CBN struggling to be Nigerian
Cultures in which individuals are not taught how to cooperate, compromise, and discipline themselves to practical communal tasks can make neither democratic politics nor market economic work. Michael Novak
CBN under the current leadership of Emefiele is struggling very hard to be a Nigerian in an institution that is not meant to obey domestic legislation when such legislation runs counter international norms as instituted by World Bank and IMF. However, initiating banking charges that make Nigerians loathe banking services in order to help government make revenue as insinuated by CBN on deposit charges and cashless banking policies, notwithstanding the proposed increase in VAT that remain detrimental to poor Nigerians, is leading to CBN deviating.
Unlike other CBN governors before Emefiele, he had remained helpful to the government as he responds always to save the government from total collapse as “bail out” had been surreptitiously implemented by him without making noise so as not to offend CBN’s major stakeholder – the world creditors backed by IMF and the World Bank. The unwritten law is that CBN must show concern for their ability to repatriate their profit or to allow credit flow into Nigeria by watching very well the behaviour of the national reserve.
The threshold of performance is only known by them and the CBN and Emefiele is struggling hard to prove that Nigeria’s sovereignty counts but it is not yielding result as even Nigeria’s National Assembly seem not to know, that its powers are to be marginally exercised when it comes to the CBN policies. When the governor is confirmed, he is wearing two caps – Nigeria and World Finance.
The immediate past president of France, François Hollande, was so much helpless about what financial regulations beyond his powers were turning him to that he felt recontesting for second term was useless unless he was tutored to be very much aware of what his opponent was up to; and according to him, that opponent is the financial institutions regulating, remotely, economic activities in France. To him, they are faceless. Macron, trying to obey them by raising fuel tax, and like Nigeria, Consumption Tax (VAT), while allowing the rich people enjoy tax relief on their wealth including inheritance tax, had to recant when the Gilets Jaunes – Yellow Vest Revolution challenged him for months, running.
Emefiele seems to be the one trying to incur the wraths of Nigerians by imposing charges on the banking public, claiming that he wants to help government raise revenue as against forcing government to cut on its expenses so that it would buoy its reserve and win the trust of creditors. The Finance Minister had said that Nigeria’s debts – domestic and international – are not the issue; that the issue is revenue collection as if the collection is to be on dead Nigerians.
Nigeria’s government’s bonds are attracting two digits yields on all fronts and it implies that creditors are not trusting the government enough even when the leading economies in the world are on almost zero interest rate which encourages more activities in their Stock Exchanges as Nigeria’s own go on losing daily. It was reported that the current European Union Apex Bank Governor had reduced interest rate to zero so as to give the outgoing IMF Boss – Lagard, who is to take over from him in November as the new boss, greater work to do in stabilizing European economy as she was also on his neck as the supranational financial sovereign, as the Boss of IMF.
In effect, there are issues our legislatures seem not to understand about the CBN that one gets baffled about their level of financial education. It is as if Emefiele is helping them fight their financial illiteracy as they carry about Ghana–must–go bags of money everywhere. Cashless policy should target government transactions including the legislature; and check out, mere seeing $20 notes on the President of USA, as breeze exposed them when he was boarding his aeroplane, people started questioning him for carrying money.
CBN could be rendered a pariah among its peers if it continues doing the job the government ought to do like the current imbroglio that had rendered the Central Bank of Iran and that of Venezuela useless in their face – off with USA; and of course majority of Nigerians will see rich Nigerians buy up the naira in circulation, pursuing foreign exchange, for their own selfish interest. It is happening currently in Venezuela, Zimbabwe; and even in Russia notwithstanding its powerful position in the world as it has been out of the G’s making the G’s to be G7 now as against G8.
Even when one is not an economist, the trends are that the CBN governor is working hard to be Nigerian by harping on domestic issues that ought to be the domain of the government while it makes sure that Nigeria enjoys the confidence of the world creditors so as to help build our dilapidating infrastructure which one hears that funding is hampering it as per the submission of the Works’ Minister.
All over the world, it is known that annual national budgets do not build enduring infrastructure, it is built by investors who trust the government to be a reliable one, in continuum, for at least 30 years when they could recoup effectively their investment which is mostly the savings of retirees put to effective use.
Now, Nigeria boasts of trillions in naira of pension funds and there is no transparency about the use of such funds to improve on any infrastructure that could make them feel safe at retirement periods; all we hear is that retirees are not paid and that people like Maina who embezzled their funds are still roaming the world as protégée of powerful people in government.
In effect, retirees fund or pension funds should be converted to foreign currency and placed as distinct reserve funds and allow CBN to oversee it for the benefit of Nigeria’s tomorrow, if CBN really cares.
Ariole, Professor of French and Francophone studies, wrote from University of Lagos.