THE National Assembly has made a commendable start to the proposed amendment of the Central Bank of Nigeria (CBN) Act 2007, when recently the Senate Joint Committees on Banking and Judiciary, organised a one-day public hearing for the purpose.
The legislators had all along insisted that the intendment of the amendment was not to erode the independence of the Bank but rather, to enhance its effectiveness; they are therefore seeking inputs and insightful guidance from critical stake-holders to help shape an Act for CBN that will best promote the best interest of Nigeria. This transparent mode of interaction adopted by the Senate will no doubt ferret out the details necessary for amendment required of a robust legislation.
There are so many vexed issues in the present CBN Act tabled for amendment: provisions that tend to confer a absolute autonomy on the operation of the bank without due regard to the provisions of the constitution.
The Act is replete with several sections (for example: S.11 (2) (b) S.52) that oust the sanction powers of the court of Law in the operations; which should not be. The status quo which makes the CBN Governor the Chairman of the Board and the Deputy Governor as Board members, will yield way for the appointment of a chairman and the exclusion of CBN Deputy Governors and other directors from the Board. The CBN will have to submit its annual budget to the National Assembly as required by the extant provisions of the Nigerian Constitution.
Opponents to the amendments argue that any tinkering with the Act is an onslaught on the autonomy of the bank, that would compromise it monetary policy formulations. And for the bank to enjoy the co-operation International Monetary Fund (IMF), it must operate within the international financial system, maintaining the world best practices.
A former Minister of Finance, Mallam Adamu Ciroma; past top officials including Alhaji Hamza Otiti, and Prof. Green Nwankwo, urged the Senate to rescind its decision to amend the Act. On his part, the CBN Governor, Mallam Lamido Sanusi, said that subjecting the bank’s budget to scrutiny by the National Assembly would be used to score political points.
From a careful study of the arguments of the bank and of the National Assembly, we are convinced that both institutions have genuine concerns for Nigeria, but they differ on their approaches. Overall, it is the interest of Nigeria that is at stake here. We must emphasis here that for far too long, the Nigeria economy has frequently suffered many avoidable shocks, due to failures of institutions.
The recent take-over of some banks and the crash in the Capital Market are cases in point. Therefore, there is a compelling need for the strengthening of institutions that drive the economy. In this connection, the National Assembly must do the needful. It must dispassionately evaluate the pivotal functions of the CBN, and how the bank can be insulated from extraneous influences, to enable it deliver on it core mandates.
For guidance, the legislators must attempt to answer some pertinent questions. In what ways would an independent CBN serve Nigeria better? How would and autonomous CBN regulate its processes to avoid internal abuses that could provide worse shocks than the worst political interferences? How would CBN handle its auditors/examiners that award banks high marks in approving their accounts and within months the same banks become insolent.
Every economy has its peculiarity, caused by the ways of its people. Therefore the CBN should approach its business with transparent perspicacity, that leaves no doubt that it wants to faithfully serve the interest of Nigerians and not merely seeking autonomy for it own sake. The National Assembly should seize this momentous opportunity and not merely pander to the “best international practices”; its aspiration should be to make the best of the country’s membership of the international community, for the benefits of the Nigerian people.