The Central Bank of Nigeria’s (CBN) rate-setting body, the Monetary Policy Committee (MPC) meets today monday 20th January, under a cloud.
The mass of gray overhead has nothing to do with the recent public spat between the Office of the President of the Federal Republic of Nigeria, and that of the Governor of the CBN. Although most watchers of the Nigerian economy would argue that more than ever, the country is in need of very close cooperation between managers of its fiscal and monetary policies. Still, with a little over five months left on his watch, the CBN governor had long since moved into lame duck territory; and so the apparent disagreement over whether he should go immediately or in June is near irrelevant.
Of greater moment is the composition of today’s meeting. Statutorily, the MPC comprises twelve (12) members. Its quorum is of six (6) members, “two of whom shall be the governor and a deputy governor, or two deputy governors”.
Of the MPC’s twelve (12) members, Mr. Tunde Lemo, the Deputy Governor (Operations) at the Central Bank of Nigeria (CBN), retired on Friday, January 10, 2013, after serving two full terms of five years each. As at end-December, 2013, five (5) other members (Dr. Adedoyin Salami, Mr. John Oshilaja, Professor Chibuike U. Uche, Dr. Shehu Yahaya, and Professor Abdul-Ganiyu Garba), served out the first four years of their appointments.
So technically, the MPC meeting today is six (6) members short. Nonetheless, baring the unfortunate absence of any other member, it should still be quorate. This rather slim quorum shall comprise Sanusi Lamido Sanusi (Governor,CBN), as chairman, and Alhaji Suleiman Barau (Deputy Governor, Corporate Services), Dr. (Mrs) Sarah O. Alade (Deputy Governor, Economic Policy), Dr. Kingsley Moghalu (Deputy Governor, Financial System Stability), Daniel-Nwaobia, Anastasia (CBN Board Member), and Mr. Stephen Osagiede Oronsaye (CBN Board Member) as members.
Doubtless, the sense of CBN “independence” would be poorly served by an MPC thus constituted. “Independence” in this instance is not construed in terms of being beholden to the fiscal side of the economy. The governor has so dramatically demonstrated that the CBN is not lacking in this quality of autonomy.
The current concern is more with “independence” from the group thinking that could hem in CBN bureaucrats. And to tell the truth, the five members whose terms expired last year brought a whiff of fresh thinking into the apex bank’s policymaking. Invariably, when issues came to the vote over the four years to last December, the deputy governors were of the same persuasion with the governor on the CBN’s policy trajectory.
The economy is thus best served by having these five (5) folk at today’s meeting. The CBN also believes this; for as at Friday, last week, a couple of them had received invitations to participate at today’s meeting.
The CBN Act 2007 obviously anticipated this possibility, too. It provides that after their first four years in office, this category of MPC members “shall be eligible for re-appointment for another term of four years”.
This is where the dark clouds begin to gather. If “appointment” in the first instance involved choice by the President, subject to the Senate’s confirmation, what constitutes “re-appointment”?
The point of the Senate’s “confirmation” is about allowing the people’s representatives in a democracy to pronounce on the fitness and propriety of personnel put forward by the executive for jobs of this nature. The live broadcast of the hearings lent additional credence to this reading. All it said to the people was “here are the functionaries that the President has chosen to perform this onerous but important function, and this is what we, your representatives, think of them”!
Four years into that office, whereas the President may be satisfied with the performance of his appointees, the spirit of the provisions of the law around their appointment does suggest that a more expedient route would be to have the Senate re-confirm these folks, via a televised process — as it was done four years ago.
This may not happen. However, the least the CBN owes “we, the people”, as we do battle ceaselessly against vested interests, is to demonstrate a transparency in the “re-appointment” of these five members of the MPC.
Mr. Uddin an economic historian and finance expert lives and writes from Lagos.