Abuja, May 27, 2024
The Conference of Civil Societies held a press conference in Abuja today to address the critical need for maintaining the autonomy of the Central Bank of Nigeria (CBN). Chairperson Adams Otakwu expressed gratitude to the media for their attendance, underscoring the collective desire for a strong economy supported by an independent central bank.
With inflation rates climbing to 33.69%, the CBN recently raised its Monetary Policy Rate to 26.25% in an effort to curb the economic tide.
Otakwu highlighted the heightened expectations Nigerians had for economic turnaround within the past year. The continuous rise in inflation has posed significant challenges, emphasizing the necessity for an autonomous CBN to implement effective monetary policies. He pointed out that global studies and the International Monetary Fund (IMF) support the notion that independent central banks are better equipped to control inflation.
The proposed amendments to the CBN Act by the National Assembly are seen as a threat to the bank’s autonomy. Otakwu and the civil societies warned that these changes could severely weaken the CBN’s ability to manage the economy. They urged the National Assembly to resist any attempts to dilute the bank’s independence, as this would disrupt the effective management of the economy.
Otakwu emphasized that now is not the time to push for amendments to the CBN Act. He advised that any legislative changes should be thoroughly evaluated and postponed until the economy is more stable. The current Act already includes sufficient mechanisms for oversight and intervention without compromising the CBN’s autonomy.
In his closing remarks, Otakwu called on the media and other stakeholders to continue spotlighting critical economic issues. By keeping these topics at the forefront, they can exert pressure on fiscal and monetary authorities to fulfill their constitutional responsibilities and contribute to the effective management of the Nigerian economy.
The full statement reads:
Protocol
I welcome you all to this press conference, where we will brief you about our concerns about the Nigerian economy, monetary policy, and its impact on ordinary Nigerians ahead of the forthcoming anniversary of the current administration.
Let me begin by appreciating the media for honouring our invitation, even on short notice. The large number of media practitioners here today indicates that you are desirous of having in place a vibrant economy supported by an independent Central Bank.
Nigerians in the past one year have had great expectations concerning a major turn around in the economy. Particularly of interest is the rate of inflation, which has continued to rise. Only last week, the Central Bank of Nigeria increased its Monetary Policy Rate to 26.25% to check inflation, which now stands at 33.69%.
While we, as civil society groups, continue to engage the CBN and the fiscal authorities to improve the fortunes of the economy, we are of the view that having an independent central bank in place will help to put inflation under check. This is why we would like to sound a note of caution ahead of the proposed amendment to the CBN Act by the National Assembly, which we consider ill-timed.
Without prejudice to the proceedings of the public hearing at the National Assembly, which we shall be part of on Thursday, May 30, 2024, we, in a rare move, align with the position of the International Monetary Fund (IMF) that many of the proposed amendments to the extant CBN Act will weaken the Bank as its autonomy will be severely threatened.
Studies worldwide show a direct correlation between independent central banks and adequate checks on inflation. We, therefore, urge the NASS to resist the attempt to deliberately weaken the CBN. Attempting to take away the bank’s autonomy under any guise would be tantamount to throwing spanners into the effective management of the economy.
In a few days, the current administration will be a year in office. We should focus on fixing the economy, not creating confusion by amending sections of the CBN Act that might weaken the institution. Now is not the time to push for an amendment to the CBN Act. Our advice is that an amendment to the CBN Act, if any, should wait and be well thought out. The present Act contains enough checks that the National Assembly can trigger, if it so wishes.
Gentlemen of the press, we are all stakeholders in this venture, I urge you to continue to flag issues around exchange rate pressures, rising input prices and security that still challenge the economy in your reports, thereby putting pressure on the fiscal and monetary authorities to play their constitutional roles in managing the economy.
God bless Nigeria.
Adams Otakwu
Chairperson, Conference of Civil Societies