From Kenneth Udeh from Abuja
Nominees for membership of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) were, yesterday, grilled by the Senate Committee on Banking, Insurance and other financial institutions chaired by Tokunbo Abiru.
To ascertain their level of competence to man their positions, the lawmakers cross-examined the nominees on the various economic crises bedeviling the country, particularly food crisis and inflation.
President Bola Tinubu had, last week, forwarded to the Senate for confirmation, names of nominees into the MPC of the CBN.
The nominees, who passed through the senate committee’s grilling 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’s meeting slated for Monday next week, the Senate through its committee on banking, insurance and other financial institutions, grilled six out of the nominees with questions on required urgent solutions to forex volatility and food crisis.
First to face the committee was Alhaji Yuguda, who informed the committee that his nomination would give SEC the needed voice in monetary policy.
While assuring that there would be no conflict between his current position and the board membership, Yuguda lamented that the value of the Naira was not real, having lost its intrinsic value, but that the MPC, when inaugurated, would join other stakeholders to get it stabilised.
Yuguda suggested the protection of the nation’s foreign reserves.
“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 will not lose its value. Price stability, keeping an adequate rate of external assets. You need to know how much Naira supply will support economic activity. 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’s assets, one of the most important is foreign exchange reserves.”
In his own submission, the nominee from Lagos State, Dr. Akinkunmi said the way out now is to target the exchange rate and not inflation as being done without much result.
He objected to the flotation of the Naira. “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 the CBN, but for the entire country.
“Production and distribution of food commodities across the country will help to reduce the food inflation, while aggressive target of exchange rate will help to stabilise the Naira with required increase in productivity.”
Professor Sagagi 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. Odinkemelu said productivity is the key for arresting the volatility of Naira and food inflation.
Other nominees grilled were Professor Sagagi from Kano State, Bamidele Amoo from Kwara State and Alloysius Uche Ordu, who worked with the World Bank and the Africa Development Bank for 30 years at different times.
Chairman of the Committee, Abiru told the nominees that their screening was done ahead of the MPC’s meeting slated for Monday next week by the CBN.
He said what Nigerians expected to come after the meeting were solutions to the rising inflation rate, worsening Naira volatility in the Forex market, and rejuvenation of the economy generally.