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CENTRAL Bank of Nigeria (CBN)
Governor, Sanusi Lamido Sanusi
Governor of the Central Bank of
Nigeria, CBN, Mr. Lamido Sanusi, yesterday, warned that Nigeria’s economy will
be greatly endangered if the independence of the apex bank was undermined.
·
In an interview with Bloomberg
Television Africa, on the sidelines of the World Economic Forum in Davos,
Switzerland, Sanusi said maintaining the independence of the bank will be a
major challenge that his successor will have to contend with, saying that it is
important for a strong individual to be appointed to head the bank, due to the
critical role it plays in the development of the country.
·
He said, “Any undermining of the
CBN’s independence may hurt the economy. If anyone tampers with it, the markets
would punish the economy.
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“The CBN is a very strong
institution that needs a strong leader and I think one of the things we have
achieved over the last four or five years is to show that we can have an
independent Central Bank in Africa.
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“It is extremely important from the
fiscal side, it is extremely important from the governance side, that the
governor of the Central Bank is able to speak independently of political
authority and raise an alarm and concerns, and give constructive criticism and
advice.”
·
In another interview with Reuters
Global Markets Forum, Sanusi ruled out further devaluation of the currency,
saying that the apex bank would continue to pursue a stable exchange rate
policy as long as the foreign reserves can support.
·
He further expressed concern about
Nigeria’s dwindling Excess Crude Account, saying that its ability to
successfully protect the naira will be based on the amount in the Excess Crude
Account and the Foreign Exchange Reserve.
·
According to him, a stable currency
is absolutely critical for price stability and financial stability in general,
adding that it is not in the interest of the country to devalue the naira,
because it will not have impact on the country’s current account balance, given
the highly inelastic nature of imports and the dominance of oil.
·
He said the Excess Crude Account,
ECA, had now fallen to just $2.5 billion, compared with $11.5 billion a year
ago, noting that until it is replenished there would be little room for a
reduction in the Monetary Policy Rate, MPR, below the current 12 per cent
benchmark.
·
He said: “We should continue to seek
a stable exchange rate for as long as the reserves and monetary conditions can
support this.”
·
Sanusi said he has no fears of
tightening monetary policy further to keep inflation down and to stabilize the
currency, noting that, if needed, the CBN will increase its Monetary Policy
Rate from 12 per cent and the Cash Reserve Requirement on public sector funds
to 100 per cent.
·
He added that: “I don’t think we are
at the end of possible tightening cycles, but I do think that the scope for
further tightening is getting narrower and narrower. We do need to rely more on
other instruments.”
·
He said the CBN will maintain
inflation within a band of six per cent to nine per cent this year, controlled
majorly by monetary conditions.
·
He said, “Government spending has
not been huge, the real challenge has been on the revenue side and on the
foreign exchange side. I see no reason why from 2015, Nigeria cannot move to
within the range of South Africa’s three percent to six percent, or four
percent to seven percent for inflation.”
·
Sanusi further stated that he was
unconcerned by personal relationships, saying that, “We meet at work and people
should do their job. I do hope that the president will be happy if I do the job
very well.”
·
Sanusi had over the years as CBN
Governor, made a number of controversial statements, drawing the ire of the
members of the National Assembly and the executive arm of government, when he
commented on the pay package of the legislators and asked questions on the
finances of the country, respectively.
·
It came to an head, when in
September last year, he wrote a letter to the Presidency, alleging that about
$49.8 billion of the country’s crude oil money has not been remitted by the
Nigerian National Petroleum Corporation, NNPC, to the Federation Account over a
19-month period.
·
The NNPC denied insinuations made by
the CBN Governor in the letter, saying Sanusi is ignorant of the operations of
the oil and gas sector and also playing politics with the issue.
·
The Minister of Finance and
Coordinating Minister of the Economy, Mrs. Ngozi Okonjo-Iweala, called a joint
press conference with the Minster for Petroleum Resources and the CBN to
explain the controversial figure and it was established after a reconciliation
meeting that it was not $49.8 billion that had not paid into the Federation
Account but $10.8 billion.
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However, a few days into 2014, it
was reported that the Presidency, angered by Sanusi’s decision to allegedly
leak contents of his letter to former President Olusegun Obasanjo, asked him to
resign, a request that he turned down, saying that he can not be forced out of
office until June, when his tenure is expected to elapse.
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