The Central Bank of Nigeria fired back at the NESG following a Businessday report that accused the bank of seeking immunity for CBN Governor, Godwin Emefiele in the proposed Banking and Other Financial Institution (BOFIA) Bill.
In a press release published on the website of the central bank, it addressed wide-ranging claims made against it by the National Economic Summit Group (NESG) which purportedly leaked to Business Day, a newspaper in Nigeria. In the article published on Tuesday, the newspaper alleged “business leaders opposed bill to give CBN Governor immunity” according to section 51 of the proposed bill.
“Section 51 of the Bill which grants immunity from judicial intervention to the Federal Government, the CBN, or any officer of the Federal Government or the CBN from any action, claim or liability to any person in respect of anything done in the exercise of their duties under the Bill.”
What section 51 actually says
“neither the Federal Government nor the Bank nor any officer of the Federal Government or the Bank, shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution of, or in connection with the execution or intended execution of any power conferred upon that Government, the Bank or such officer, by or under this Bill or the CBN Act or any rules, regulations, guidelines or directives issued thereunder or pursuant to any other relevant laws,”
CBN fires back
The CBN retorted that the section claimed to be granting immunity to the Governor of the Central Bank already exists as Section 53 in the old Act long before Emefiele became Governor.
“On the revisions to the BOFIA Act, there are many reasons why we see a total ignorance or malicious intent on the part of the NESG. First, the provision they refer to as being currently conceived as part of the new BOFIA already exists as Section 53 in the old Act, which is now Section 51 in the amended Act passed by the National Assembly. The current bill has not proposed any changes to that section at all.”
The CBN also explained that the provisions in section 51 do not provide any immunity to the CBN Governor as it would for elected Governors of States of the Federation but rather it protects the apex bank and their officials against litigations brought forward against it for actions it may have taken in good faith.
“Second, contrary to their misleading anxiety and associated reportage, the provision of Section 51 does not purport to confer immunity on the Governor of the Central Bank of Nigeria like that which obtains for State Governors. Rather, this provision protects the Federal Government, the Central Bank of Nigeria and their respective officials against adverse claims for actions or omission in good faith exercise of powers under BOFIA and other specified statutes including the Central Bank of Nigeria Act and regulations made thereunder.”
In the Businessday report, it cited a quote from an unnamed CBN Governor who wondered why the bill would include such a provision alleging it was to provide immunity for the Governor.
“What would a governor of the central bank need this immunity for?”, asked a former governor of the apex bank who spoke to our reporter….you already have in BOFIA a section that requires anyone to first write the governor before he or she can sue the governor. The governor does not need the kind of immunity we are talking about and I do not think there is any sensible country in the world with a provision like this. What do we do if it happens that a governor contravenes the very law establishing the bank”?
It also quoted the NESG reporting that it “also kicked against granting immunity to the CBN and its officers from judicial review of acts undertaken in the exercise of their administrative duties.”
Who is on the right track
Reading between the lines, one does not need a lawyer to explain that the provision in the passed bill is not new and surely was not introduced by the current governor to protect himself from immunity. The provision has been in BOFIA (the existing law) and is also included in other laws setting up regulatory bodies such as the Securities and Exchange Commission (SEC), AMCON, NDIC, and even the CBN.
The provision basically protects regulatory bodies from being sued indiscriminately by parties to whom they may have carried out action against. For example, in the case of sacking the board of a failed bank, the directors may sue to get an injunction against the central bank curtailing its powers to take swift action where necessary.
It appears critics are now throwing the kitchen sink at the CBN Governor for actions they deem “unpopular” even if it means raising false alarms. Since 2015 when Nigeria’s economic crisis begun, Godwin Emefiele has come under severe criticisms in his handling of monetary policy and management of the exchange rate.
Thus, no matter his intent, critics view his actions with skepticism and caution suggesting a lack of trust between them and his leadership of the CBN. Despite a deluge of criticisms, he remains in favour of the current government after his second term was renewed. He is the first CBN Governor to serve two terms since Abdulkadir Ahmed whose term ended after 10 years in September 1993.
Young female professionals in insurance are constrained by inadequate opportunities – Dive In
Young female professionals in the insurance sector are constrained by inadequate opportunities, a survey has revealed.
A survey has revealed that despite the ambition to attain a top-level career, young female professionals in the insurance sector are constrained by inadequate opportunities relative to gender bias and unequal pay.
The survey, which was conducted by Dive In team, also found that female professionals in the sector face limitations on their rise to leadership amid other challenges.
The survey, which was disclosed at the Dive In Nigeria Festival webinar on Thursday, further highlighted that females are willing and ready to take up more challenging roles within the sector and have to resort to professional bodies for support and guidance in their careers.
At the webinar themed ‘Promoting Inclusion & Diversify in the Nigerian Insurance Industry for a Quantum Leap, which was attended by Nairametrics, the immediate past Managing Director, African Alliance Insurance Plc, Funmi Omo, one of the top 100 women CEOs in Africa, explained that equal opportunities, equal pay, female empowerment, and commitment from leadership in firms are crucial to the development of the sector in Nigeria.
She said, “Women should be seen as the backbone of any economy, and as such, they need to be given more attention. From the insurance standpoint, we need to have a more structural and deliberate approach to thrive. Diversity is very good, it brings about balance. Leaders have to step up to make the insurance sector more welcoming and structured. They need to be flexible and avoid being rigid and also take advantage of the newness and freshness of the younger generation. Do not micromanage them, let them explore, allow them to breathe, and make their own mistakes so they can see a future in the industry.”
Some leading females in the industry also lent their voice to the younger female professionals in insurance & finance in a campaign titled “Letters to my younger self.”
They shared lessons that would help the younger generation develop a mindset and character required for success within the sector.
Other speakers included Adetola Adegbayi, Executive Director, General Insurance Business Division, Leadway Assurance Company Ltd, a Legal Practitioner with extensive experience in Legal Research, Corporate Legal Practice, Insurance, and Financial Services; Nike Anani, Co-Founder African Family Firms, a firm dedicated to assisting second-generation family members (“NextGens”) in identifying and implementing new opportunities, shortening the journey from identification to impact.
On steps being taken to promote diversity and inclusion in hiring strategies, MD, African Reinsurance Corporation, Dr. Corneille Karekezi said, “We are aware that women are not well represented in the workplace and as such at Africa Re Group, we make special provision for women inclusion in nomination for senior roles, provision for tribal diversity and inclusion to drive equality within the corporation.”
He stressed that the mandate for them at his firm is, integrating Africa, and to achieve this, it is important that diversity and inclusion are promoted.
“Communications and the intention to achieve equality helps us ensure diversity and inclusion,” he added.
About Dive In
Dive In is a global movement in the insurance sector to support the development of inclusive workplace cultures. Its mission is to enable people to achieve their potential by raising awareness of the business case and promoting positive action for diversity in all its forms.
CBN reduces MPR from 12.5% to 11.5%
The Governor of the CBN has announced the reduction of MPR from 12.5% to 11.5%.
The Monetary Policy Committee (MPC), of the Central Bank of Nigeria (CBN), has voted to reduce the Monetary Policy Rate (MPR), from 12.5% to 11.5%. This was disclosed by Governor, CBN, Godwin Emefiele, while reading the communique at the end of the MPC meeting on Tuesday.
The committee retained CRR at 27.5%, stating that the recent inflationary pressures is not driven by monetary policies, rather as a result of structural policies.
Highlights of the Committee’s decision
- Reduce the MPR by 100 basis points, from 12.5% to 11.5%
- Adjust asymmetric corridor, from +200/-500 to +100/-700 basis points around the MPR
- Retain CRR at 27.5%
- Retain liquidity ratio at 30%
Explore the Nairametrics Research Website for Economic and Financial Data
According to Emefiele, the Committee reviewed the choices before it, bearing in mind its primary mandate of price stability, and the need to support the recovery of output growth. Consequently, the Committee noted that the likely action aimed to address the rise in domestic prices would have been to tighten the stance of policy, as this will not only moderate the upward pressure on prices, but will also attract fresh capital into the economy, and improve the level of the external reserves.
The Committee however, noted that this decision may stifle the recovery of output growth, and drive the economy further into contraction.
On easing the stance of policy
The MPC was of the view that this action would provide cheaper credit to improve aggregate demand, stimulate production, reduce unemployment, and support the recovery of output growth.
In addition, the Committee noted the tendency of an asymmetric response to downward price adjustments by ‘Other Depository Corporations’, thus undermining the overall beneficial impact of a reduction, to the cost of capital.
After all considerations, members were of the opinion that the option to loose will complement the Bank’s commitment to sustain the trajectory of the economic recovery, and reduce the negative impact of COVID-19.
He also stated that, liquidity injections are expected to stimulate credit expansion to the critically impacted sectors of the economy, and offer impetus for output growth and economic recovery.
Based on the foregoing, the Committee decided to reduce the MPR by 100 basis points to 11.5% and adjust the asymmetric corridor to +100/-700 around the MPR.
MPC projects economic growth
Recall, that the Nigerian economy contracted by 6.1% (year-on-year) in the second quarter of the year, as a result of the disruptions caused by the COVID-19 pandemic. The MPC however, projects a positive growth in the last quarter or at least Q1 2021.
“With a persistent focus on activities meant to reverse the contraction, the MPC projects growth at positive levels in Q4 2020, or latest by Q1 2021, based on the anticipated positive results from the coordinated and sustained interventions by both the monetary and fiscal authorities.”
CBN grants Greenwich Trust Limited operational license for merchant banking
CBN has upscaled Greenwich Trust Limited to the status of a merchant bank.
The Central Bank of Nigeria (CBN) has upscaled Greenwich Trust Limited and granted it, operational license for merchant banking in the country.
According to an official statement released by the firm, the entity would be known as Greenwich Merchant Bank Limited. This license allows Greenwich Merchant Bank to upscale and offer such diverse services as corporate banking, investment banking, financial advisory services, securities dealing, treasury wealth and asset management, etc., making it possible to provide increased value to stakeholders beyond its previous scope.
Explore the Nairametrics Research Website for Economic and Financial Data
Recall that the minimum capital requirements for establishing a merchant bank according to Merchant Banking Licensing Regulations in 2010 are N15 billion
With the addition of Greenwich Merchant Bank, Nigeria now has six merchant banks. The others are; FBN Quest, Coronation Merchant Bank, DSH Merchant Bank, Nova Merchant Bank and Rand Merchant Bank.
About Greenwich Trust Limited
Greenwich Trust Limited is an investment banking firm duly registered with relevant authorities such as the Nigerian Securities and Exchange Commission (SEC). It is a diversified firm with subsidiaries such as Asset management, GTL Properties, GTL Securities Limited, Cedar Express Limited and Meyer Plc.