From Uche Usim, Abuja and Chinwendu Obienyi
Against the backdrop of Nigeria’s upper legislative chamber’s plan to amend the CBN Act to check the excesses of its Governor, economic and finance experts yesterday, cautioned the Senate to tread cautiously to avoid eroding the independence of the apex bank and ultimately paralyse monetary policy administration and the economy in general.
Commenting on the indication by Senate President Godswill Akpabio, of a likely amendment of the extant CBN Act as part of strategies to curb the excesses of its CBN Governor, former Finance Commissioner, Imo State and professor of capital markets, Uche Uwaleke, told Daily Sun that the amendment of the Act, if it must be carried out, must be done to further strengthen the independence of the CBN and not to weaken it.
He said allowing politicians to have huge control over the operations of the banking industry regulator was dangerous and at variance with international standards.
He said: “The independence of CBN should be maintained in line with global best practices.
The idea of separating the CBN Governor from being the Chairman of the CBN Board is not right.
“It’s good the CBN Governor remains the board Chairman so decisions can be easily taken and avoid political interference in running the bank. “It won’t be in the interest of monetary policy and economy. It is important that the CBN Governor can take decisions without towing to the whims of the President. The CBN is a special organisation. However, some of CBN’s decisions and actions can be democratised by ensuring that MPC members are more of external members so that it won’t be the CBN Governor influencing the appointments of the members of MPC. That won’t serve CBN’s interest as an independent body. If they must amend the CBN Act, it must be to further strengthen not weaken it”, Uwaleke explained.
Also intervening on the issue, the Director, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the ongoing investigation into the activities of the CBN under the suspended Governor, Mr Godwin Emefiele, may have inspired the Senate to want to quickly tweak the CBN Act.
He, however, said that such an amendment must be done transparently and involve experts and other relevant stakeholders to ensure the right things are done.
He said: “The issue is that an investigation is ongoing involving the CBN and other financial institutions.
“Outcome will throw up lapses on corporate governance. If there is none, the CBN will continue to be abused. “There must be processes in place for checks and balances. The board comprises the CBN deputy governors who are subordinate to the CBN Governor who is also the board chairman.”
Where is the corporate governance?
“We’ve seen where CBN Governors donate money in billions, without appropriation and approval from the legislature. Is that right? It’s not about an individual. There must be transparency and accountability.
“However, the amendment must be done transparently so that those of us in the industry can be part of it and ensure CBN’s autonomy is not eroded and yet there’s corporate governance. Let’s avoid absolute powers” he explained.
In his remarks, David Adonri, Vice-President, Highcap Securities said the action of the Senate should be allowed to run and not discouraged.
“Let us not try to prevent what the Senate wants to do as we do not know whether it will strengthen the powers of the CBN as an independent monetary authority or it will impose more control on the CBN. “Personally, I think they need to amend that Act and clearly define the level of authority of the CBN Governor without removing the autonomy of CBN as a monetary authority.
“The powers of the governor need to be properly defined and might be under the control of the CBN board. This is to ensure that we do not experience the kind of punishment we had during the time of the suspended governor. He failed to carry stakeholders along during the Naira redesign policy and the policy was not well implemented. We have seen a lot of times where the CBN policies are inimical to the stability of the capital market because those policies were eked out and were not in sync with the capital market. Hence, the senate needs to amend the act so that critical stakeholders can be carried along”, he explained.