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LCCI Kicks against CBN’s ‘Absolute’ Autonomy

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The Lagos Chamber of Commerce and Industry (LCCI), an arm of the Organised Private Sector (OPS), yesterday stated that although it stood firmly behind the idea of an autonomous Central Bank of Nigeria (CBN), absolute autonomy of the apex bank might be counterproductive.

The chamber dropped the hint at its second quarter conference on the economy, which was addressed by its President, Mr. Goodie Ibru, stressing that as  applicable in other advanced nations of the world, the CBN should be allowed to operate without encumbrances, as long as it did not become ‘law-unto-itself’.

“We need to stress that the global best practice is for the central bank to be autonomous, financially and operationally, in order to be able to  functions effectively and promptly. We align ourselves with the school of thought that is in favour of the preservation of the autonomy of the CBN,” LCCI stated.

“However, we concede that the autonomy cannot be absolute. In any events, no institution should have absolute powers. Therefore, what is necessary is to strengthen the existing structures of control within the framework of the CBN Act of 2007. We know for instance that the CBN governor is an appointee of the president of the country; therefore the president has some oversight responsibilities over the CBN governor. The board of directors also has powers of checks and balances even though the governor is the chairman of the board,” LCCI explained.

The OPS group further stated that to make the board play this role effectively, the number of independent directors, who are also appointees of the president, should be increased and they should be men and women of high intellectual and moral standing and should truly be independent.

According to LCCI, the deputy governors of CBN should also remain on the board in order to provide the desired technical input into the board’s deliberations.

The chamber stressed that it was the existing autonomous status of CBN that enabled it respond quickly to the challenges of the recent crisis in the Nigerian banking system, adding that it was on record that no bank failed in the process because of the speed and effectiveness of the apex bank’s intervention.

Scoring the entire performance of the nation’s economy for the first half of the year low, LCCI identified the power situation, security challenges and corruption as the most significant factors that set the economy backwards.

“The power situation is still a major problem for business across all sectors. Expectedly, energy intensive sectors have been the worst hit. Energy cost remains a major threat to business sustainability. We are of course aware of the power sector reforms being currently implemented by the government and we can only pray that the outcome begins to manifest sooner than later,” LCCI said.

On security, LCCI submitted that it had become a major challenge to investors and that it was already taking its toll on the economy with most of the states directly affected now on the verge of collapse; hospitality industry in the worst hit areas paralysed; massive relocation of small and medium businesses with the attendant risks and cost; inventories and stock of many companies trapped and loss of sales by companies across the country of up to 30 per cent due to their inability to access markets in troubled areas.

Article credit: Thisday  Newspaper

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Updated 7 Years ago

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