous country and top oil producer.
But his vocal anti-corruption crusades earned him powerful political enemies.
Jonathan has not yet announced his candidacy for the polls next February but is widely thought to be seeking another term, even as his Peoples Democratic Party (PDP) faces an unprecedented internal crisis and criticism is mounting over his failure to contain the brutal Boko Haram Islamist insurgency.
Analysts said that Jonathan may have removed Sanusi to erode the independence of the central bank and install a governor who may look the other way as ruling party heavyweights dip into the public purse ahead of the 2015 vote.
A statement from Jonathan's office said probes into Sanusi's performance revealed that his "tenure has been characterised by various acts of financial recklessness and misconduct".
It announced his "immediate suspension" and said he would be replaced by the bank's most senior deputy governor, Sarah Alade.
Missing $20 billion?
Sanusi first alleged last year that the NNPC had failed to pay the government $50 billion in oil related revenues.
In the face of enormous political pressure, he backtracked and revised the figure down to $12 billion, opening himself to heavy criticism.
But earlier this month he insisted that Nigeria had lost out on $20 billion between January 2012 and July 2013 partly related to suspicious kerosene subsidy payments by the NNPC.
A Financial Times report, citing Sanusi's private documentation, alleged that the NNPC was continuing to pay subsidies to kerosene vendors even though Nigerians still pay full market price for the product.
Late president Umaru Musa Yar'Adua is believed to have scrapped the kerosene subsidy in 2009, meaning the NNPC subsidy payments may be illegal.
The NNPC has aggressively hit back, accusing Sanusi of not understanding the technicalities of the oil business.
The company has also said that the kerosene subsidy removal was never approved by lawmakers so the company must continue to make the payments. It blamed unethical kerosene sellers for the fact that consumers continue to pay full price.
Silencing a critic
Sanusi's removal will likely end serious investigation into the NNPC affair and experts warned his departure could lead to less scrutiny of how public funds are spent in an election year.
Shilan Shah, the Africa Economist at London-based Capital Economics, told AFP that "there is a risk" the new central bank governor will keep quiet if irregular political spending ramps up but added that the implications of his ouster are not yet clear.
Debo Adeniran of Nigeria's Coalition Against Corrupt Leaders said Jonathan "cannot tolerate" a central bank boss who exposes "the rot in government" in an election year.
Jonathan's PDP has been bleeding support in recent weeks, with dozens of lawmakers defecting to the main opposition All Progressives Congress, a new formidable coalition that groups many of the president's top rivals.
Boko Haram's Islamist uprising in the northeast has piled further pressure on Jonathan, with more than 300 people killed in a range of massacres already this year.
With the worsening violence, Jonathan may struggle to retain the northern support that was crucial to his 2011 election.
The most recent attack in the town of Bama in Borno state killed 60 people on Wednesday.
It came as Boko Haram chief Abubakar Shekau, in a video sent to AFP, threatened to widen his rebellion to the southern, oil producing Niger Delta region, Jonathan's home area.
Shekau, who has said we wants to create a strict Islamic state in Nigeria's mainly Muslim north, may not be able to orchestrate attacks outside his stronghold, but any widening of the insurgency could further weaken Jonathan's political prospects.