The Central Bank of Nigeria (CBN) is supposed to be independent – in theory. The CBN Act of 2007 of the Federal Republic of Nigeria gave the Bank the overall control and administration of the monetary and financial sector policies of the Federal Government. One of the objectives of the CBN under the act is to “ensure monetary and price stability.”
President Muhammadu Buhari, it appears, does not believe in the independence of the CBN or its Monetary Policy Committee (MPC) to effectively tackle monetary issues. In a recent BBC interview, he stated that as far as a further devaluation of the naira is concerned, he is an unbeliever in the value of the move and will first need to convince him first.
The president spoke on other issues in the Friday, February 5, interview like how the war against corruption can only be fought when there is sufficient evidence which seems to be lacking at the moment. ‘‘To prosecute corruption successfully, we need evidence. That’s not easy especially in petroleum sector,” he said.
But one of the most important parts of the interview was his response on the devaluation of the naira which many analysts and investors believe to be necessary at this time considering the disparity in the exchange rates at the official and parallel markets. Buhari said he would have to be convinced beyond reasonable doubt that devaluing the naira was the best course of action before approving such and that so far he is not.
This is the second time in two weeks that Buhari is asserting this. He also said it when he met with Nigerians living in Ethiopia during his last visit.
He blamed the origin of the fall of the naira on the Structural Adjustment Programme of General Ibrahim Babangida’s military regime while revealing that he has told the Central Bank Director to convince him as to why the naira should be devalued.
“I have asked governor of central bank others to sit and see if they can convince me to murder the naira. I went through devaluation in 1984. It’s SAP that killed the naira,” he said.