Stakeholders in the financial sector, including a former Minister of Finance, Mr. Adamu Ciroma, and an ex-Central Bank of Nigeria Governor, Chief Joseph Sanusi, on Monday, opposed the bid by the House of Representatives to tamper with the CBN autonomy.
They cautioned the House against altering the globally accepted trend, which encourages an autonomous and financially-independent apex bank.
There is a bill before the House, which seeks to amend the CBN Act 2007 by transferring the power of the board of the bank to approve its budget to the National Assembly. The bill also proposes to cut the membership of the board from 12 to seven and to appoint another person, other than the CBN governor, as the chairman of the board.
Ciroma and Sanusi spoke at a public hearing organised in Abuja by the Joint House Committee on Banking/Currency and Justice to amend the CBN Act.
Ciroma, a former CBN governor, wondered what aim the proposals would achieve. He argued that to whittle down the power of the CBN governor or exclude the deputy governors from the decisions of the board was “out of line with international best practices.”
Ciroma said, “The CBN board has always been made up of executive members of the bank and private sector persons who have distinguished themselves.
“There is a great danger in excluding the governor and the knowledgeable people in the economy and banking system from the CBN.”
On his part, Sanusi told the committee that the proposals were strange to him, adding that he was at a loss over what the House aimed to achieve.
Sanusi said, “We are not moving in the right path because in all countries of the world, the CBN governor heads the board.
“The only exceptions will be inconsequential CBNs. To be different has very serious implications for inflation. “It means we have a CBN that no longer has control.”
Sanusi observed that the proposed amendments must have come out of some misunderstanding between the current CBN governor, Mr. Lamido Sanusi, and the National Assembly. He urged both parties to make efforts to bridge any communication gap between them.
CBN Deputy Governor (Banking Operations), Mr. Tunde Lemo, also kicked against the amendments on the grounds that a CBN without autonomy was as good as no CBN.
He explained that due to the impact of the bank’s policies on the economy, it could not afford to subject its decisions to external influences such as the National Assembly.
“The CBN Act, 2007, works effectively as it is now and requires no amendments,” he said.
According to Lemo, the aim of the apex bank is not to make policies that will achieve immediate political aims.
“The CBN cannot afford to wait for bureaucratic approvals before acting fast in taking decisions,” he argued.
“If the CBN had waited for the approval of the National Assembly before doing what it did (banks bailout), maybe by now there would have been no banking sector in this country,” he added.
Apart from leading to higher inflation, he claimed that a CBN without autonomy would be unable to perform its lender of last resort function, among others.
Other stakeholders that opposed the proposed amendments included the Nigerian Labour Congress, the Institute of Chartered Accountants of Nigeria, the Nigeria Deposit Insurance Corporation of Nigeria, Chartered Institute of Bankers of Nigeria, First Bank Plc, Zenith Bank and Ecobank.
However, the Chairman of the committee, Mr. Jones Onyereri, told the session that the House had no motives other than to strengthen the CBN and make its operations more transparent and open .
The Minority Leader of the House, Mr. Femi Gbajabiamila, argued that if the President of the country could not spend “a penny without the approval of the National Assembly,” he did not see why the CBN should not be accountable to Nigerians.