Don’t Tamper with CBN Autonomy, Soludo Warns Lawmakers

21 May 2012

Chukwuma  Soludo

By Obinna Chima

The immediate past Governor of the Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo, has cautioned members of the National Assembly (NASS) against amending the CBN Act 2007, with a view to removing the autonomy of the apex bank.

Soludo was said to have given the advice while speaking at a send-forth dinner organised for him at the weekend. He warned that any attempt to remove the autonomy of the banking sector watchdog, may lead to danger in the economy.

The CBN Act 2007 grants both administrative and instrument autonomy to the apex Bank in the management of the economy.

Both chambers of the NASS had set in motion the process of amending the CBN Act 2007 principally with the aim of diluting the powers of the Board of apex bank. In fact, the bill recently passed through a second reading at the House of Representatives.

Continuing, the Economist expressed fear that such an unfortunate development could hamper the effectiveness of monetary policy and the management of the macroeconomic framework of Nigeria, adding that the “the survival of the CBN, is at the heart of the survival of the Nigerian economy.”

He also decried a situation in which a disagreement with an individual could lead to the destruction of the entire institution. He therefore advised members of the NASS 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.”

The bill before the lawmakers provides for the appointment of a person, other than the CBN Governor, as the Chairman and the exclusion of CBN Deputy Governors and Directors as members 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.

SOURCE: ThisDay, 21 May 2012. http://www.thisdaylive.com/