01 August 2015, Lagos — For the Nigeria’s monetary policy to be protected at all times, the apex bank, the Central Bank of Nigeria, CBN, should be accorded full autonomy and independence.
Charles Mordi, former Director, Research Department of CBN, stated this in Calabar at the on-going seminar for finance correspondents and editors organised by the CBN.
He said for the CBN to performed optimally like other central banks all over the world, it must be able to take certain decision without necessarily been influenced by governments.
Mordi, in a colloquium titled: Measuring the credibility of Central Banks- The Case Study of Central Bank of Nigeria, said the bank is faced with numerous challenges in the course of implementing policies that will transform the nation’s economy and that ,it will be able to cope with all these without full independence.
He, however, stated that this does not imply that the bank should not be accountable in whatever it does, but it will aid the process of taking decisions at appropriate time.
He listed some of the challenges being faced by the bank to include time inconsistency of monetary policy, a development he said, has been a long standing issue that remains a challenge for all central banks.
Some of the challenges are keeping inflation low and stable to achieve price stability, sustaining financial stability -bad behavior, institutional governance and credibility of top echelon of the bank as well as fiscal dominance.
Speaking on the origin of the nation’s current economic downturn, Mordi said the suspension of the former CBN Governor, Sanusi Lamido Sanusi in February 2014 and the fall in prices of crude oil from July 2014 were majorly responsible for the country’s dwindling economic fortune were majorly responsible.
He said immediately the former CBN Governor was suspended, the market reacted and investors began to pull out of the country.
*Bamidele Ogunwusi – Daily Independent