In what appears to be a well-choreographed script, the airwaves and the print media have lately been inundated with affirmations and endorsements of the absolute powers currently enjoyed by the Central Bank of Nigeria (CBN) under the provisions of the 2007 CBN Act.  The media reports were primarily culled from the recent presentations by various stakeholders at the hearings of the House of Representatives Joint Committee on Banking & Finance and Justice.  The summary of all the presentations, including those of the seemingly passionate pleas of two former CBN Governors was that it was inappropriate to tamper with the existing provisions in the 2007 Act.  

The appellants also maintained that the content of the present Act was in consonance with international best practice; an Elder Statesman who had earlier served as CBN Governor also cautioned that our CBN governor would lose respect amongst international peers if the Act is amended.  A Vice President of the NLC similarly challenged the Legislators for proposing to deprive the CBN of its independence, while the House cherished the constitutional guarantee of its own independence.  

The CBN on its side also maintained that the amendments would fuel inflation and also obstruct the bank’s ability to quickly respond to evolving market threats.

The apex bank also claimed that the CBN’s ability to deliver its core mandate of price stability (i.e. reduce inflation to 1 – 2% and create an enabling economic environment) will be compromised if the Act, as its currently stands, is amended in any way.

From the foregoing, the proposed amendments may seem purely self-serving.  Some critics have even suggested that the proposed amendment was a devious route to enthrone mediocrity and create opportunity for leakages in the management of the apex bank.  Other critics also insinuated that the proposed amendment to the Act was the Legislators’ payback for Sanusi’s impetuous revelations on the lavish appetite of members of the House.

Surprisingly, this writer’s brief presentation appeared to be the lone voice in the wilderness, which supported the proposed amendments. 
Consequently, it may be appropriate to actually evaluate the quality of each of the five amendments proposed by the House.  In reality, the amendment covers less than two pages and relates to just two sub-sections under Sections 6, 7, and 8 respectively, and also includes the introduction of a new Section, 48.  Incidentally, the existing 2007 CBN Act contains 90 pages and 54 Sections!

The proposed amendments relate to Board Composition, Budget preparation, Budget Approval, Salary and appointment of a Deputy in case of absence of the Governor.

The 2007 Act provides for 12 Board Members with the incumbent Governor as Chairman, while the other members of the Board consist of four Deputy Governors of CBN, Five Directors of CBN, Permanent Secretary of Ministry of Finance, and the federation’s Accountant General.  The preponderance of 10 CBN officers out of 12 board members clearly negates the principle of accountability and transparency as the aberrant judgment of an anti-people and bellicose Governor will effectively become board policy.  Ultimately, Nigerians will become the victims of the impact of such misjudgment.  

The anti-people positioning of CBN’s management in such national issues as the fuel subsidy imbroglio, and the poorly thought-out proposal for the introduction of the N5,000 note are all reminders of such misjudgments; the inexplicable and arbitrary Father Christmas largesse of the CBN Governor has also raised concern.  Fortunately, the National Assembly has belatedly recently woken up from its slumber while the CBN usurped the Legislative powers for approval of national debt accumulation; the erstwhile lacuna permitted the CBN and its associate agencies (Debt Management Office and AMCON) to rapidly accumulate over N8 trillion (about US$48 billion) debt for largely unsubstantiated purposes while the Legislators snoozed!!  In view of the N100bn annual sinking fund for debt repayment in the 2013 budget proposal, it may take over 60 years to repay these loans.

Incidentally, the Commander-in-Chief, President Jonathan, cannot spend a single kobo talk less of borrowing on behalf of Nigeria without prior approval of the Legislature.  It is bewildering therefore that the CBN Governor and its Board have such sweeping and unfettered powers as unelected Civil Servants under the existing 2007 Act!

Such absolute powers would corrupt even the most righteous human being and the House has consequently recommended that Section 6(2) of the Act be amended by providing that “the CBN Board shall consist of a chairman, who shall be either a former CBN governor or a former chairman or managing director of a bank.  The other members of the proposed new seven-man Board would consist of the (incumbent) CBN Governor, the Permanent Secretary of the Ministry  of Finance, the Accountant General of the Federation, the Permanent Secretary of National Planning Commission, a representative of the Federal Inland Revenue Service (not below the rank of a director) and a representative of the Nigerian Deposit Insurance Corporation (not below the rank of a Director).”  Contrary to speculation, there is no political appointee on the Board!

The second proposed amendment to the 2007 Act relates to Sections 6(3)a, which vests responsibility for Budget Preparation on the CBN and approval of same budget by a lopsided Board with 10 CBN staff out of the 12-man membership.  In view of the ambience of impunity in our political and economic space, it would be a miracle to expect such arrangement to be free from the pervasive magnitude of fraud in our public administration.  The proposed amendment consequently correctly deletes the existing provision for the CBN’s Board as the sole authority to approve the apex bank’s annual budget.  Some critics have observed that it is the fear of the revelation of the putrid mess in the system that has induced CBN’s orchestrated campaign for the retention of its absolute powers.  

The House amendment consequently introduces a new Section 48, which provides that “the Board shall prepare and submit to the National Assembly through the President not later than 30th September of each year, an estimate of its income and expenditure during the next succeeding year.”  This amendment would certainly be more transparent and would also demand greater accountability in the management of the apex bank.”

The fourth amendment pertains to the leadership of the Board in the event of absence of the governor.  Section 7(1) in the current 2007 Act stipulates that the CBN Governor would personally choose the candidate to act on his behalf in case of unavoidable absence.  The proposed amendment replaces the provision in Section 7(1) as follows:

“The Governor, or in his absence the most Senior Deputy Governor, shall be in charge of the day-to-day management of the Bank and shall be answerable to the Board for his acts and decisions.”

The Fifth and final amendment to the 2007 Act, relates to Section 8(3), which currently provides that salaries and allowances will be solely determined by the current 12-man Board with its its complement of 10 CBN’s Staff!  The current amendment, however, provides as follows:

“The salaries or allowances, including pension and other allowances payable to the governor and the deputy governor shall be as stipulated from time to time by the Revenue Mobilization, Allocation and Fiscal Commission, subject to the approval of the President.” 

Fellow Nigerians, please judge for yourselves who really is being clever by half?  It appears that the CBN is mischievously capitalising on the burden of credibility of members of the National Assembly.  In any event, we have endured CBN’s promises of the dividends of absolute autonomy since 2007; regrettably, the product of our forbearance is increasing debt accumulation and deepening poverty nationwide in spite of increasing revenue inflow!

Instructively, however, even the adoption of the proposed amendments may not bring succour to our blighted economy, if the reconstituted Board encourages the CBN to continue to maintain its monopoly on the foreign exchange market under the amended Act!