Two Sanusis for the price of one: Ex and present CBN governors say no to reducing apex bank’s powers

by Rachel Ogbu

Picture: ThisDay Live

Former governor of the Central Bank of Nigeria (CBN), Joseph Sanusi has backed Sanusi Lamido Sanusi, the present governor as he fights plans by the House of Representatives to reduce the independence of the apex bank and weaken the powers of its leadership.
At a recent public hearing organised by the House Joint Committee on Justice, Banking and Currency, the ex CBN governor asked the representatives to think carefully about their new plans to weaken the national bank as it was more profitable to have a strong independent central bank.
He said amendments were only the fallout of a communication gap between the parliament and the apex bank arguing that if the law was amended to make the governor an ordinary executive member in the board, it will automatically reduce the confidence and esteem a CBN governor will have among its peers from other countries.
The caution came at a public hearing on a bill seeking to amend the CBN Act of 2007.
The bill seeks to allow the appointment of a person, other than the governor of the CBN as Chairman of the bank’s board, as well as exclude the deputy governors of the bank from being members of the board. The bill also seeks to divest the board of the power to consider and approve the annual budget of the CBN.
While the Senate’s bill was published in the National Assembly Journal Volume 8, number 54 of April 13, 2012, and registered as Senate Bill 75, the House of Reps’ bill seeks to amend Section 6(2) of the CBN Act (2007) to remove the CBN governor as chairman of the board and exclude the deputy governors and directors as members of the board. It was published in the same journal four days after – Volume 8, number 62, dated April 17, 2012, and dubbed HB.12.03.276.
Both bills seek to divest the board of the CBN of its powers to appropriate and approve the annual budgetary estimates of the bank, contrary to Section 6 (3) (a) of the CBN Act 2007 which stipulates that the board shall be responsible for the consideration and approval of the annual budget of the bank.
Lamido, who was represented by the deputy governor (Operations), Tunde Lemo, warned that removing the administrative and financial autonomy of the bank would prevent it from discharging its mandate effectively. The current CBN governor, who led the presentations said that subjecting the bank’s budget to scrutiny by the National Assembly would be used to score political points.
He explained that the independence of the bank is a concept that has gained global acceptance and any attempt to erase the concept in Nigeria will be like swimming against the tide of global standards in banking regulation.
In a presentation to buttress the arguments for an independent bank, another ex CBN governor, Adamu Ciroma, said the proposed amendments to the CBN Act would create a complex problem and portray Nigeria as a non-conformist to international best practices.
“In deep conscience and honesty, I cannot find the rationale behind this plan. I urge you to leave this matter so that you don’t do anything outrageous and nonconforming,” Ciroma said.