The immediate past governor of the Central Bank of Nigeria (CBN), Professor Chukwuma Soludo, has once again cautioned against the move by the National Assembly to tamper with the CBN autonomy as guaranteed by the CBN Act 2007, describing it as legislation in anger.
Soludo, who said this during an interview with CNBC Africa, said there are better ways of resolving issues bordering on the transparency and accountability of the apex bank without necessarily ruining the institution for posterity.
He said it would be a very sad day for the Nigerian economy if the amendment is passed.
“The way I read about the amendment, I see it as a legislation in anger. The question I want to ask the National Assembly is this: What kind of central bank do we want to leave for our children and grandchildren to inherit?”
Alluding to an Igbo proverb, Soludo said, “You don’t because of irritation of rats in the house set the entire house ablaze.”
Speaking earlier during a sent-forth dinner in his honour, Soludo had expressed fear that such development would hamper the effectiveness of monetary policy and the management of the macroeconomic framework of Nigeria, declaring that “the survival of that institution, CBN, is at the heart of the survival of the Nigerian economy”.
He warned that any attempt to remove the autonomy of the apex bank will lead to “ominous” consequences. He decried a situation in which a disagreement with an individual could lead to the destruction of the entire institution.
He therefore joined in the plea with the National Assembly members to have a “constructive dialogue” over the matter “in order to avoid going to the other extreme as the institution of the CBN must be preserved no matter the level of disagreement”.
Soludo was speaking against the backdrop of the ongoing move by the National Assembly to amend some vital sections of the CBN Act 2007 which grant both administrative and instrument autonomy to the apex bank in the management of the economy.
Both chambers of the National Assembly have set in motion the process of amending the CBN Act 2007 principally aimed at diluting the powers of the board of the apex bank.
The bill provides for the appointment of a person, other than the CBN governor, as the chairman and the exclusion of CBN deputy governors and directors from the membership of the bank’s board of directors.
It also seeks to divest the board of the power to consider and approve the annual budget of the bank. The bill, according to its sponsors, will enhance transparency and entrench the principle of checks and balances in the administration and operations of the CBN.
However, Soludo, who was the apex bank governor when the CBN Act was passed in 2007, insisted that such move would be tantamount to jeopardising the wellbeing of the entire economy.