By PROVIDENCE OBUH
Former Minister of Finance Chief Anthony Ani has condemned the Central Bank of Nigeria, CBN, for usurping issues on fiscal and monetary policies, stating that there are clear differences on both policies.
Ani who spoke at a public lecture organized by Business Hallmark, titled ?How autonomous should the CBN be?, said, ?there are three? arms of government, the Legislature, Executive and the Judiciary, and the CBN is part of the Executive and must be seen as such. Let the CBN hands off from all matters relating to fiscal policies, these are the duties of the Minister of Finance.?
His words, ?In most countries, the CBN only deals with monetary policies, that is: inflation, interest rate, exchange rate, job creation etc. while fiscal policies are taken care of by another body entirely different from the CBN. ?I have never seen a country where the CBN takes over the functions of the minister of finance. The minister is the authority that advices government on all financial matters.
?The Governor of the CBN can not be the beginning and the end of everything that happens at the CBN, there must be some directions some where. We must try to unload the CBN, they are chewing much more than they can swallow.
The CBN alone can not cope with regulatory and supervisory role of the financial industry, let the National Assembly come out to do more by splitting the supervisory function of the CBN.
Speaking further, the former minister said that the Asset Management Corporation of Nigeria (AMCON) is a useless venture, pointing out that the bad debts they claimed to be buying are debts that cannot be recovered.
?Those debts arose because the owners of those banks were those who actually incur those debts and they could not pay, so you are bailing them, you are not bailing anybody out. The question is who gave him that money, who authorized him, where is the N4 trillion coming from? Some banks are dead already, instead of you to liquidate them you merge them, they will all die,? he yelled.
Recalling his days as the Minister of Finance he stated, ?When I was the Minister of Finance, I had no economist in my ministry, my permanent secretary did history, the next person did library studies, when that one was replaced, the next person that came did religion, this was in the ministry of finance. My Director of budget did history, so I had no economist except me.
?But I had people, I had to go to Nigerian Economic Society (NES) and made my Ministry to be a member of the NES, all my policies were sent for simulation by NES and by the time those policies came out no body can query them. NES gave me an economist whom I elected as into my financial advisory committee. He was permanently with me and when ever economic issues came, I hand it over to them. In CBN I don?t know how they have done it, but it appears we do not have the right people at the right place.
Way forward
?Rather than amend the CBN Act in order to bring the budget of the apex bank under the control of the National Assembly (and this is how the public understands and interprets the ongoing procedure in the esteemed Chambers), what our legislators should consider is how to strengthen the existing legal framework. Perhaps we should be looking at the direction of ensuring that the all-powerful governor of the CBN is brought under checks and balances,? Dr. Abiodun Adedipe, an Economist/Banker submitted.
Adedipe submitted further: ?This can be achieved by identifying important and critical issues in central banking, and build in relative limits as well as penalties for not respecting them. For instance, when Nigeria was considering the adoption of inflation targeting, the global survey revealed that some jurisdictions had sanction attached to the inflation target that would mean the governor could be relived of his/her appointment.
However, it was also noted that no central bank governor anywhere in the world has lost his or her appointment for national economy missing its inflation target. It has been convincingly argued that both price and financial stability are key to achievement of sustainable real economic growth. These two can only be assured when the central is autonomous in all three perspectives to autonomy that I mentioned earlier.
Indeed, this is the ultimate aim of any responsible leader or leadership team of any forward looking society. The bottom line is ?do we want inclusive growth in Nigeria. By all means we want this, after eight unbroken years of GDP growth above six per cent every year, which has not converted to development. Getting serious about growing the economy in a sustainable manner requires an autonomous central bank whose objectives are clearly stated and single-mindedly pursue. The central bank governor is not the same as the central bank.?
There is nothing wrong with CBN?s 2007 act. The CBN?s 2007 act is the best we can have for now, everything is provided, the problem we have in this country is that of implementation and enforcement of the law that we have set, says Mazi Okechukwu Unegbu, Managing Director/Chief Executive, Maxifund Investment and Securities Limited maintained that Nigeria has good comparative law in banking, but that what they lack is the human element to enforce and implement the laws they are making.
According to him, ?I do not think we should worry about the autonomy of the CBN, what we should worry about is to ensure that those that are superintending the act, do it in accordance with the law.
?If you look at the organogram of the CBN it is not very clear who has what responsibility, the major problem here is that when the CBN governor does take certain actions that is counter productive of the act.?
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