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?
any other constitutional oversights to address issue of abuse by CBN governor….absolute power corrupts absolutely…….Finance Minister is been blamed for the economic crises with a derisive tag of being a polytechnic graduate in charge of the economy…
I think it’s nothing,Kemi is creating problem for herself she is over-working herself for nothing,the governor meets with president Buhari as news report almost every Friday, to brief the president on monetary issues.independent or not,godwin was under pressure from the office of the vice-president did cut bank interest by 1 %,and inflation did increases,and they restored the status quo.
The economic team of the vicepresident ask the governor to bring forex rates vs the naira down,and he did comply (,after he ask for time),and the naira did appreciates…THE CENTRAL BANK OF NIGERIA DID STARTED TO LOSES MONETARY CONTROL AFTER THE START OF THE SAP,TO CONTROL INFLATION THEY DELEGULATE BANK INTEREST.
Sanusi was effectively fired byJohnathan for putting Nigeria into disrepute in the international community,the same power godwin have is the same power sanusi,why not give godwin al ong rope to hang himself,just like sanusi.let him make a fatal mistake,do not forget godwin have been smeared,insulted and he is taking like a man,being a public figure or servant is not easy.
The minister should read the comments made about her by young Nigeria on her plan on reducing the powers of the cbn(.i think it’s the turn of the ministry of finance to take abuses and insult for the greater and aspiraton of Nigeria.it maybe not be easy to reactifies sap,but we are in democracy,if this gvt move fast,this gvt wil collapse,w hich is to cut annual budget by 40 % to 60 % or increase taxes rate on vat,the naton will deflates as the money supply is subdued,,the cbn will cut bank interest into the single digit.)
Or the govt wll fills mrr committee with external voter.to get our way,or the govt will explode the possibility of have a minister in charge of the supply of money.putting the cbn,money market,nse and the capital market and regulation under political control.if you reduces the powers of the cbn now,without putting something to replaces ths reduction,,then you tells Abuja,we have problem ow,which we do not have before
Any attempt by Madam Finance Minister to subject the CBN to take directives from the Min. Of Finance should be resisted. Why is it during her tenure that we now have a “disconnect” between Gov. Emefiele’s office and her own office?
I suggest they should repair the “disconnect” and chart a promising course for our economy. Blame game won’t get us out of this mess.
A genuine review of what actually led to the honourable Minister of finance to request that the Central Bank Governor should report directly to her office is very necessary. The request should not be kept under carpet. There is no spoke without fire. My humble advice is for the President to look into the validity of what led to the Minister’s claim. We must not have the impression that, over the years, the Central bank Governor has been enjoying this latitude of autonomy and power without any challenge from both the Ministry of Finance, the legislative Assembly and other government agencies need review if the economy is in trouble and the monetary system is in jeopardy as is the case presently! I am not saying that the Governor is incompetent, but my view of the situation is that something is wrong somewhere that needs rectification. It will sound laudable if both the Minister and the Governor should work together in the interest of the nation by finding a lasting solution to the monetary system of the country. From my own personal analysis, I see no reason why a dollar should exchange for N500.00! There is no justification for such a gap! I uphold my belief that something went wrong politically through international manipulation and support from Nigerian politicians which the Central Bank should evaluate and make adequate recommendation to the President. If action such as this has been adequately addressed by the Central Bank, the Minster of Finance would not have made such an open outcry! Let the two powerful financial gurus work together by mapping out reasonable strategies that will enhance the monetary system in the country. The outright condemnation of the Minister’s outcry to me,is unnecessary and uncalled for. Let both sides come together and workout a permanent solution to the monetary system in the country. Conclusively, the politicians, order than the President, should hand off from the activities of the Central Bank of Nigeria. The Central Bank should retain it autonomy by all means!