Nairametrics| The Minister of Finance, Mrs. Kemi Adeosun has argued that the office of the Governor of the Central Bank of Nigeria (CBN), currently held by Godwin Emefiele, has too much power and independence. The Guardian quoted her making this statement during the visit to her office by members of the House of Representatives’ Tactical Committee on Recession, led by Bode Ayorinde.
“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.” she noted.
The Minister further backed up her call for a reduction in the powers of the CBN Governor by giving two main consequences of the current situation. First, she claimed that the current independence of the CBN from the Ministry of Finance is chiefly responsible for the ‘disconnect’ between Federal Government’s monetary and fiscal policies. Secondly, she claimed that it causes some excesses on the part of the apex bank’s governor’.
This is because, as it stands now, the CBN governor’s policies and actions on financial matters are not subject to the approval of the Minister of Finance, who is constitutionally required to supervise all financial policies, programs and activities of the Federal Government.
However, in a swift reaction, some financial experts have opposed Mrs. Adeosun’s claims, indicating that any such move to trim down the powers of the CBN Governor would be inimical to the country’s economy. The Director-General, West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, noted that such a call was archaic and not suited for current realities.
“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.
Another financial expert and Deputy Managing Director of financial services advisory firm, Afrinvest Limited, Victor Ndukauba, opined that placing the CBN under the Ministry would expose monetary policies to undue political influence, which could be detrimental to the country.
“Ideally, the Central Bank should have only one function and that is monetary, controlling inflation. To say that the Governor of 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.” he said.
A quick look at the reasons the Minister gave for her call also brings certain doubts to mind over the real motive behind it. For example, given that the office of the CBN Governor has been enjoying this ‘freedom’ for more than a decade, why is it under her watch that this ‘disconnect’ is coming up? Is she implying that Emefiele is difficult to work with, and so she prefers him working under her where he has to obey orders?
The very thought of a ‘Yes’ to the last question further solidifies why the CBN should remain independent. In other words, if not for the CBN’s independence, Madam Adeosun would have charted an entirely different course for the country. Will Nigeria have been any better for it?