TOMORROW’S public hearing by the Senate Committee on Banking/Insurance on the review of the Banking and Other Financial Institutions Act (BOFIA) aimed at whittling down the powers of the Central Bank of Nigeria (CBN), may suffer some setbacks.
This is due to Wednesday’s “minor” reshuffle of the committee chairmanship positions, which also affected the substantive unit steering the public hearing.
Senator Bassey Otu (Cross River South) was moved to the Senate Committee on Banking, Insurance and Other Financial Institutions, while Senator Ahmed Makarfi (Kaduna North) was appointed Chairman, Senate Committee on Finance in replacement for Otu.
The Committee on Banking, Insurance and Other Financial Institutions had called for memoranda from the public before the changes took place on Wednesday.
Efforts to reach Senator Otu, the new chairman, for comments on when the Public Hearing will actually commence in view of the “minor changes” was not fruitful, as his lines were switched off.
In the interim, it was gathered that the “banking committees” in both Chambers of the National Assembly have been under pressure ahead of the proposed public hearing, a situation Senators and House of Representatives members were neither ready to deny nor confirm at the weekend.
However, indications emerged in London on Friday that the CBN had commenced efforts to persuade the lawmakers to kill the bill seeking to review its Act.
Consequently, the CBN will soon write the lawmakers on why it should have a re-think on the bill.
Deputy Governor of the bank on Financial System Stability, Dr. Kingsley Moghalu, at a two-day Nigeria Development and Finance Forum (NDFF) held at the Guoman Hotels in London, said curtailing CBN’s power would impede the growth of the financial system and weaken the regulator’s ability to act fast to save the sector in the event of crisis like the recent one.
“The position is that we have had series of discussions with a number of parties involved in the process and the Central Bank is preparing to submit a formal position on the issues raised in the draft bill,” Moghalu said.
“We will send a formal position articulating reasons why leaving the CBN’s power as it is for now is in the best interest of Nigeria and the management of the financial system.”
He expressed confidence that ongoing discussions would lead to an improved relationship, with the CBN briefing the Assembly more frequently.
Besides, the banking regulator has held informal discussions with concerned individuals and interest groups on the matter.
The CBN Pensioners Club, an umbrella body for all retirees of the bank, which only recently resolved its legal disputes over delayed pension arrears accruing from the Harmonised Pension Scheme of the Federal Government, has given its backing to the CBN on the proposed BOFIA Act review.
In an “open letter to the National Assembly,” a copy of which was made available to The Guardian on Friday, the pensioners urged the Senate President, David Mark, and Speaker of the House of Representatives, Aminu Waziri Tambuwal, to consider the “merits and demerits of the actions,” before taking a full plunge.
According to the document, jointly signed by the club’s President, Chief Abidoye Akinlade, First National Vice President, Alhaji Musiliu Soetan, and General Secretary, Sam Ahirhima, the pensioners emphasised the need to protect the system.
“Indeed, CBN’s Contemporaries the world over, notably the Federal Reserve Bank, the Bank of England, Deutsche Bundes Bank, etc., usually enjoy reasonable autonomy, hence they remain strong always to perform their supervisory and other statutory functions,” the pensioners said.
“The Lawmakers should not throw away the baby with the bath water in the interest of all and sundry. The current CBN Act should be allowed to operate as it is now.”
Nonetheless, Jones Onyeyiri, the House Committee Chairman on Banking, where the Bill has passed the Second Reading and ready for the Committee Stage, told The Guardian on telephone that the CBN would not act in isolation with other economies.
“We will look at what obtains in other climes and bring it to bear in Nigeria, considering our own peculiarities. We will do a thorough job,” he said.
Onyeyiri said although the lower chamber was not in a hurry, “it is also not under any form of pressure regarding the bill.
“The committee will consider whether or not, it is necessary to amend the Bill in such a way that it tampers with the composition of the Board,” he said.
Onyeyiri, however, noted that the outcome of a future public hearing would be key to what finally becomes of the bill.
“Basically, we’ve sworn to uphold the Constitution, which says that sovereignty belongs to the people on whose behalf we are there as representatives,” he said.
He said although the Senate is already at the public hearing stage, the House wants to be “a little bit more thorough.”
The bill, which has passed the Second Reading in the House of Representatives, and is at the Committee Stage in the Senate, seeks to cut down the power of the CBN and curtail its independence by subjecting some of its functions (including budgeting) to legislative approvals.
The bill, among other recommendations, provides for the appointment of a person, other than the CBN Governor, as Chairman and the exclusion of the Deputy Governors and Directors as members of the Bank’s Board of Directors.
It also seeks to divest from the Board the power to consider and approve the annual budget of the bank.
The sponsors of the bill also want to enhance transparency and entrench the principle of checks and balances in the administration and operations of the CBN.
SOURCE: The Guardian 27 May 2012.
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