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An apex bank for all purposes

If you are any confounded at the degree to which Godwin Emefiele has transformed the landscape of the central banking to the point of becoming a gbogbonse bank, you are probably not alone. In fact, if the depth of activism of the traditional conservative apex banking institution could be said to be troubling in the last four years or thereabout, dear reader, like yours truly, probably want to put it to the unusualness of the times. Like the gbogbonse potion which in Yoruba refers to a multi-therapy, multi-purpose, cure-all medicine designed for all and any ailment under the sun, such has been Emefiele’s daring in pushing the frontiers of developmentalism to limits that the typically conservative brood have since become breathless!

I say this, not in the pejorative sense but in the context of the challenging role that the apex bank is routinely called to play at a time like this. Again, I make this point in the sense of the age-long, or if you like, traditional complementarity between the monetary policy side of governance and fiscal policy side of things as against the current tide under which the fiscal authorities appear to have gone AWOL!

And if I may refresh my old textbook reference to monetary policy as involving matters of interest rate and, money supply and fiscal measures as involving matters of taxation and government spending to influence aggregate demand, the imperative of their working together to deliver the public good stands out among the early lessons we were taught to imbibe.

Now, think of a twin-engine aircraft with one of the engines effectively out of action and yet must fly in troubled weather; or if you may, recall the late MKO Abiola’s analogy of a man clapping with one hand? Only in those contexts do you get a sense of the troubling inertia that has been the lot of the vital segment that should ordinarily take the lead at a difficult time like this.

Anchor Borrowers programme. Nigeria Textile Intervention Fund. Nigeria Electricity Market Stabilisation Fund (NEMSF).  Commercial Agriculture Credit Scheme. Real Sector Support Facility (RSSF). SME Credit Guarantee Scheme (SMECGS). SME Re-structuring and Refinancing Fund (SMERRF). Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL). Non-oil Export Stimulation Facility; Youth Innovative Entrepreneurship Development Programme (YIEDP). Export Credit Rediscounting and Refinancing Facility. There are in fact many more! As if each passing day and hence the ensuing challenge must come with a matching initiative, our CBN has over time grown to become a jack of all trades and – who knows- master of none or all!

And all of these supposedly in a financial market environment that is said to have come of age!

However, say what you may of each or any of them, not only are they well-meaning, they were conceived with specific purposes in mind. Never mind their fancy appellations which sometimes leaves one wondering whether the programmes were christened at some party headquarters, they have somehow managed to fill the void created by what is increasingly proving to be the absentee government! And as far as taking territories go, the apex bank, via the initiatives, has moved from being a passive banker to being an active promoter of the public good!

Still think the CBN is taking on too many tasks for its own good? That itself is open to debate. Or think the interventions are irrelevant? Think of the alternative given the lack-lustre economic management team that superintendent over the economy in the Buhari administration’s first term; imagine how pretty little has changed in the depth of the thinking in terms of the things that truly matter to the ordinary Nigerian even in the current term. In all, think of the snail-paced delivery in the context of the mounting problems of development.

Governance, surely cannot be merely about moaning and whining about problems, about what could have been but moving gingerly to solve them.

I don’t know where the original idea came from; it seems to me that Emefiele’s CBN has again stolen the thunder with its proposed $39 billion (N15 trillion) InfraCo fund, said to be a world-class infrastructure development vehicle, focused on Nigeria, to be managed by an independent infrastructure fund manager.

This newspaper reports that the fund, expected to take off in a year’s time, will support the federal government in building the transport infrastructure required to move agriculture products to processors, raw materials to factories, and finished goods to markets. In a country said to require investment of between $33 billion to $35 billion yearly over the next five years to close its infrastructure gap, it’s certainly a worthy step in the long journey to turn the infrastructure tide.

Don’t ask me whose business it is to “harness domestic and external resources to finance projects and ventures that may otherwise not be possible or profitable for the private sector to undertake…. or to channel state resources into projects and programmes that make the greatest contribution towards the realisation of long-term growth and development objectives….”

What I do know is that nature abhors vacuum. Indeed, to expect the CBN not to mount the driver’s seat when the federal executive council would rather play the coy mistress in the face of national stasis would ordinarily seem a dumb thing to do!

In any case, as they say in my village, it doesn’t matter who, between a man and woman, gets to kill a dangerous snake, what matters is that the snake gets killed in the end.

Even that itself raises the legitimate question of the legal basis of the CBN’s many interventions.

To be sure, I have no problems with the ‘independence’ of the apex bank when matters of monetary policy management is concerned. Indeed, they are not expected to be subject to any supervening authority in those areas. Or when some banks, for some reason or the other, require massive financial support to stay afloat. However, much as those spheres of independence are not open to debate, far less settled is the situation in which an unelected banker to the government, could with the stroke of the pen, cause billions of naira to be spent from its vaults to address issues outside of the scope of monetary system management.

To be sure, neither the president nor the governors are invested with powers to spend without authorisation; such powers being vested in the parliament and executed through the instrument of the appropriation law. Neither should apex bank governors be allowed such awesome powers without some form of institutional control. Not even the spectre of abdication can justify such routine exhibition of power without control!

 

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