• May not form quorum in January MPC meeting
  • This would hamper investors’ confidence- analysts


CBN Governor Godwin Emefiele

A fog of uncertainty has beclouded the ability of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to make binding decisions in its January meeting as it presently lacks the numbers of members required to form a quorum due to National Assembly’s resolve not to screen any appointee of President Muhammadu Buhari unless Ibrahim Magu, chairman, Economic and Financial Crime Commission (EFCC) is relieved of his appointment.

The CBN Act of 2007, which empowers the MPC to formulate monetary and credit policies, stipulates that the committee shall be constituted by 12 members, headed by the CBN governor. And it requires six members to form a quorum in any of its meeting. The Committee presently has only five members, following the retirement of Sarah Alade, former deputy governor, Economic Policy in April; Adebayo Adelabu, Deputy Governor, Corporate Services, who has tendered his resignation letter in a bid to contest for Oyo State governorship election in 2019; and the recent retirement of Suleiman Barau, Deputy Governor, Operations on December 12, has further depleted the committee.

The President had in April appointed Ummu Ahmed Jalingo, Justitia Odinakachukwu Nnabuko, Mike I. Obadan, Abdu Abubakar, and Adeola Adetunji as non-executive directors of the CBN board. He also nominated Aishah Ahmad as deputy governor and Adeola Adenikinju; Aliyu Sanusi; Robert Asogwa and Asheikh Maidugu as members of the MPC in October.  Dr. Doyin Salami and some other members of the committee retired earlier in the year.  But two months after, the Senate stuck to its guns not to screen any nominee from the president until EFCC boss is sacked.

With these few members, MPC can’t form a quorum to take a decision, a senior CBN official, who preferred anonymity, told Business Hallmark.

Prof. Leo Ukpong, dean, School of Business, University of Uyo reasoned that the inability of the committee to form quorum would not stop it from meeting in January.

“But usually, because of the critical nature of that committee, they would have to vote with whatever number they have. However, their votes are already predetermined. The executive arm of government has a lot of hands in what they do. So, I don’t think it would have a serious impact. Although it might create some uncertainties in the stock market, because the market may not be sure of what they want to do,” he further explained.

Mr. Johnson Chukwu, Managing Director, Cowry Assets Management Company Limited seems to agree.

“The CBN can still manage the monetary policies of the country without the MPC. But we are not going to get optimal results. It does not mean that if the MPC is not working then the CBN would abandon its function of overseeing the monetary policies of the country. My take is that this is not the best for the country and the economy. It will tug on the confidence of foreign investors.  And it could lead to skew policy decisions.

“The fact that they won’t form a quorum should not stop the Monetary Policy Committee from meeting. They can meet and make decisions. The enforcement of these decisions is what maybe a constitutional issue. Whether they will be able to enforce a hold, raise or cut in monetary rates is now an issue the legal luminaries would have to decide?” argued Moses Ojo, analyst with Panafrican Capital Plc.

The CBN Act of 2007 states that the MPC shall comprise of the Governor of the Bank who shall be the Chairman; the four Deputy Governors of the Bank; two members of the Board of Directors of the Bank; three members appointed by the President and two members appointed by the Governor.

The MPC had nine of its members in attendance during its last meeting in November, where it held the Monetary Policy Rate (MPR) otherwise called benchmark interest at 14 per cent for the eighth consecutive time in November.

Meanwhile, The CBN governor, Mr. Godwin Emefiele, recently hinted that the apex bank would consider reviewing interest rate downward in 2018, when the economy, which he said was still fragile, further improves.

Mr. Jim Obazee, former executive secretary, Financial Regulatory Council (FRC) had argued that CBN law negates the principle of good corporate governance, because its board of directors, which is chaired by the governor are dominated by the bank’s management.