Buhari, leave the Central Bank Alone

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Central Bank

I wrote before about the importance of Buhari respecting the power of democracy and not going beyond the power of his office. It appears Buhari didn’t read that article. Not that he is expected to, being busy with running the country and all. Since he didn’t read the article, maybe I can excuse Buhari’s clear abuse of power. Nah. Buhari, you swore to be president. Look around you, this is not 1984. Nigeria is no longer ruled by the military. The Head of State does not decide everything. We have institutions and laws for a reason. That is why Buhari needs to leave the Central Bank alone. It is not just gossip that Buhari heavily influences the Central Government. In fact, he all but runs it! His spokesperson, Garba Shehu, says that the central bank is not a sovereign entity and states that the governor of the Central Bank, Emefiele, and the president are in constant communication. A Bloomberg analyst, Mark Bohlund, reports, “It seems like Emefiele’s just left it to Buhari.” It just seems ridiculous. Here we have Emefiele, who is an alumni of the University of Nsukka, Stanford University, Harvard University and Wharton School of Business. He has also had about two decades of experience in the banking sector, rising up the ranks until he was appointed the governor of the Central Bank in 2014. Buhari doesn’t have that experience and that’s why he was voted president, not the All-Mighty Ruler of all things Nigerian. We should not condone Buhari’s attempt to control the Central Bank. And not because we don’t agree with his stance of devaluation. There are arguments for and against devaluation. Whatever the Central Bank decides to do in terms of monetary policy, they should do. Not because Buhari and his advisers have held Emefiele’s ear and told him what must be done. But because the Central Bank’s array of experts and advisers have decided its the best thing for the economy.

Buhari The Central Bank decided that the currency would not be devalued. In layman’s terms, the argument for devaluation is that it makes foreign things more expensive, forcing Nigerians to #BuyNaijaToGrowTheNaira. Our exports will become cheaper and the economy thrives. All is well. But as with everything Nigerian, it’s way more complicated than that. Nigeria is heavily dependent on imports. Nigerians might not reduce its imports because these imports are needed, and now they cost more money. Devaluing our currency will make things tougher for Nigerian producers that need foreign raw materials. Nigeria’s economy might not be in a place where it is ready for a devaluation. So that’s the basic argument for and against devaluation. Whatever Emefiele and the Central Bank decide to do should be what we go with. But Buhari should not be influencing the Central Bank. Right now, Buhari’s The Central Bank’s policies have had relatively disastrous results on the economy. Emefiele announced to reporters that a recession “which we signaled in July 2015, now appears imminent.” Inflation has risen. Nigeria suffered a negative GDP growth last quarter. The government’s monetary injections haven’t taken effect yet because the budget took too long to pass and its impact on the economy has not been felt. It’s important for the Central Bank to get a hold of the situation. And Buhari needs to stay out of it.

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