From Kenneth Udeh, Abuja
Nominees for membership of the Monetary Policy Committee ( MPC ) , of the Central Bank of Nigeria ( CBN) were on Wednesday subjected to a thorough drilling by the Senate Committee on Banking, Insurance and other Financial Institutions chaired by Senator Tokunbo Abiru.
To ascertain their level of competence to man their position the Lawmakers cross examined the nominees on the various economic crises bedevilling the country, particularly on food crisis and inflation.
President Bola Tinubu had last week ,forwarded to the Senate for confirmation , names of nominees into the Monetary Policy Committee ( MPC ) of the Central Bank of Nigeria ( CBN) .
The nominees who passed through the Senate committee’s drilling were; Director – General of Securities and Exchange Commission ( SEC) , Alhaji Lamido Yuguda; Dr Mustapha Akinkunmi (Lagos); Mrs Aku Odinkemelu(Imo) ; Professor Murtala Sagagi (Kano); Bamidele Amoo (Kwara) and Alloysius Uche Ordu .
In giving the request expeditious consideration and ahead of the MPC meeting slated for Monday next week, the Senate through its Committee on Banking , Insurance and other Financial Institutions, drilled six out of the nominees with questions on required urgent solutions to forex volatility and food crisis .
First to face the committee , was the Director – General of Securities and Exchange Commission ( SEC) , Alhaji Lamido Yuguda who informed the committee that his nomination into MPC, would give SEC the needed voice in monetary policy.
While assuring the senator’s that there’ll be no conflict between his current position and the board membership, Yuguda lamented that the value of the naira as it is today, is not real ,having lost its intrinsic value but that the MPC , when inaugurated on Monday , would join other stakeholders to get it stabilised.
Yuguda suggested the protection of the country’s foreign reserves;
“My appointment by the President is based on my personal capacity. I’m being appointed to monitor the MPC committee”
“The value of the naira is not real, the value of any currency is really the value of the goods and services that the currency can buy.
“We have created a lot of fiat money and we have to be very careful on how we manage it. I mean paper that has money that does not have any intrinsic value with it.
There are things we can do with our money that do not lose its value. Price stability, keeping an adequate rate of external assets. You need to know how much naira supply will the economic activity support. There is a link between supply and nominal gdp.
“If you don’t have much reserves your currency value is at risk so you must protect your reserves. If you freely print to do a variety of things then we can go into trouble like we are today.
You cannot lend to the government more than five percent of its previous revenues. What CBN must do is to go back . Key to this is the CBN assets, one of the most important is foreign exchange reserves.
In his own submission , the nominee from Lagos State , Dr Mustapha Akinkunmi, said the way out now is to target the Exchange rate and not Inflation as being done without much result.
Mustapha objected to the floatation of the naira; “Why I chose to target the foreign exchange is that we are trying to float the naira but unfortunately we can’t float the naira. If we have to manage the pound. I believe that we need to manage the naira forex, especially the dollar. If we work closely with BDC and Binnance, we can manage this.
” More proactive way of addressing the naira volatility problem at hand , is for the CBN to target the Exchange Rate itself and not Inflation .
” The Inflation the country is facing now , is largely that of food inflation , which is beyond CBN but for the entire country .
” Production and distribution of food commodities across the country , would help to reduce the Food Inflation , while aggressive target of Exchange rate , would help to stabilise the naira with required increase in productivity “, he said .
Professor Sagagi on his part faulted the closure of the Nation’s borders which he said has distorted the traditional trade flow between Nigeria and its surrounding nations.
“If the fiscal is not aligned the CBN cannot perform miracles. The productivity is low and our chances of getting money to offset our loans is even threatened.
“We have closed our borders, we have not allowed the traditional movement of foods around Africa. Many of us know what to do but the problem is doing it . I may not have any experience in banking but I have experience in policy making, Sagagi said.
In a similar submission , the nominee from Imo State , Mrs Aku Odinkemelu , said productivity is the key for arresting the volatility of naira and food inflation.
Other nominees , drilled at the session by the committee , were Professor Murtala Sagagi from Kano State , Bamidele Amoo from Kwara State and Alloysius Uche Ordu , who worked with the World Bank and Africa Development Bank for 30 years at different times.
In his closing remarks , the Chairman of the Committee , Senator Tokunbo Abiru ( APC Lagos East ) , told the nominees that their screening was done ahead of the MPC meeting slated Monday next week by CBN .
He said what Nigerians expect to come after the meeting are solutions to the rising inflation rate, worsening naira volatility in the FOREX market and rejuvenation of the economy generally.