Kemi Adeosun has just gone after Godwin Emefiele in public. It's the last thing the Nigerian market needs.
It's not often you get to see that around here.
“I want to correct the impression that the CBN is under us. They are not. Unfortunately, a law was passed, making them independent and giving them more powers. This has resulted in one person having so much power", Adeosun said.
“In the time of Prof. Charles Soludo as CBN Governor, he went to the National Assembly asking for more powers and you can see where that has taken us to. So we are back to the legislature to help us correct this problem of too much power. As a result, there are no checks and balances,” she decried.
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Adeosun and Emefiele have had disagreements over monetary policy in the past.
Last year, Adeosun called for the reduction in lending or interest rates.
Emefiele disagreed and has maintained the CBN's Monetary Policy Rates (MPR) and financial instruments since Nigeria slipped into a biting recession; much to the chagrin of the finance minister.
Adeosun thinks that the non-convergence of the nation's monetary and fiscal policies is why the Nigerian economy is still mired in a rut.
The Guardian reports the latest rift between Adeosun and Emefiele this way:
"The Minister of Finance, Mrs. Kemi Adeosun, yesterday asked for the reduction of the powers of the Governor of the Central Bank of Nigeria (CBN). She blamed the extensive powers of the Governors for the disconnect between Federal Government’s monetary and fiscal policies. She pleaded with the National Assembly that conferred the powers on the CBN boss, through a legal instrument, to slash them to pave the way for checks and balances".
Adeosun is wrong for demanding that the CBN operates from under her ministry and by extension, from under the executive.
Her demand is certainly an overreach; a show of unnecessary power.
The CBN is statutorily independent and that's the way central banks are set up across the world.
Not to do so will mean opening up the apex bank to all kinds of political influence and interference.
The CBN is tasked with monetary matters like keeping down inflation and maintaining the exchange rate.
Adeosun's ministry is charged with how monies are disbursed and utilised round the country in a fiscal calendar; in keeping with the agenda of government.
Adeosun and Emefiele should be singing from the same hymn sheet to stabilise a faltering economy.
To watch them have a go at the other and call for the powers of the other to be cut down, is embarrassing.
Adeosun should stick with her role and let the legislature or the President who appoints the CBN Governor, worry about the powers of Emefiele or anyone after him.
The last thing an unstable market needs right now is a squabble between the fiscal and monetary authorities.
Investor confidence is also likely to be dampened in the light of Adeosun's latest comments.
Adeosun should find a way of discussing some of her monetary policy suggestions or worries with Emefiele behind closed doors.
Certainly, dialogue is the best solution in the circumstances.
For the good of our country and economy, our monetary and fiscal authorities should unite behind the common agenda of getting Nigeria out of a self-inflicted recession.
We can't afford to have it any other way.