Director General of the Institute for Police and Security Policy Research (IPSPR), Dr Charles Omole has criticised the reported directive of President Muhammadu Buhari to the Central Bank not to provide Forex for food imports since Nigeria is now food sufficient.
Making his thoughts known on the issue, the political and good governance expert says the scenario is not only alarming but unexpected of leadership.
He says the president does not recognise the limits of its constitutional powers in a democracy.
He opined that by law, the President has only four areas of direct intervention and engagement with the Central Bank and these are appointment of CBN Governor (subject to Senate confirmation), approval of CBN annual account, approval of new national currency designs and approval of any CBN foreign investment if CBN wishes to invest externally.
These he stresses are the only four constitutional instances when the President can directly engage with the Central Bank officially. CBN has its operational independence enshrined in law.
Continuing further he says, ”So the idea that CBN can be operationally instructed by the President at will is unlawful, unwise and unhelpful for the country. A CBN that is seen as an extension of Aso Rock will lose all credibility and investors will lose confidence in its assurances and policy purity.
”CBN has to be seen as making decisions based on its independent best expert opinion and judgment rather than political manipulation of the economy. What is sad in this instance is the fact that CBN Governor or Board did not promptly respond publicly to assert its independence.
He opines that keeping mute has harmed the perception of its operational independence. Adding that this silence and lack of effective rebuttal is a real shame. Saying that the president may have meant well, but then there are ways he could have given effect to his wishes.
He continues saying, ”There are Fiscal (taxes etc) and Commercial (tariffs etc) tools that are firmly under government control that could have been implemented that will force a contingent & collateral response from CBN. Also, the President can always call CBN Governor privately and express his wishes
”The CBN Governor can also take note of the political wishes of the President in his consideration; but arrive at his independent conclusions of what is best for the economy. That is part of being in government.
”But a public instruction to the CBN by the President shows naivety, and complete disregard for the role of the CBN. It is not a government ministry that can be micromanaged and instructed this way. Credibility of the CBN is key to the respect given to its decisions and confidence the market has for it’s monetary policy steps.
The ended by saying that the Presidency should stop undermining the CBN but allow it to make decisions as it sees fit.
”Let’s build independent institutions and strengthen their operations. Enough of these basic errors regardless of any good intentions behind them. The falcon should be left alone by the falconer. Otherwise; things will indeed and truly fall apart” he says.
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