Experts differ on reduction of CBN governor’s powers
The last appears not to have been heard on the outburst of the Finance Minister, Kemi Adeosun, demanding a cut in the powers of the Governor of the Central Bank of Nigeria (CBN), which she declared as “too much”, as experts’ views vary.
Also, current and past CBN governors are yet to openly comment on it. While the incumbent, Godwin Emefiele maintained his silence, former governors, Sanusi Lamido Sanusi, now the Emir of Kano, sent a “no comments” text message response, and Prof. Chukwuma Soludo, said he would send an e-mail response.
However, financial experts, who spoke with The Guardian are divided on the intent of Adeosun’s request. While the former Economic Adviser to President Olusegun Obasanjo, Dr. Magnus Kpakol, warned against any attempts to dilute the CBN powers, a faculty member at the Pan Atlantic University, Dr Austin Nweze, argued that rather than asking for cuts, the minister should have asked for power strengthening for the CBN.
On the other hand, his counterpart in the Finance Department, University of Lagos, Dr. Olalekan Obademi, believes the minister’s request is in order, as the precedents set by previous CBN governors, particularly in donation of public fund unilaterally, and opaque budget details, call for such request.
Specifically, Kpakol noted that given emerging economies’ challenges, apex banks now engage in development or intervention programmes to help the economy, which cannot be done by government due to fiscal and political concerns, as it may not be successful.
“There is nothing that said both fiscal and monetary authorities must agree all the times, but they must be harmonised by policy reaction for the overall good of the economy, hence the minister and the governor should rather be in regular interactions to grow their understandings,” he argued.
Nweze, noting that the request is headed in the wrong direction, said the minister may not fully appreciate the role of the CBN in the economy and the implication of such a request on the confidence of international investors that the country is frantically looking for.
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