There is some disquiet in Nigeria’s economic policy circles over a dispute between the central bank and a think-tank that has for years proffered guidance to those on the corridors of power on how to run the economy.
A series of concerns raised by The Nigerian Economic Summit Group on some monetary policies and the general malaise of the economy drew the ire of the Central Bank of Nigeria, which responded with a salvo, describing the leaders of the group as “bourgeoisie” who do not feel the impact of its development finance activities in the country.
Already, the crisis has led to three Chief Executive Officers of banks, who were board members of the NESG, to resign from the group.
In a statement titled “MATTERS OF URGENT ATTENTION,” the NESG on Tuesday September 8, issued listed a series of concerns over the economy, including CBN’s development finance activities, especially its Anchor Borrowers Programme under which it is pumping billions of naira into the agricultural sector, which it directly lends growers of selected cash crops. NESG also expressed worries over the high levels of insecurity in the land, Nigeria’s continued exposure to the vagaries of the oil market, and CBN’s management of liquidity in the country.
The NESG’s statement was signed by Asue Ighodalo, its chairman Board of Directors, and ‘Laoye Jaiyeola, CEO.
The group also expressed its concerns over a recent amendment of one of Nigeria’s banking legislations, the Banks and Other Financial Institutions, which has just been done by the Senate, ready to be sent to President Muhammadu Buhari for his accent.
“The NESG has expressed severe concerns about certain provisions of the ‘repealed and re-enacted’ Bank and Other Financial Institutions Act 2020; recently passed by both houses of the National Assembly, and in the process of being transmitted to the President for assent,” the group said in its statement.
“The Bill contains certain provisions which breach the provisions of the Nigerian Constitution, confers immunity on CBN officials and exempts actions by the CBN from judicial review. These are draconian, totalitarian, and inimical to the development of a stable and transparently regulated financial sector,” it added.
But NESG reached the conclusion above without crosschecking its facts, a point that the CBN in its response by Isaac Okoroafor, Director of Communications, said “there are many reasons why we see a total ignorance or malicious intent on the part of the NESG”.
First, it noted that the provision they refer to as being currently conceived as part of the new BOFIA already exists as Section 53 in the old Act, which is now Section 51 in the amended Act passed by the National Assembly.
“The current bill has not proposed any changes to that section at all. Second, contrary to their misleading anxiety and associated reportage, the provision of Section 51 does not purport to confer immunity on the Governor of the Central Bank of Nigeria like that which obtains for State Governors. Rather, this provision protects the Federal Government, the Central Bank of Nigeria and their respective officials against adverse claims for actions or omission in good faith exercise of powers under BOFIA and other specified statutes including the Central Bank of Nigeria Act and regulations made thereunder,” it said.
CBN explained further that the import of the said provision is to set a threshold against which suits against public officers must be filtered, such that for a suit to be maintainable it must scale that threshold by proving bad faith on the part of the pubic officer.
“It is not a bar against action. Indeed, a review of the legislative history of BOFIA will readily show that the said the provision also appeared as Section 49(1) of the then BOFIA of 1991,” it added.
It added that the same law is employed in other legislations including the extant:
a. Central Bank of Nigeria Act 2007 (Section 52),
b. the NDIC Act 2006 (Section 55) and
c. the Investments and Securities Act 2007(Section 302).
CBN was also miffed by the fact that NESG went to town with its statement without contact it, despite the cordial relationship that exists between the two institutions.
Besides, CBN felt exasperated by the fact that the group went ahead to send its press statement to BusinessDay newspaper, which in turn ran with the story without checking to know that what the group termed a new provision seeking immunity for governor Godwin Emefiele, was indeed an old provision.
As one analyst said, the CBN is not taking the fight lightly. The bank CEOs who resigned from the NESG board are Kennedy Uzoka, United Bank of Africa; Group Managing; Adesola Adeduntan, First Bank of Nigeria, and Abubakar Suleiman, Sterling Bank.
Suleiman resigned from the group despite the fact that Ighodalo, the NESG Board chairman, is also the chairman of Sterling.
“It took just a phone call phone the CEOs to resign,” said the analyst.
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