Tunde Bakare’s synopsis of the Central Bank

Pastor Tunde Bakare

By Boniface Chizea

I took my time to go through the so called State of the Nation Address released by Pastor Tunde Bakare; the General Overseer of the Latter Rain Assembly and could not but wonder what agenda he was pursuing in some of the far reaching statements he made particularly regarding the role of the Central Bank which in his opinion had contributed negatively in more ways than one to the travails of the economy.

It is imperative that his views should not be dismissed with the wave of the hand. I do not have issues with those who have dedicated their lives to work in the vineyard of the Lord lending their voices to the voiceless and the downtrodden by drawing attention of those in government to be more responsive and accountable to address their plight.

This is the practice almost everywhere. Such interventions are clearly in keeping with the clear injunction of our Lord Jesus Christ when he declared that what so ever you do to the least of your brothers you do unto me (Matt. 25.40). And the Clergy in Nigeria in my opinion had not been remiss in keeping fidelity to this injunction.

But when a man of God goes beyond this injunction to begin to dabble into technical issues as in this case he has in my considered opinion breached the divide and thereby exposes himself to all manner of accusations. This is why advisedly the Catholic faith, which I share, does not allow the Clergy to go into politics. They are encouraged to concentrate their energy and time in evangelization to continue to spread the word of God thereby winning more souls.

Godwin Emefiele just happened today to be by Divine Providence the Governor of the Central Bank. Yes he provides leadership but he cannot personify the Bank. The Central Bank is a robust and well-founded Institution with a collective of expertise for the management of the economy such as it is not possible to find in any other institution in this country.

For instance, two of the Deputy Governors we are quite familiar with rose through the ranks of the Central Bank; Dr. Sarah Alade and Dr. Joe Nnanna respectively as Directors with the monetary policy Department and Research Department respectively. And even Suleiman Barau the other deputy governor first joined the Central Bank as an adviser to Governor Soludo before his ascension to Executive Management.

They are all well aware and verse regarding the core mandate of the Central Bank to maintain price and exchange rate stability and therefore no one should be presumptuous to think that they will be teaching them anything they do not already know. No doubt they are open to views objectively canvassed but the fact remains that no other authority in the economy has the sort of information or overview of the economy, which they have and we should learn to give them the benefit of doubt.

The problem confronting this economy is well known to everyone and must not be wrongfully ascribed as due to lack of expertise on the part of anybody as some compatriots would want us to believe. The fact that the Nigerian economy suffers vulnerability and is exposed to shocks in its overly dependence on income from the oil sector is well advertised.

The price of oil fell from a high of US$ 116 per barrel in June, 2014 to $33 per barrel in January, 2016 representing a decline of over 70 per cent and available data indicated that when prices were high the CBN got about $3.2 billion inflow monthly to the current situation when the Bank receives less than $ 1 billion every month yet at the same time the export bill increased from N 148 billion in 2005 to the current level of N 920 billion! And this in a nutshell captures the dilemma of the Central Bank as it grapples with the challenge of controlling the rate of exchange as the reserves deplete without the immediate prospects of any accretion which had necessitated all the controls almost everyone is now complaining about.

Tunde Bakare accused the Central Bank of worsening the subsidy situation, accused it of irregularities with its Forex policies, its wrongful management of the liquidity (currency in circulation) and for manipulating the 2007 CBN Act as it removed all the controls in the 1999 Act which regulated its powers regarding the management of liquidity in the economy.

And you cannot but wonder how somebody with at best basic appreciation of the mandate and operations of the Central Bank could make such a statement including that the Governor of the Central Bank in saner climes should have by now been cooling off in retirement because the Bank acted on a mandate from the President. He thoroughly went overboard and in my opinion breached the boundary, which acknowledged men of God should respect.

The Governor of the Central Bank is vulnerable in the thinking of some people because he was not appointed by the current government forgetting the memorable quotable statement by this President to the effect that; ‘ he belongs to everyone and belongs to no one.’ And as should be clear to all, this President has his mind and there are some controversies we are well advised to avoid getting into in this era of cry of marginalization and lack of inclusiveness that has bred some of the recent agitations we have experienced. And also we must not forget that the International community is an interested stakeholder with particular interest on such matters and we should be wary of their perception.

Pastor Bakare claims that adequate management of the exchange rate would remove the need for subsidy! It is difficult to underpin the logic here particularly in the context of what we all know now about the scam infested subsidy payment. If anything, the current posture of the Central Bank in its refusal to allow the Naira to go into a free fall as ‘economist’ recommends that market forces should be allowed to determine the rate could have worsened and exacerbated the subsidy payment situation.

He accuses the CBN for being a conduit for politicians because the Central Bank acted on the mandate from fiscal authorities to release funds. The CBN is Banker to the Government and just as in our relationships with our respective banks we should ask ourselves if our banks could refuse to honour our cheques when properly drawn and our account is funded? And in this case, you are talking of an unequal relationship.

Will President Buhari today ask the Central Bank to release money and the Bank flouts that instruction! He castigates the CBN of the perpetration of corruption in 2007 Review of the CBN Act, which to all intents and purposes simply updated the 1999 Act as it appropriates to its self the sole responsibility of determining when to reorder the printing of currency notes.

The CBN has a model of the economy, which determines optimal liquidity based on the level of productivity and that is consistent with the perceived need for the maintenance of price stability. And the determination of the level of currency in circulation is therefore a technical issue, which is intelligible only to the initiated and so it is difficult to conceptualize how the responsibility to determine the optimal level of liquidity in the economy could be domiciled elsewhere. These are really technical matters, which a pastor has no business championing the way forward!

• Dr. Chizea wrote from Lagos. [The article first appeared on The Guardian]