Financial experts have called for more transparency and independence in the leadership structure at the Central Bank of Nigeria (CBN) to enable it steer the nation’s monetary policies towards an improved economy and a stronger naira.
Speaking during a virtual roundtable organised by the Association of Capital Market Academics of Nigeria (ACMAN) yesterday, the experts stated that there were flaws in the foundational structure of the CBN that saw its governors recommended by the President of Nigeria while members of the committee of its governors’ board were nominated by the CBN governor.
They also stressed on the need for the country to improve production to subsidise the value of the naira rather than emphasise on exportation that would be used to attract dollars into the economy but later used to make purchases of more imported goods.
Speaking at the event, the founder of Cowry Assets Ltd, Johnson Chukwu, stated that the environment in which the CBN governors functioned beyond their mandates had become a recurring event that needed to be corrected by future governors.
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He noted that the major responsibility of the CBN was to function within price fixing of the naira and the monetary decisions of the government, calling for a structure that “will prevent a future CBN governor to repeat the mistake of the immediate three CBN governors of intervening in the financial aspect of the economy and capital projects with the accountability of the CBN governor encouraged.”
Chukwu called for the introduction of a performance index for CBN governors that should be measured at time intervals to hold them accountable while in office.
He further said, “We must have an independent board for CBN, today, corporate governance is pushing that, big institutions are having more non-executive directors than executive directors. This is so that the governance system of CBN will have independent directors for people to speak their minds.”
A former Chief Economic Adviser to former President Obasanjo, Prof Magnus Kpakol, said the problem of the country was that there was not enough production to meet the needs of the people.
Kpakol, while stating that there was nothing wrong with the unorthodox way the CBN intervened in the economy, said the reason for its inefficiency was the political capture of the institution which prevented accountability.
He said, “Going forward, if we can have a CBN governor appointed that understands development, international and political economy, as well as understands how to work well with the fiscal side of the equation, I think they will do much better.”
On her part, the CEO of Emerging Africa Group, Toyin Sanni, stated that the inability of the CBN to proactively manage the naira led to foreign investors shying away from the Nigerian bank.
She stated that choices made by the CBN to rescue states with funds affected the growth of the sub-national bond market.
While stating that a more harmonised management of the financial sector was needed, she added that gains made in the capital market could be eroded by the choices of the CBN.
