I took my time to go through the so called state of the nation address released by Pastor Tunde Bakare, the general overseer of the Latter Rain Assembly, and could not but wonder what agenda he was pursuing and you may ask what kite he is flying in some of the far reaching statements he made particularly regarding the role of the central bank which in his opinion had contributed negatively in more ways than one to the travails of the economy. I do not have issues with those who have dedicated their lives to work in the vineyard of the Lord lending their voices to the voiceless and the downtrodden by drawing attention of those in government to be more responsive and accountable to address their plight. But when a man of God dabbles into technical issues as in this case he has in my considered opinion breached the divide and thereby exposes himself to all manner of accusations.
Godwin Emefiele just happened today to be by divine providence the governor of the central bank. Yes he provides leadership but he cannot personify the bank. The central bank is a robust and well-founded institution with a collective of expertise for the management of the economy such as it is not possible to find in any other institution in this country. The problem confronting this economy is well known to everyone and must not be mischievously and wrongfully ascribed as due to lack of expertise on the part of anybody as some compatriots would want us to believe. The fact that the Nigerian economy suffers vulnerability and is exposed to shocks in its dependence on income from the oil sector is well advertised. The price of oil fell from a high of US$116 per barrel in June 2014 to $33 per barrel in January, 2016, a decline of over 70 percent, and available data indicated that when prices were high the CBN got about $3.2 billion inflow monthly. Today, the bank receives less than $1 billion every month yet at the same time the export bill increased from N148 billion in 2005 to the current level of N920 billion! And this in a nutshell captures the dilemma of the central bank as it grapples with the challenge of controlling the rate of exchange as the reserves deplete without the immediate prospects of any accretion which had necessitated all the controls almost everyone is now complaining about.
Tunde Bakare without caution or decorum at the same breath accused the central bank of worsening the subsidy situation, accused it of irregularities with its forex policies, its wrongful management of the liquidity (currency in circulation) and for manipulating the 2007 CBN Act as it removed all the controls in the 1999 Act which regulated its powers regarding the management of liquidity in the economy. And you cannot but wonder how somebody with at best basic appreciation of the mandate and operations of the central bank could make such a statement including that the governor of the central bank in saner climes should have by now been cooling off in retirement because the bank acted on a mandate from the president. He thoroughly went overboard and in my opinion breached the boundary which acknowledged men of God should respect. It appeared he was mandated to do a hatchet job for those who have been angling to replace the governor of the central bank. Let us cursorily examine some of the observations made by Bakare is his state of the nation address.
He claims that adequate management of the exchange rate would remove the need for subsidy! It is difficult to underpin the logic here particularly in the context of what we all know now about the scam infested subsidy payment. If anything the current posture of the central bank in its refusal to allow the naira to go into a free fall as ‘economists’ recommend that market forces should be allowed to determine the rate could have worsened and exacerbated the subsidy payment situation. He accuses the CBN for being a conduit for politicians because the central bank acted on the mandate from fiscal authorities to release funds. The CBN is banker to the government and just as in our relationships with our respective banks we should ask ourselves if our banks could refuse to honour our cheques when properly drawn and our account is funded? And in this case you are talking of an unequal relationship. Will President Buhari today ask the central bank to release money and the bank flaunts that instruction! He castigates the CBN of the perpetration of corruption in 2007 review of the CBN Act which to all intents and purposes simply updated the 1999 Act as it appropriates to its self the sole responsibility of determining when to reorder the printing of currency notes. The CBN has a model of the economy which determines optimal liquidity based on the level of productivity and that is consistent with the perceived need for the maintenance of price stability. And the determination of the level of currency in circulation is therefore a technical issue which is intelligible only to the initiated and so it is difficult to conceptualize how the responsibility to determine the optimal level of liquidity in the economy could be domiciled elsewhere. These are really technical matters which a pastor, a man of God, has no business championing the way forward!
Dr Boniface Chizea wrote in from Lagos
