A Plot to Kill Nigeria’s Economy

Lagos, Nigeria
Ikoyi Bay, Lagos, Nigeria

The National Assembly may be crossing the Rubicon by amending the Central Bank of Nigeria Act 2007. But if the views of other stakeholders truly matter to the legislature, it should retrace its steps immediately.

Enough warnings have been given by informed stakeholders like former CBN governor Prof. Chukwuma Soludo, current officials of the bank and the IMF. All are agreed that tampering with the CBN’s autonomy will pose a threat to the nation’s economy.

The lawmakers have denied the charge that they intend to tinker with the apex bank’s autonomy. But who would believe them when the bill seeks to dethrone the CBN governor from the chairmanship of its board and compel the bank to submit its annual budget to the legislature for scrutiny and approval? Clearly, the lawmakers are getting back at CBN governor Sanusi Lamido Sanusi who revealed, in 2010, that the legislators consumed 25 per cent of the federal government’s capital budget. In the process of extracting revenge, however, they may be destroying the nation and its economy.

A CBN without autonomy will be at the mercy of Nigerian politicians whose preoccupation is advancing the interests of their godfathers or their constituencies. It is known, for instance, that corrupt legislators influence budget figures to accommodate their business interests – it is one reason the ministries and agencies of government cannot deliver on their mandates. If the Central Bank is treated likewise, the financial sector would be doomed! Besides, given the fast pace at which economies across the globe respond to trends, a central bank that needs the approval of the legislature will be grounded by bureaucratic bottlenecks. To illustrate, the stress test that Nigerian banks were subjected to by the Sanusi-led CBN (which led to the apex bank’s intervention in some weak banks) could not have yielded results in such a short time. Powerful bank wreckers could have influenced the CBN through their representatives in the National Assembly. Also, the banking consolidation carried out by the CBN under Prof. Soludo would have died on arrival at the National Assembly in the form of a bill. Lawmakers from a certain region would have smelled a rat, just as those from another region now view non-interest banking as a plan to Islamise Nigeria. An independent CBN has saved the nation a lot of trouble.

No agency of government enjoys absolute freedom. Even the CBN has not been operating without supervision. But an overbearing control of the apex bank, especially by politicians, is capable of derailing it from its core functions. Possibly, the Nigerian economy has not collapsed all these years because of the monetary policies of the CBN. In these unusual times characterised by a global economic recession and a national economy that has been struggling for survival for years, the worst thing that can happen to the nation’s economy is to let politicians stampede or railroad the CBN into the murky waters of Nigerian politics.