The Central Bank of Nigeria, CBN, warned Wednesday that if the present autonomy being enjoyed by it was removed, the nation’s economy stands the risk of collapsing.
The country’s apex bank also urged the Senate to jettison the move if the nation’s economy must grow and for the realization of the set target of becoming one of the top largest economies of the world in the year 2020, adding that the CBN will be incapacitated once there was no longer the existing autonomy.
Answering questions from the Senate Committee on Banking, Insurance and other Financial Institutions when she appeared for screening for her second tenure in office, the CBN Deputy Governor on Economic Policy, Dr. Sarah Omotunde Alade told the Senators that world over, the autonomy of the Apex Bank was always recognized, adding, ‘’once the autonomy of the CBN is tampered with, then it becomes incapacitated.
It becomes easy for government to then wake up and ask the bank to print more money to meet certain expenditure and the economy collapsed.’’
Meanwhile, the Chairman Senate Committee on Banking, Insurance and other Financial Institutions, Senator Ayo Ademola Adeseun, ACN, Oyo Central has warned that if very drastic action was not taken on the nation’s economy and the present challenges, the next two years will be bad for the country, just as he promised that the National Assembly will continue to support the Central Bank in its move to drive the economy of the country.
Speaking further, the CBN deputy Governor, Mrs Alade while answering question on the $6.9 billion external borrowing being sought by the Federal Government, said ‘’we don’t want the debt to be too much because of the capacity to service it. It is not the loan but what it is used for.
‘’As long as the government is sure that the loan will be used to create employment and pay itself. When we take a loan, the burden should not come back to the government. The quantum of the loan is also an issue’’.
On Mortgage in Nigeria, the Deputy Governor disclosed that the apex bank has been working with relevant institutions especially in the area of mortgage as that will help generate employment as well as address the much needed housing for all.
According to her, the failure of any bank should not be blamed on consolidation because the exercise as carried out by the CBN has yielded results especially as it succeeded in placing the banks in position that will make them withstand financial crisis caused by the global meltdown, adding that if there was no consolidation, there wouldn’t have been any bank existing in Nigeria today especially after the global financial crisis.
According to Alade, ‘’the reason they had problem was because they channeled their money into capital market instead of productive sector.’’
The CBN Deputy Governor who noted that Omotunde with past experience, there was the need for concerted effort so that monies lend by banks do not find their ways back to the capital market.
Besides Alade, the CBN has three other Deputy Governors and they are Dr. Moghalo Kingsley who is in charge of Financial Systems Stability; Tunde Lemo, Deputy Governor, Operations and Alhaji Suleiman Barau, Deputy Governor, Corporate Services.
It will be recalled that following a motion by Chairman, Senate Committee on Rules and Business, Senator Solomon Ita Enang, PDP Akwa Ibom North East, the Senate had moved to force the Central Bank of Nigeria, CBN to submit its budget to the National Assembly for scrutiny and approval through a bill that scaled the second reading.
According to the Senate, the Apex Bank cannot arrogate to itself powers it does not have especially where it must keep to itself its expenditure without recourse to the National Assembly for assessment and subsequent nod from the legislators for the bank to go ahead and spend.
The bill, also recalled was referred to the Senate Committee on Banking and Judiciary and if finally passed, it will ensure that given statutory functions and powers conferred on CBN by Acts of the National Assembly or institutions created by laws, the funding of such Agencies were done according to the enabling laws by the Central Bank of Nigeria especially as it relates with the activities of the Asset Management Corporation of Nigeria, AMCON.