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Tag: Central Bank reforms

  • Tweaking The CBN Act, NASS Must Tread With Caution

    Tweaking The CBN Act, NASS Must Tread With Caution

    The ongoing effort by the National Assembly to tinker with the Central Bank of Nigeria’s Act, 2007, has been generating heated debate within the polity. The concern has been the rationality of the exercise.

    This effort is spearheaded by two distinguished Senators, Senators Steve Karimi and Darlington Nwokocha. The bills are – ‘A Bill to Amend the Central Bank of Nigeria Act 2007, and Matters Connected Therein’, and An Act to Amend the Central Bank (establishment) Act 2007 to Make the Central Bank More Transparent and Accountable in its Operations and to Ensure Enhancement of its functions and for Connected Matters’.

    The crux of the two amendments already consolidated by the Senate is the ban on the CBN governor and his deputies from partisan politics, reconstitution of the CBN Board; subjection of CBN staff remuneration to the Salaries and Wages Commission; and ceding the position of the Board Chairman to a person outside the CBN. Also proposed prohibition of use of foreign currency in local transactions. Until this proposal, the Governor doubles as the Board Chairman.

    The preoccupation of the sponsors of the bills is to enhance transparency and efficiency of the Central Bank of Nigeria, and to strip its governor of certain powers. The Senate Committee on Banking and Finance is saddled with the responsibility of reviewing and working on these bills for the Senate to take a position. Whatever is the expectation of the sponsors, it is important that the National Assembly does not in a spasm of emotion erode the independence of the Bank. CBN Act 2007 had settled this.

    It was a common knowledge that the immediate past CBN governors hiatus and unprofessional conduct by engaging in partisan politics may have warranted this quest.His action was an infraction,and antithetical to his oath of office. It was also against the norms of central banking ethics. Anger against a rare singular infraction should not be used as an excuse to cripple a vital organ of government as the CBN. It amounts to throwing the baby away with the bath water.

    An International Monetary Fund (IMF) working paper titled: The Role of Board Oversight in Central Bank Governance: The Legal Design Issues describe the Central Banks as a public law institution established to fulfill essentially sovereign functions delegated to them by the State. It admitted that certain central bank laws explicitly prohibit certain operations. Continuing, the paper said, for a central bank to be effective, it must enjoy a high level of autonomy vis-à-vis both political institutions and private economic interest. This autonomy it enumerated as: institutional, functional, personal, and financial. Institutionally it said the central bank should not be influenced by the State or private third parties in its decision-making in the context of the performance of its functions, e.g., through ministerial instructions. Functional points to its capability to implement its functions without direct governmental interference, and Personal ensures that key decision makers of the central bank (Governor and members of the Executive Board, Monetary Policy Committee and Oversight Boards) are autonomous from political and private economic interest. The Financial entails the capability of the bank to pursue its mandate by way of the financial means required to do so (the emphasis is mine).

    Banning the CBN governor and his deputies from partisan politics is a good proposal, and well approved. But to appoint/impose an outsider as the chairman of the board other that its governor is incongruous with global central banking practice. Typical of our clime, as being proposed will not augur well for a critical institution as the CBN. The infraction of its former governor – highly condemned, is not an excuse to deal a fatal blow on the Bank. It amounts to killing a fly with a sledgehammer.

    Subjecting its staff salaries to an external body violates the financial independence of the Bank. Infractions committed by its former governor have nothing to do with staff welfare. There are other organs of government earning far higher than the CBN staff, yet the legislators turned the blind eye.

    Why are all eyes on the CBN? Are the Nigeria National Petroleum Plc staff salaries a subject of scrutiny by the National Salaries and Wages Commission, the Debt Management Office (DMO), the Nigeria Deposit Insurance Corporation (NDIC), and many others? It is public knowledge that the staff of some of these agencies earn fantastically higher, (excluding other perks) than CBN staff.

    The Central Bank of Nigeria like its peers is the heart of the monetary system of the country. Nigeria’s economy is influenced heavily by the actions it takes, thus, any spasm of irrational decisions to alter or whittle what international investors and global partners would see as an erosion of the Bank’s independence, will further hurt the already fragile economy. It Was the Central Bank of Nigeria during the COVID-19 pandemic that ensured the stability of the economy while other organs of government were at a loss on what to do. The CBN should not be politicized. What happened under Godwin Emefiele was a rash decision that should be treated in isolation.

    Amending the Act is not investor friendly, and it should be jettisoned. It will also encumber the effectiveness of monetary policy, and once the institution is seen as an appendage of the political class, there will be loss of faith, and confidence, in the economy. Ultimately, the economy will suffer for it.

    Mr. Uche Tochukwu, a financial expert, said tweaking the CBN Act Now because of what happened under Godwin Emefiele will hurt the economy and the integrity of the CBN. He welcomed the decision of the lawmakers to ban the Governor and his deputies from partisan politics but frowned at appointing an outsider as the Bank’s Board Chairman. He said it is an aberration. Tochukwu called the attempt to subject the CBN staff salary to Salaries and Wages Commission as meddlesomeness. What about their own opaquely fatty allowances the public has decried? Doing that, they advised, will kill the morale of the staff. Are we even sure the staff are earning fantastically, he asked?

    The legislators should get serious with other national pressing issues in the economy rather than tampering with the CBN Act.Dr. Babatunde Adisa, an economist said. He said, globally, the independence of central banks is high advocacy, why are our own legislators thinking of reversing the CBN gear of progress. He said those advocating for the weakening of theCBN governor’s power or administration of the institution are not in tune with reality.

    Thus, the National Assembly should be guided as posterity will not forgive them if they are resolute on this unprofitable voyage.

    *Chisom Adindu writes from Umuahia, Abia State.

  • Breakdown Of Tinubu’s 63rd Independence Day Celebration Address

    Breakdown Of Tinubu's 63rd Independence Day Celebration Address

    On the occasion of Nigeria’s 63rd Independence Day celebration, President Bola Ahmed Tinubu on Sunday morning addressed the nation with a message of hope, unity, and commitment to a better future.

    In his maiden Independence Day speech, Tinubu acknowledged the sacrifices of Nigeria’s founding fathers and emphasized the importance of democracy, reform, and economic development.

    He also outlined his administration’s efforts to address the challenges facing the nation, especially in the context of recent economic reforms. This article provides an overview of President Tinubu’s address, highlighting key points and policy initiatives.

    Unity in Diversity

    President Tinubu began his address by acknowledging Nigeria’s rich diversity in ethnicity, religion, culture, and tradition. He praised the nation’s unity despite its diversity, emphasizing that Nigeria’s strength lies in its ability to forge ahead as one indivisible unit. He called on all Nigerians to cherish and love their country, emphasizing that Nigeria belongs to each and every citizen.

    Commitment to Democracy

    Reflecting on Nigeria’s democratic journey, President Tinubu celebrated the country’s commitment to democracy and the rule of law. He acknowledged the recent election that led to his presidency, highlighting that Nigeria had elected its 7th consecutive civilian government. This, he stated, is evidence of Nigeria’s unwavering commitment to democratic principles.

    Economic Reforms and Fuel Subsidy

    President Tinubu acknowledged the economic challenges facing Nigeria and the necessity of bold reforms to secure the nation’s future prosperity. He explained that his administration had made the difficult decision to end the fuel subsidy, despite the hardships it had caused. He argued that these reforms were necessary to build a strong foundation for Nigeria’s future and ensure that the nation’s wealth benefits all citizens, rather than a select few.

    Wage Increase and Grassroots Development

    To alleviate the economic burden on ordinary Nigerians, Tinubu announced a provisional wage increment for low-grade workers.

    Over the next six months, these workers would receive an additional Twenty-Five Thousand naira per month. Additionally, Tinubu said his administration had established an Infrastructure Support Fund for states to invest in critical areas and provide relief packages against rising prices.

    Transportation Reforms

    The President outlined significant transportation reforms aimed at lowering transport costs and making the economy more robust. He said that the Federal Government had introduced cheaper and safer Compressed Natural Gas (CNG) buses, which would operate at a fraction of current fuel prices, positively affecting transport fares. This initiative would not only lower costs but also create new opportunities for transport operators and entrepreneurs.

    Central Bank Reforms

    Tinubu announced ongoing reforms in the Central Bank of Nigeria (CBN) to address past lapses and prevent future occurrences. A new leadership for the CBN had been constituted, and a special investigator was working on presenting findings regarding past issues. Monetary policy would henceforth benefit all Nigerians and not just a privileged few.

    Tax Reforms and Investment Funding

    Recognizing the importance of wise tax policy, President Tinubu inaugurated a Committee on Tax Reforms to improve tax administration and address fiscal policies hindering economic growth. Furthermore, investment funding for enterprises with great potential had been provided to boost employment and urban incomes. The government was also increasing investment in micro, small, and medium-sized enterprises.

    Social Safety Net

    To protect vulnerable households, the President announced an expansion of cash transfer programs to an additional 15 million households. This initiative aimed to provide a social safety net and alleviate the impact of rising food and commodity prices.

    Insecurity

    President Tinubu assured Nigerians of his administration’s commitment to ensuring their safety and security. He highlighted increased inter-service collaboration, intelligence sharing, and efforts to rebuild the capacities of security services. The sacrifices of the security forces in preserving national security were acknowledged and honoured.

    Inclusivity in Appointments

    The President emphasized that key appointments would be made in accordance with the Constitution and with fairness to all Nigerians. He assured that women, youth, and the physically challenged would continue to receive due consideration in these appointments.

    Acknowledgments and Unity

    President Tinubu expressed gratitude to the National Assembly and the judiciary for their roles in Nigeria’s democracy. He also commended civil society organizations and labour unions for their dedication in the struggle for a better Nigeria.

    In closing, he called on all Nigerians to embrace courage, compassion, and commitment as they collectively work towards a better Nigeria.

    See Full Address Below:

    ADDRESS BY HIS EXCELLENCY, PRESIDENT BOLA AHMED TINUBU, GCFR, PRESIDENT AND COMMANDER-IN-CHIEF, FEDERAL REPUBLIC OF NIGERIA IN COMMEMORATION OF THE 63RD INDEPENDENCE ANNIVERSARY OF NIGERIA ON SUNDAY, 1ST OCTOBER, 2023

    Dear Compatriots,

    It is my unique honour to address you on this day, the 63rd anniversary of our nation’s independence, both as the President of our dear country and, simply, as a fellow Nigerian.

    On this solemn yet hopeful day, let us commend our founding fathers and mothers. Without them, there would be no modern Nigeria. From the fading embers of colonialism, their activism, dedication and leadership gave life to the belief in Nigeria as a sovereign and independent nation.

    Let us, at this very moment, affirm that as Nigerians, we are all endowed with the sacred rights and individual gifts that God has bestowed on us as a nation and as human beings. No one is greater or lesser than the other. The triumphs that Nigeria has achieved shall define us. The travails we have endured shall strengthen us. And no other nation or power on this earth shall keep us from our rightful place and destiny. This nation belongs to you, dear people. Love and cherish it as your very own.

    Nigeria is remarkable in its formation and essential character. We are a broad and dynamic blend of ethnic groups, religions, traditions and cultures. Yet, our bonds are intangible yet strong, invisible yet universal. We are joined by a common thirst for peace and progress, by the common dream of prosperity and harmony and by the unifying ideals of tolerance and justice.

    Forging a nation based on the fair application of these noble principles to a diverse population has been a task of significant blessing but also serial challenge. Some people have said an independent Nigeria should never have come into existence. Some have said that our country would be torn apart. They are forever mistaken. Here, our nation stands and here we shall remain.

    This year, we passed a significant milestone in our journey to a better Nigeria. By democratically electing a 7th consecutive civilian government, Nigeria has proven that commitment to democracy and the rule of law remains our guiding light.

    At my inauguration, I made important promises about how I would govern this great nation. Among those promises, were pledges to reshape and modernize our economy and to secure the lives, liberty and property of the people.

    I said that bold reforms were necessary to place our nation on the path of prosperity and growth. On that occasion, I announced the end of the fuel subsidy.

    I am attuned to the hardships that have come. I have a heart that feels and eyes that see. I wish to explain to you why we must endure this trying moment. Those who sought to perpetuate the fuel subsidy and broken foreign exchange policies are people who would build their family mansion in the middle of a swamp. I am different. I am not a man to erect our national home on a foundation of mud. To endure, our home must be constructed on safe and pleasant ground.

    Reform may be painful, but it is what greatness and the future require. We now carry the costs of reaching a future Nigeria where the abundance and fruits of the nation are fairly shared among all, not hoarded by a select and greedy few. A Nigeria where hunger, poverty and hardship are pushed into the shadows of an ever fading past.

    There is no joy in seeing the people of this nation shoulder burdens that should have been shed years ago. I wish today’s difficulties did not exist. But we must endure if we are to reach the good side of our future.

    My government is doing all that it can to ease the load. I will now outline the path we are taking to relieve the stress on our families and households.

    We have embarked on several public sector reforms to stabilize the economy, direct fiscal and monetary policy to fight inflation, encourage production, ensure the security of lives and property and lend more support to the poor and the vulnerable.

    Based on our talks with labour, business and other stakeholders, we are introducing a provisional wage increment to enhance the federal minimum wage without causing undue inflation. For the next six months, the average low-grade worker shall receive an additional Twenty-Five Thousand naira per month.

    To ensure better grassroots development, we set up an Infrastructure Support Fund for states to invest in critical areas. States have already received funds to provide relief packages against the impact of rising food and other prices.

    Making the economy more robust by lowering transport costs will be key. In this regard, we have opened a new chapter in public transportation through the deployment of cheaper, safer Compressed Natural Gas (CNG) buses across the nation. These buses will operate at a fraction of current fuel prices, positively affecting transport fares.

    New CNG conversions kits will start coming in very soon as all hands are on deck to fast track the usually lengthy procurement process. We are also setting up training facilities and workshops across the nation to train and provide new opportunities for transport operators and entrepreneurs. This is a groundbreaking moment where, as a nation, we embrace more efficient means to power our economy. In making this change, we also make history.

    I pledged a thorough housecleaning of the den of malfeasance the CBN had become. That housecleaning is well underway. A new leadership for the Central Bank has been constituted. Also, my special investigator will soon present his findings on past lapses and how to prevent similar reoccurrences. Henceforth, monetary policy shall be for the benefit of all and not the exclusive province of the powerful and wealthy.

    Wise tax policy is essential to economic fairness and development. I have inaugurated a Committee on Tax Reforms to improve the efficiency of tax administration in the country and address fiscal policies that are unfair or hinder the business environment and slow our growth.

    To boost employment and urban incomes, we are providing investment funding for enterprises with great potential. Similarly, we are increasing investment in micro, small and medium-sized enterprises.

    Commencing this month, the social safety net is being extended through the expansion of cash transfer programs to an additional 15 million vulnerable households.

    My administration shall always accord the highest priority to the safety of the people. Inter-Service collaboration and intelligence sharing have been enhanced. Our Service Chiefs have been tasked with the vital responsibility of rebuilding the capacities of our security services.

    Here, I salute and commend our gallant security forces for keeping us safe and securing our territorial integrity. Many have paid the ultimate sacrifice. We remember them today and their families. We shall equip our forces with the ways and means needed to perform their urgent task on behalf of the people,

    We shall continue to make key appointments in line with the provisions of the Constitution and with fairness toward all. Women, Youth and the physically challenged shall continue to be given due regard in these appointments.

    May I take this opportunity to congratulate the National Assembly for its role in the quick take-off of this administration through the performance of its constitutional duties of confirmation and oversight.

    I similarly congratulate the judiciary as a pillar of democracy and fairness.

    I also thank members of our dynamic civil society organizations and labour unions for their dedication to Nigerian democracy. We may not always agree but I value your advice and recommendations. You are my brothers and sisters and you have my due respect.

    Fellow compatriots, the journey ahead will not be navigated by fear or hatred. We can only achieve our better Nigeria through courage, compassion and commitment as one indivisible unit.

    I promise that I shall remain committed and serve faithfully. I also invite all to join this enterprise to remake our beloved nation into its better self. We can do it. We must do it. We shall do it.!!!

    I wish you all a happy 63rd Independence Anniversary.

    Thank you for listening.

    May God bless the Federal Republic of Nigeria.