Central Bank and enlightened self-interest

In 1971, Idi Amin Dada, Uganda’s famous dictator ran out of money to run the Government. He was furious when he was told he could not just print money through the Central Bank and continue his spend thrift promotion of his megalomania. He reminded everybody that he was the boss and ordered the Central Bank to print more money. This action of course caused massive inflation and led to the collapse of the economy. It is widely believed that Idi Amin subsequently ordered the assassination of the Central Bank Governor, Joseph Mubiru who had told him it’s unwise and dangerous for people with power to toy with the Central Bank. It was easy to kill Mubiru but impossible to address the problems caused by interfering with the Central Bank. The prices of goods soared while essential commodities simply disappeared from the market. It was in that context that Idi Amin turned to the Asian community and expelled them for creating an economic sabotage that he himself was responsible for. When he expelled the 50,000 Asians with British nationality, the revenue of the Ugandan government fell by another 40%. The moral of the story is that you do not mess with the Central Bank just because you have power. Our national Assembly must reflect deeply on the wider implications of their move to strip the Central Bank of its autonomy so that they can start re-writing the budget of the Central bank as they have been doing with the budget of the Executive.

The Governor of the Central Bank, Sanusi Lamido Sanusi is someone who has really annoyed the National Assembly through his revelations about their budget and overheads. The National Assembly is a powerful institution and it can easily fall into the trap of changing the CBN Act to deal with Governor Sanusi. The institution is however too important for our collective survival for such a response. I am concerned because certain tendencies noticed in the National Assembly about adjusting budgets to cater for personal interests of legislators. It was the German sociologist, Max Weber who stated that: “There are two ways of doing politics. Either one is living for politics or one lives from politics”. Clearly, the Nigerian political class in general live from politics. In order to succeed in their mission, the professional Nigerian politician is forced to have the logic of an entrepreneur, not in the sense that, when elected, they manage public affairs with the best use of resources to pro- duce the profit that would benefit the society. They are entrepreneurs in the sense that they build for themselves a capital of resources that is useful for their primitive accumulation of capital and the resources thus acquired are used as a capital base to acquire more power.

It is in this context the Constitutional powers of the National Assembly to appropriate has been used increasingly to add projects that they can monetise subsequently or to negotiate with Executive bodies to provide monetary compensation to legislators to have their budget passed. President Goodluck Jonathan had to warn his ministers this year to stop bribing legislators to get additional projects into their budgets. The insistence of the National Assembly to do the budget of the Central Bank is extremely dangerous because the bank not only supervises other banks, runs monetary policy but also prints money. For the past twelve years, the National Assembly has consistently bloated the Federal budget without bothering about where the extra money can come from. Because the extra money is not available, the Executive has consistently been unable to execute the annual budget. If the National Assembly is able to redo the budget of the Central Bank, they can make provisions to start playing god with our economy for short time personal pecuniary gain.

I argued in this column on 9th April this year that the problem of the National Assembly is that while they have oversight powers over the Executive, no other power has oversight over them. I recalled then that it was Nasir el Rufai who first blew the whistle when he alleged in 2003 that legislators had demanded for a hefty bribe to facilitate his ministerial appointment. He has been hounded and harassed by legislators since that time. It was the hapless and naïve Professor Fabian Osuji, one-time minister of education that dramatized the routine character of corruption in Executive-National Assembly relations. He had been asked for a bribe of 55 million naira to ensure cuts will not happen to his ministry’s budget. He asked his permanent secretary whether this was acceptable and he was told that it was “normal executive-legislative relations”. Having been told it was “normal”, he called the parastatals in his ministry and asked them to pay up their percentages of the bribe. He got into trouble and was sacked. His crime was allowing a memo to ask for bribe money. People laugh at him today for his naiveté. I have heard people say that the “correct” approach was to mask the bribe money in fake contracts so that the bribe does not enter official records as bribe. This is the tragedy of our nation as the public service has developed a huge capacity to mask corruption and present it as normal government business.

On Thursday 29th July 2011, the Senate President dis- solved the Committee on

Communications chaired by Sylvester Anyanwu for telling a lie and bringing the Senate to ridicule. The Committee had claimed that they had studiously screened the Chair, Executive Chair and Commissioners of the Nigerian Communications Commission (NCC) and it turned out that they did no such thing. Rather than carry out their legislative functions, they had been “settled” and did not even bother to go through the screening routine. No wonder that they approved over 6 billion naira for the Commission to carry out the registration of subscriber identification module (SIM) cards for GSM phones while everyone knew that the registration was being done by the phone companies not by NCC.

There are indeed clear indications that increasingly, National Assembly Committees are approving budget lines that were not conceived by the originating ministries. They make the allocations with the intention recovering the monies later by using their “oversight might” to blackmail ministries and agencies to pass on the budget lines to them. We are all witnesses to the recent Herman Hembe scandal with regards to request for bribe to the Securities and Exchange Commission. The real issue outside the criminal element of lawmakers demanding bribes is the ethical question of committees asking government ministries, departments and agencies they are over sighting to fund the oversight process. This means the results of the oversight process are determined by the quantum of bribes rather than the facts of the case. We must develop a system of over-sighting the over-sighters.

While we have some fine and committed legislators, many of them are not focused on serving the interests of the people, their actions are self-serving. They are holding the country to ransom and abusing their powers excessively. They should stay off the Central bank because the implications of politicising and monetising direct benefits from the budget of the Central Bank could have dire consequences for our eco- nomic survival. While they can have copies of the budget and get regular information on monetary policy decisions of the Central Bank, they should keep their distance on the issue of tinkering with their budget.