NIGERIA’S CENTRAL BANK: REINFORCING ITS INDEPENDENCE – REVISITED

Nigeria’s Central Bank, CBN – No Doubt At All- Has Become The Brightest Star On The Nations Financial Firmament.
A good custodian of the Naira currency, it has stabilized its value amidst a vicious, challenging recession. And the UN body, International Finance Corporation, has commended Nigeria’s apex bank, for introducing, implementing large-scale reforms and putting in place systems for result-measurements.

At the inception of this magazine, we made a case for reinforcing the independence of the CBN, a necessary prerequisite to sustain good central banking. We make the case, once again, in this anniversary issue.

“The right man, at the right place, at the right time” – when a high official in a delicate job in a third-world country, grudgingly attracts the commendation of analysts, in advanced, developed economies – as Godwin Emefiele has done- it is generally because he is firmly doing something right. These western analysts are usually inclined to cheer on public officers dissenting against an existing established order, because such dissension reinforces the perception that theirs’ is the superior system and everyone else should conform to their perceptions, no matter the resulting chaos.

 

Time and again, such sweeping foreign prescriptions have proved disastrous in emerging economies. The irony is that these prescriptions are generally the opposite of what is practised in the so-called advanced economies. Call it an axiom, if you may, to say that a measure of the progress of an economy is the amount of independence it grants it’s central bank.

A major factor in the prestige commanded by the German Central Bank, the Bundesbank, prior to the establishment of a central bank of the Euro Zone was its vaunted independence. In fact the Bundesbank was the model on which the European Central Bank was crafted. Dare we add, that an independent Bank of England played a pivotal role in building up Britain’s financial power since the 19th Century?

CBN Governor has been presiding over and managing an improving foreign currency reserve position. He has forecast the reserves will hit $50billion soon. The current level is $47.4 billion.