NESG knocks CBN’s lack of transparency in forex, intervention fund disbursements
By Oludare Mayowa
The Nigerian Economic Summit Group (NESG) has expressed its reservations on what it described as the lack of transparency in the Central Bank of Nigeria’s (CBN) management of the nation’s foreign exchange resources allocations and intervention funds.
The group in its position paper to the federal government signed by its chairman, Asue Ighodalo and chief executive officer, Laoye Jaiyeola, said that while the group noted the evolving developmental roles of central banks around
the world especially as it concerns resource allocations.
“The Group expresses serious concerns about how the Central Bank of Nigeria (CBN) has carried on the business of foreign exchange transactions, loan disbursements (intervention funds) and price fixings without appropriate policy clarity.
“This can be subject to abuses, manipulations and significant market disruptions, reflective of a policy akin to crony capitalism. We therefore respectfully request the appropriate authorities to properly review this policy to restore credibility into our financial sector,” the NESG said in the statement.
The NESG also expressed concerns about certain provisions of the ‘repealed and re-enacted’ Bank and Other Financial Institutions Act 2020; recently passed by the National Assembly, and in the process of being transmitted to the President for assent.
The group said the Bill contains certain provisions that breach the provisions of the country’s constitution and confers immunity on CBN officials and exempts actions by the regulatory bank from judicial review.
“These are draconian, totalitarian and inimical to the development of a stable and transparently regulated financial sector.
“We respectfully request that the President should please withhold his assent until the Bill is properly reviewed, amended and is made fit for purpose.
“We also most respectfully request that our legislative houses should subject all Bills, in particular, such crucial bills, to the most efficient scrutiny necessary to assure compliance with the Nigerian Constitution, transparency, good governance and the best interest of the people of Nigeria,” NESG said in its position paper.
“The NESG observes with concern some distortions in the liquidity and interest rate management of our financial system which has resulted in rate distortions causing grave disadvantage to domestic investors and pensioners.
READ THIS ALSO: Nigeria’s Manufacturing Firms Groan As CBN Fx Measures Bite Hard
“This will occasion major disincentives to savings and investments and thereby, be a disadvantage to Nigerian pensioners and long term savers.
“This is inimical to this administration’s concern for the elderly, the weak, the infirmed and those who had served this country meritoriously in their prime,” Ighodalo and Jaiyeola said in the paper.
According to the group, the country needs to mobilise domestic savings and investments even as it seeks to attract foreign investment, noting that Nigeria should be careful not to initiate policies that appear to discriminate against or discourage domestic savings and investors.
“Policies making average Nigerians poorer by the day should not be encouraged,” NESG said.
The Group, however, urged the federal government to put in place proper policies, processes and procedures that will ensure the effective and conclusively implementation of its reforms in the downstream petroleum and power sectors of the economy.
It said that the government should also highlight the benefits derivable from the reforms to enable all stakeholders to appreciate the essence of its actions.
“The NESG commends government’s actions at deregulating fuel and electricity prices and urge that proper policies, processes and procedures be put in place, to ensure that all the reforms (beyond price deregulation) necessary to facilitate the smooth functioning of both the fuel and electricity markets are effectively and conclusively implemented.”#GFD