A Twitter thread about the Central Bank of Nigeria (CBN) and its fiscal policies took an interesting turn yesterday when the apex bank was accused of establishing a poultry farm. The CBN quickly denied the accusation, by the way.
It all started when Igho Alonge, a financial expert, tweeted a quote from American economist, Ben Bernanke. The quote simply stated that “monetary policy is not a panacea”, and Alonge captioned it with “if only Meffy knew”. This implied that Emefiele loves implementing his monetary policies no matter what the outcome.
Alonge’s tweet elicited reactions, including one from popular Channels TV’s business presenter, Boason Omofaye who, interestingly, was defensive of the CBN.
He does. But what other options did he have when fiscal policy was largely comatose?
— Boason Omofaye (@BBoason) January 16, 2020
Another person whose comment caught our attention is Dayo Akinola, a Senior Financial & Risk Management Consultant. Akinola called out the CBN for doing the most to support its monetary policies, even when it is obvious that said policies are not working. For instance, he accused the apex bank of establishing poultry and taking over the National Art Theatre. He then stated that these moves are tantamount to the apex bank losing focus of its core functions.
This regime of @cenbank even though has called out the fiscal arm to do the needful, the @cenbank appears to be acting ultravires in some of its actions such as establishment of poultry, taking over National Art Theatre, etc which make it look as losing focus of its core mandate.
— DAYO AKINOLA, FRM, PRM (@akinolaij) January 16, 2020
Let’s break it down: The CBN has, over the years, come up with several policies aimed at conserving foreign exchange and protecting the naira from devaluation. In 2018 for instance, the apex bank spent $36 billion defending the naira as Nairametrics reported.
[READ MORE: CBN may announce new recapitalisation plan soon)
Forex restrictions on the importation of certain items, as well as restrictions on individuals, banks, and fintechs from purchasing treasury bills and OMO, are examples of such CBN policies.
Poultry products such as chicken and turkey are among the items the CBN restricted importers from being able to bring into the country using the official forex windows. Recent closure of Nigeria’s land borders has further made the illegal smuggling of these items very difficult. The government maintained that these policies are aimed at encouraging local production of these items, thereby diversifying the economy.
In view of the foregoing, it is possible that the CBN allegedly established the poultry farm in a bid to boost local production of chicken and turkey.
But the CBN has denied this: Issuing an immediate response, the CBN stressed that it did not establish any poultry farm, even as it called Akinola’s claim “totally false”. The CBN also clarified its involvement with the National Art Theatre, saying that it is a joint effort with banks with the aim of creating jobs.
This claim is totally false. CBN has not established any poultry. The national theatre project is a joint effort with bankers to promote creative industry and IT software development in the country. Is there any wrong in financing the resuscitation of that place to create jobs?
— Central Bank of Nigeria (@cenbank) January 16, 2020
