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Adeosun wants National Assembly to cut CBN governor’s powers

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National Assembly

• Experts warn move will cause undue political interference
• Senate invites Emefiele over intervention programmes
• Minister says N6.8b stolen pension funds recovered
• Explains how money in TSA will be spent

The Minister of Finance, Mrs. Kemi Adeosun, yesterday asked for the reduction of the powers of the governor of the Central Bank of Nigeria (CBN). She blamed the extensive powers of the governors for the disconnect between Federal Government’s monetary and fiscal policies.She pleaded with the National Assembly that conferred the powers on the CBN boss, through a legal instrument, to slash them to pave the way for checks and balances.

If this becomes the case, the reaction time of the CBN to monetary upheavals will be greatly impaired as it is expected to act through a supervising agency.In fact, financial experts disagree, saying any such move will result in undue political interference in monetary policies, which will not augur well for the economy.Adeosun made the call yesterday while receiving members of the House of Representatives Tactical Committee on Recession led by Bode Ayorinde.

She said it amounted to what she described as excesses on the part of the apex bank’s governor to decide and act on financial matters without recourse to the minister of finance, who is constitutionally required to supervise financial policies, programmes and activities of the Federal Government.

“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. So we are back to the legislature to help us correct this problem of too much power. As a result, there are no checks and balances,” she said.

Under the administration of former President Goodluck Jonathan, the then CBN governor ordered the sacking and trial of bank chiefs and introduced monetary policies to regulate certain activities in the financial sector.

But none of the CBN governors – including the incumbent, Godwin Emefiele, and former ones, Sanusi Lamido Sanusi, and Charles Soludo, picked their calls or responded to text messages from The Guardian to them. Soludo, whom Adeosun identified as the chief protagonist of the current impasse, in a text message response, merely said: “Sorry, I am abroad and can only be reached via text please.”

But industry analysts like the Director-General, West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, said such an idea should be thrown out immediately, as it was outdated and out of sync with modern global trends.
 
“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.

Erstwhile banker and financial expert, Fola Adeola, reinforcing the CBN’s autonomy as a global practice, said the relationship between the ministry and CBN should be the coordination of monetary and fiscal policies.
 
“While I do not know exactly what she said and meant, but if the move is to reduce CBN’s powers, it may be tantamount to an infringement on its autonomy. On the other, if the matters in question are anything other than monetary policy issues, she may have a case to make,” he said.

The Deputy Managing Director of financial services advisory firm, Afrinvest Limited, Victor Ndukauba, is more concerned about how the adverse impact it would have on the larger economy by subjecting the CBN to the ministry’s supervision.

He said: “Ideally, the Central Bank should have only one function and that is monetary, controlling inflation. To say that the governor and 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.”

In view of the challenges the principal parties may face in achieving set goals under the current economic crisis, Udukauba called for a synergy between the two, in order to realise common goals of stemming galloping inflation, cutting high unemployment rate and buoying economic activities.

Meanwhile, regarding the status of the sum accumulated from the implementation of the Treasury Single Account (TSA), Adeosun dismissed claims that the N5.244 trillion said to have been accumulated so far has either been appropriated or misappropriated.

“The position as regards the funds in the TSA is that we are thinking of using the balance in the account to back two initiatives. One is for the Development Bank of Nigeria that is coming up, while the other will be for the Bank of Agriculture, for lending to SMEs and farmers, respectively,” she explained.

The minister, who reeled out efforts of the administration in recovering funds through the ongoing workers’ verification, said the government had so far recovered about N6.8 billion pension funds allegedly stolen by certain officials.

She noted that corruption had been the bane of economic growth in the country, assuring that with the right policies in place, along with emphasis on capital projects, the country would quickly get out of recession.

Earlier, Ayorinde, who led the lawmakers, had solicited the cooperation of the Ministry in finding ways of boosting the economy. He said a public hearing that would deal with the management of recession was being planned for stakeholders.

The lawmaker urged the government to provide reliefs and incentives to manufacturers to enhance their activities and help resuscitate dying companies.As if taking up the task thrown at it by the finance minister, the Senate has invited the CBN Governor Godwin Emefiele, to explain the apex bank’s Intervention Funding Programmes to qualified Nigerian companies and exporters.

The upper legislative chamber also urged the bank to consider implementing expeditiously, the approvals and disbursement of intervention facilities to those companies in the real sector that merit such facilities.

The resolution followed a motion by Mao Ohuabunwa (PDP, Abia North), who maintained that Nigeria’s drive to haul the economy out of recession, will fail if qualified companies do not access the CBN facilities.

To this end, the legislative body invited the CBN governor to address it on the progress made so far through the use of its various intervention faculty programmes, including the list of beneficiary companies, factories and exporters .


In this article:
CBNKemi Adeosun
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15 Comments
  • Ujay

    I think this minister has interpersonal relationship problems. You don’t need more powers to work with people in your field. You only need to know how to talk to people nicely. Soludo did it for a purpose and it worked perfectly well. Ask Okonjo-Iwuala how she worked with it and it worked well too.I still remember that Sanusi as central bank governor,Okonjo-iwuala and Diezieni Maduke used to call press conference together. Nobody complained about any power problems.Government is a continuum. Swallow your pride and your solution is just a phone call away.And save the country a lot too.

  • benedict chindi

    I think I need some of what Kemi Adeosun is smoking. Its not possible for a finance or economics expert in 2017 to say what I think she is saying.

    Nigeria joined the rest of the civilized world in the first term of the Obasanjo government, with the institution of an independent CBN, divorced from political interference, and she wants to take us back? She can’t be serious.

    The history of bank failures between the 1950s and to the late 90s, the inability of CBN governors to tackle the cause of said failures and the actions taken under Soludo and Sanusi to prevent systemic risk in the banking sector – i.e bank consolidation and enhanced risk management rules across board, show why we should never go back to the past.

    Putting Monetary policy under the control of a finance minister, subject to political interference, under whatever guise and to whatever degree is dangerous for a maturing or mature economy. The CBN sets monetary policy, while the executive through the finance and budget and planning minister/ministers set fiscal policy; in nearly all cases in coordination with the Central Bank.

    Someone should please remove this woman before she does even more harm than she already has!!!

    • FuzzyLogic

      She is clueless. What do you expect from a Finance Minister who cannot even define recession. There was a reason why all these powers were shifted to the CBN away from irresponsible politicians in the Finance ministry. She wants the ability to print money folks. That is where all this is going.

  • Busanic

    What is she smoking? Just because you’re finance minister now, you’re giving our very ignorant legislators a bad idea. No, the CBN’s independence is a good thing, it is the autocratic nature of decision making where the governor & civil servants (with tendency to be sycophantic) and the fact that it is not the independent bankers committee gets to decide key policy thrusts that is hobbling a sensible decision of that body.
    But even more so, the levity with which both previous Presidents and Senates took the appointment process. Only economists — true and tried, and better with real world management experience should man that position. And they should be VERY independent. Politicians are the worst guardians of monetary policy. God knows Emefiele is bad, but imagine Mamman Daura in charge! Choi.

  • Heavenlytruthforyou

    JESUS LOVES YOU. GIVE HIM YOUR HEART TODAY AND LET HIM BE YOUR SAVOIR AND GOVERNOR. WORSHIP WITH US THIS SUNDAY AT ANY DEEPER LIFE BIBLE CHURCH NEAREST TO YOU

  • Ayo Faleti

    Mrs Minister, your duty is to look into how you can structure fiscal spend to boost productivity and GDP. Let the CBN Governor manage any required monetary interventions independently. The two of you have to work together for the good of the economy and welfare of Nigerians. This your proposed solution is no solution at all. You are looking to solve a problem by creating an even bigger problem. Learn to work in good cooperation with other power centres of the economy.

    • FuzzyLogic

      Good and unbiased analysis. You nailed it.

  • Full blooded Nigerian

    I am glad the national assembly is looking at the beneficiaries of the different intervention funds set up by the CBN. The tentacle should be extended to BOI.

    Ensuring transparency in the disbursement of funds would ensure that only indigenuous companies benefit from this all important policy.

    • Dimeji

      This the NASS can remove or at least question

  • jellybelly

    …out of sync with modern global trends.

    But that is exactly why I live in Nigeria.

  • FuzzyLogic

    She is trying to blame her incompetence on the powers of the CBN governor. Remember folks that these powers have been there for years and other successful Finance ministers were able to do their jobs in the face of it. She is clueless and clueless people always see more powers as the only panacea for their incompetence.

  • AZZO

    You can imagine that little brat who is just a square peg in a round whole. If you read in the UK and obtained all your qualifications and maybe experiences both in the UK, Ogun state and now at the Nigeria finance ministry we should not have been in this recession that we currently are right now if you had put these to good use. If we choose to probe further into your nomination as finance minister I bet you 100% there will be very strong case of nepotism (and I am sure you know what I mean). Let us not say we will not find same with the nominations of the central bank governors but the point being that you simply do not compare in experience and qualifications to the lot of them. I am yet to see a single initiative from your office since appointment to show how you have improved the financial lot of the country save for the disbursing of funds to state governments on the orders of your principal. You apparently do not appreciate the policies and workings of the central bank in Nigeria ( and that being the case, how can you appreciate global standards set for central banks with their functioning as bankers bank) even as a chartered accountant and finance minister. I am honestly not sure what it is you intend to achieve by approaching the house to limit the powers of the CBN governor if not for mischief. I did not read your correlation between the current economic crisis to too much power vested in the CBN governor? Perhaps that needs explaining properly. Is not, and have always been the case that the executive arm of governments interferes consistently with central bank initiatives on monetary matters in all administrations in Nigeria? I think, in the best interest of team work with productive financial national dividends in the land you had better be seeking ways of improving the economy and if you think you have exhausted and lost all options, kindly, quietly and peacefully tender your resignation rather than go about making enemies. Remember, what goes around comes around. Ask your predeccesors.

  • ade

    I respect
    all views and comments about the Finance ministers statement that: “ Central
    Bank Powers be reduced.” But I differ
    from those views and agree with her.
    When the naira started losing value and putting Nigerians into serious
    economic hardship, several of us wanted Emefiele the CBN governor removed!
    The reason is that, the naira should not be allowed to lose so much
    value within a short time, in an import dependent economy like Nigeria, where
    there are still no credible and available substitutes for what we import to
    consume, that somewhat depends on the dollar.
    Emefiele and the CBN kept on watching, doing nothing, as Nigerians
    suffered and many felt the CBNs powers be reduced and maybe, a change of the
    CBN governor. Now, it appears Mrs
    Adeosun is echoing, or has realized that there is too much power, that is not
    used, or wrongly used by the CBN in monetary policies guiding the nation! Where
    did the idea of the CBN releasing more dollars to the economy recently that has
    made the Naira appreciate come from, and the dollar is still overvalued up till
    now! It is a demand and supply basic
    economics idea among other factors that influence the power of a currency. Adeosun is doing a good job and should be
    left in that position and given more autonomy and more powers to guide the
    nation as she is well exposed and trained, and knows what goes on in other
    developed countries like the UK where she trained, and monetary policies that
    can help Nigeria! Recently, she suggested that BVN numbers be extended to mircofinance
    banks which is a good idea as to allow more integrity in private accounts and
    to have a form of credible way of tracing people in the banking system allowing
    the grassroots to access more loans to spend in the economy which would help
    alleviate suffering and help Nigeria out of recession. When America was in
    recession, the government, through their finance ministry, stepped in, and bought
    old cars from the people and gave them money to buy new ones in the “Cash for
    Clunkers program”, which revived the huge almost dead American auto industries, by more
    people buying cars, thereby employing more people in those industries. One major policy that banks need to have is
    to key into Credit Reporting Bureas (CRBs) as it exists in the western world
    where Adeosun trained and she knows so well.
    Money is usually loaned to people with proven credit worthiness and
    trustworthiness. CRBs, track, through
    BVNs and Social security numbers and other personal human identifiers, who owns
    an account, who has a high credit rating
    and can attract bank loans at low interest rates. This idea curbs corruption and keeps the
    economy vibrant and strong as more people can access loans from their banks,
    because they are traceable. I believe
    the powers of the CBN should be reduced and more powers given to the Finance
    ministry. That lady knows what she is saying and doing. Please allow her. By
    Adetijani ahmadu Okafor alias”TJ”.

  • Dimeji

    At this point, I have to doubt whatever qualifications or experience this woman has. What usually comes out from her mouth does not correlate at all. She seems like someone who got into state and federal finance ministry not by the works of her hands, but by nepotism.
    How can you ask for a slash of the CBN’s powers?
    This gives me shivers, if this woman has more power than she currently does, she will send us down to depression!
    What I observe is someone with absolutely no idea of what to do or what the job entails, seeing that the only thing moving is the CBN, she wants some credit.

    • benedict chindi

      My brother Nigeria can do better. She has clearly been promoted beyond her competence; and thats my quarrel with d APC govt. There was too much focus on settling d different power centres within d party with appointments and not enough emphasis on competence.

      We have many far better qualified people than ds woman. Infact if they stll wanted their flawed political route, former commissioner in Lagos (Wale Edun) is 100 times better qualified.

      Poor Nigerians will just have to wait and hope for competent change.

  • Codes007

    Peter’s principle extraordinaire.