© 2019 - International Centre for Investigative Reporting
CBN does not require approval of Buhari to function- Moghalu
FORMER Central Bank of Nigeria deputy president, Professor Kingsley Moghalu who contested against President Mohammadu Buhari in the 2019 presidential election has criticised the ban on forex for the importation of food into the country by the president.
On Wednesday during an interview, Moghalu said that the apex bank does not require the formal and explicit approval of the president in order to carry out its duties.
“That is another way of saying that the president himself or any political authority outside the bank should not be giving the bank direct instructions.”
The professor’s assertion came on the wake of President Buhari’s order to the Apex bank on Tuesday in Daura, Katsina State, where he hosted the All Progressives Congress (APC) governors to Eid-el-Kabir lunch.
The president said the foreign reserve will be conserved and utilized strictly for diversification of the economy, and not for encouraging more dependence on foreign food import bills considering the “steady improvement” in agricultural production and attainment of “full food security” in Nigeria.
But Moghalu, who cited Article 1 of the CBN Act (2007), –In order to facilitate the achievement of its mandate under this Act and the Banks and Other Financial Institutions Act, and in line with the objective of promoting stability and continuity in economic management, the Bank shall be an independent body in the discharge of its functions.
He maintained that “the issue here is not whether or not CBN should allow access to forex for food imports. It is about whether such an economic policy of a central bank should be imposed by a political authority.”
Nigeria’s entire economy appears to have been sub-contracted to our central bank, including industrial and trade policy. In the process the economy has fared poorly and the Bank has lost its independence. This is sad!
— Kingsley Moghalu (@MoghaluKingsley) August 13, 2019
However, he noted that the President can exercise his powers by approving on three key areas of the financial institution.
“This is a fundamental principle of central banking around the world over the last four decades. There are only three instances in the operations of the Central Bank where the Central Bank requires the direct approval of the president.
“First is the approval of the annual account of the Central Bank. The president must approve it. Second is the approval of currency designs.”
“For the Central Bank to issue the coin of the realm as we say (naira notes), the president has to approve those designs and proposals.
“Thirdly, any external investment by the Central Bank itself as an institution has to be approved by the president. Outside of these three specific instances, the Central Bank does not require the approval of the president in order to perform its job.”