The Minister of Finance, Mrs. Kemi Adeosun, yesterday asked for the reduction of the powers of the governor of the Central Bank of Nigeria (CBN).
She blamed the extensive powers of the governors for the disconnect between Federal Government’s monetary and fiscal policies.
She pleaded with the National Assembly that conferred the powers on the CBN boss, through a legal instrument, to slash them to pave the way for checks and balances.
If this becomes the case, the reaction time of the CBN to monetary upheavals will be greatly impaired as it is expected to act through a supervising agency. In fact, financial experts disagree, saying any such move will result in undue political interference in monetary policies, which will not augur well for the economy.
Adeosun made the call yesterday while receiving members of the House of Representatives Tactical Committee on Recession led by Bode Ayorinde.
She said it amounted to what she described as excesses on the part of the apex bank’s governor to decide and act on financial matters without recourse to the minister of finance, who is constitutionally required to supervise financial policies, programmes and activities of the Federal Government.
“I want to correct the impression that the CBN is under us. They are not. Unfortunately, a law was passed, making them independent and giving them more powers. This has resulted in one person having so much power.
“In the time of Prof. Charles Soludo as CBN governor, he went to the National Assembly asking for more powers and you can see where that has taken us to. So we are back to the legislature to help us correct this problem of too much power. As a result, there are no checks and balances,” she said.
Under the administration of former President Goodluck Jonathan, the then CBN governor ordered the sacking and trial of bank chiefs and introduced monetary policies to regulate certain activities in the financial sector.
But none of the CBN governors – including the incumbent, Godwin Emefiele, and former ones, Sanusi Lamido Sanusi, and Charles Soludo, picked their calls or responded to text messages from The Guardian to them. Soludo, whom Adeosun identified as the chief protagonist of the current impasse, in a text message response, merely said: “Sorry, I am abroad and can only be reached via text please.”
But industry analysts like the Director-General, West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, said such an idea should be thrown out immediately, as it was outdated and out of sync with modern global trends.
“I have no details, but if this is actually what she said, it is not acceptable. The Central Bank should remain independent and not be brought under the Ministry of Finance. Nigeria is too large and not equipped for that arrangement. The CBN should not be seen as a subset of the ministry,” he said.
Erstwhile banker and financial expert, Fola Adeola, reinforcing the CBN’s autonomy as a global practice, said the relationship between the ministry and CBN should be the coordination of monetary and fiscal policies.
“While I do not know exactly what she said and meant, but if the move is to reduce CBN’s powers, it may be tantamount to an infringement on its autonomy. On the other, if the matters in question are anything other than monetary policy issues, she may have a case to make,” he said.
The Deputy Managing Director of financial services advisory firm, Afrinvest Limited, Victor Ndukauba, is more concerned about how the adverse impact it would have on the larger economy by subjecting the CBN to the ministry’s supervision.
He said: “Ideally, the Central Bank should have only one function and that is monetary, controlling inflation. To say that the governor and the Central Bank should be under the control of the Executive would mean that any decision that is made by the CBN will be subjected to political influence. So, the place of the Central Bank is sacrosanct. In fact, if we are to take any step in removing or rolling back that independence, it would not augur well for us.”
In view of the challenges the principal parties may face in achieving set goals under the current economic crisis, Udukauba called for a synergy between the two, in order to realise common goals of stemming galloping inflation, cutting high unemployment rate and buoying economic activities.
Meanwhile, regarding the status of the sum accumulated from the implementation of the Treasury Single Account (TSA), Adeosun dismissed claims that the N5.244 trillion said to have been accumulated so far has either been appropriated or misappropriated.
“The position as regards the funds in the TSA is that we are thinking of using the balance in the account to back two initiatives. One is for the Development Bank of Nigeria that is coming up, while the other will be for the Bank of Agriculture, for lending to SMEs and farmers, respectively,” she explained.
The minister, who reeled out efforts of the administration in recovering funds through the ongoing workers’ verification, said the government had so far recovered about N6.8 billion pension funds allegedly stolen by certain officials.
She noted that corruption had been the bane of economic growth in the country, assuring that with the right policies in place, along with emphasis on capital projects, the country would quickly get out of recession.
Earlier, Ayorinde, who led the lawmakers, had solicited the cooperation of the Ministry in finding ways of boosting the economy. He said a public hearing that would deal with the management of recession was being planned for stakeholders.
The lawmaker urged the government to provide reliefs and incentives to manufacturers to enhance their activities and help resuscitate dying companies. As if taking up the task thrown at it by the finance minister, the Senate has invited the CBN Governor Godwin Emefiele, to explain the apex bank’s Intervention Funding Programmes to qualified Nigerian companies and exporters.
The upper legislative chamber also urged the bank to consider implementing expeditiously, the approvals and disbursement of intervention facilities to those companies in the real sector that merit such facilities.
The resolution followed a motion by Mao Ohuabunwa (PDP, Abia North), who maintained that Nigeria’s drive to haul the economy out of recession, will fail if qualified companies do not access the CBN facilities.
To this end, the legislative body invited the CBN governor to address it on the progress made so far through the use of its various intervention faculty programmes, including the list of beneficiary companies, factories and exporters.