THE Central Bank of Nigeria (CBN) has yet to appoint new external monetary policy committee (MPC) members as it is set to hold its first policy meeting this month.
On January 19, CBN announced that it would hold its first MPC meeting under the new leadership of its governor, Olayemi Cardoso, on February 26 and 27.
The MPC meeting was last held in July 2023 as the apex bank consecutively postponed the bi-monthly statutory function used to consider, recommend, and take critical economic decisions in September and November 2023 and could not hold it in January 2024.
The apex bank had resolved to hold its first MPC meeting in February and hinted that it would be replacing the five external members of the committee.
In a report on January 26, Bloomberg said some of the committee members said they had been sidelined ahead of the meeting.
It disclosed that four of the five external members said they had not been invited to the scheduled meeting and did not anticipate being there as they had been excluded from the usual planning of the MPC ahead of the February gathering.
It further disclosed that the external members said they had not been paid since August 2023 and had last heard from the Central Bank in September.
Meanwhile, CBN’s acting director of Corporate Communications, Hakama Sidi-Ali, had said the appointment of new independent MPC members was in the pipeline without details.
Former President Muhammadu Buhari and former CBN governor Godwin Emefiele appointed the five external members.
However, Sections 10 and 11 of the CBN Act 2007 provide the condition under which the external directors can be appointed, removed or replaced a legal practitioner, Tim Ngbejume, told The ICIR.
“If the provision of the law is not followed, it means the statuesque remains.” He said that implied that the former directors still hold their positions.
Section 10(1) of the CBN Act states that the five directors of the Bank shall be appointed by the President subject to confirmation of the Senate, and in appointing the five external directors of the Bank, the President shall have due regard to a fair representation of the financial, agricultural, industrial and commercial interests and the principle of federal character.
Section 10(2) states further that a director appointed pursuant to this section shall be a person of recognised standing and experience in economics, law, public administration, business administration, accounting, banking and finance, but as a director of the Bank, he shall not hold office as a director of the board of any federal, state or local government or of any other body.”
Also, according to the CBN Act, to facilitate the attainment of the objective of price stability and to support the economic policy of the Federal Government, there shall be a committee of the bank as MPC, which shall consist of the CBN governor who shall be the chairman of the committee, the four deputy governors of the CBN, two members of its board of directors, three-member appointed by the President, and two members appointed by the CBN governor.
“The appointment of a member of the MPC pursuant to Sub-section 2(d) and (e) of this section, the remuneration, filling of temporary vacancies, qualification, tenure of office and disqualification shall be subject to the same terms as are stipulated as a director under sections 10 and 11 of this Act,” the Act states.
The CBN’s proposed decision to replace its MPC’s external members has raised questions about possible interference in monetary policy decisions.
An economist, Muda Yusuf, had told The ICIR that the external MPC members are vital to making independent decisions about Nigeria’s monetary policy issues.
“Let’s give the President and the CBN governor the benefit of the doubt regarding the nomination of external members before the February meeting date, he said, adding that “there is a reason for some members’ external competition into the MPC to enable external and balanced perspectives on issues on monetary policy.”
Another economist, Omobola Adu, said holding February’s MPC meeting without any independent member would likely raise questions concerning the credibility of the decision and that having external members reduces the bias that internal or political pressures can influence the Central Bank.