Moghalu Accuses Emefiele Of Politicizing Office Of CBN Governor

The 2019 Presidential Candidate of the Young Progressives Party (YPP),  Kingsley Moghalu has accused the under fire Central Bank of Nigeria (CBN) Governor, Godwin Emefiele of politicizing the clearing house.

Moghalu in a post on his official facebook handle disclosed that his grouse with Emefiele is that he has routinely subjected the operations of the CBN to the whims and caprices of the Presidency which according to him was far beyond what is the appropriate relationship, and compromised the independence of the CBN as a result.

The former YPP Presidential candidate said threw his weight on Emefiele over his decision to redesign some Nigeria’s naira notes.

Moghalu who was a deputy CBN Governor under late President Umaru Musa Yar’ Adua posited that Emefiele doesn’t need to get the approval of the Finance Minister; Zainab Ahmed before redesigning of the naira notes.

According to the economist,  Emefiele only needs the approval of the President to embark on such mission.

“Finance Minister Zainab Ahmed’s comment to the Senate that she was not aware of the Naira redesign by the Central Bank of Nigeria should not mislead anyone into thinking the CBN owes her that kind of information.

“The Bank only needs the approval of President Muhammadu Buhari for this particular exercise.

“It received that approval. There are only three issues on which, in the CBN Act of 2007, the Bank should obtain external authorization, and only from the President of Nigeria, for its operations: 1. Any alterations to the legal tender (the Naira); 2. any investment of the Bank’s funds outside Nigeria; 3. the Bank’s annual report.

“Outside of these, the only approving authorities for CBN operations are its Committee of Governors (note the “s”) consisting of the Governor and the four Deputy Governors, and the Board of Directors of the CBN, which includes the Governor, the four Deputy Governors, and 7 external members which include the Permanent Secretary of the Federal Ministry of Finance (?) and the Accountant-General of the Federation.

“My criticism of the current Governor of the Bank in the past is that he has politicized the central bank by routinely subjecting its operations to the whims and caprices of the Presidency far beyond what is the appropriate relationship, and compromised the independence of the CBN as a result.

“That is why the Finance Minister erroneously feels entitled to be informed or consulted.

“The CBN should now focus hard on the implementation of this policy. It will impose huge pressures on the banking system as I have said in another comment.

“How can the woman frying akara in the rural areas, who keeps most of her cash under her pillow, be aided to come into the banking system under this new policy?

“There are others as well whose money is outside the banking system for reasons that are not negative.

“I fully support the Central Bank of Nigeria redesign of the Naira. If 80% of bank notes in circulation  are outside the banks, that’s troubling.

“The CBN obviously wants to force all those notes back into the banking system. Those with the notes must surrender them to get new ones or else it becomes illegal tender after January 31 2023.

‘This is also a way to withdraw currency from circulation, an unorthodox way of tightening the money supply since the country is battling high inflation.

“The flip side is that people who are holding huge amounts of cash outside the banking system for nefarious reasons will go the parallel forex market to buy hard currency, putting further downward pressure on the value of the Naira as too much Naira will be chasing too few dollars.

“I doubt it will solve inflation because there also are other major reasons for inflation such as the forex crisis, which this new move could exacerbate, as well as the impact of the security crisis on food price inflation.

“But overall, this  is a necessary step, including for national security reasons. I just think the time window for its implementation is rather short.

“This will put a lot of operational pressure on commercial banks and the financial system in general. A 90 day window would have been better, but one can understand the need to avoid interfering with the elections.”