CBN says seed of current economic crisis planted by past public office holders
The presidency has faulted allegations
made by former CBN Governor, and Emir of Kano, Mallam Muhammad Sanusi
II, on the state of the economy, maintaining that the former apex bank
boss did not get his facts right.
Sanusi had at a policy dialogue
organised by the Savannah Centre for Diplomacy, Democracy and
Development (SCDDD), criticized President Muhammadu Buhari
administration for relying on massive fiscal expansion and a faulty
foreign exchange policy that discourages investment to get the country
out of the current recession.
The former CBN governor, who delivered a
keynote address titled, “A Plan to Restore Confidence, Direction and
Growth”, had frowned on a development whereby the CBN had become
government’s lender of “first” resort rather than last, accusing the
apex bank of a clear violation of CBN Act of 2007 (Section 38.2) which
limits advances to the federal government at 5 per cent of the previous
year’s revenues.
Sanusi had put the CBN total loan,
overdraft to government at N4.7trn adding that the current CBN overdraft
to federal government was more than 10 times the prescribed limit and
even rising further.
A statement by the Senior Special
Assistant to the President on Media and Publicity, Mr Garba Shehu,
yesterday agreed that the government had overdrawn its account but
disputed the figures put forward by Sanusi.
The statement issued by the presidency
reads: “With every respect to the Emir, you know he is my ruler, because
I come from Kano.
“He doesn’t have his facts as far as those issues are concerned. The issue in CBN, that government has overdrawn its Central Consolidated Account is true, but the overdrawing is within limits.
“He doesn’t have his facts as far as those issues are concerned. The issue in CBN, that government has overdrawn its Central Consolidated Account is true, but the overdrawing is within limits.
“The overdraw does not exceed 1.5 trillion. It is incorrect to say, as he did that the account was overdrawn by 4.5 trillion.
“But even assuming that he was correct.
This is a government that has money in excess of the amount he mentioned
in the Treasury Single Account, TSA. It is just like you, a bank
customer operating two accounts, one in the red and the other, well
funded to the point that it can at any time wipe the indebtedness on the
other. Would any bank manager lose his sleep over this?
“This, I am told is what the IMF found at the CBN and they said it is perfectly normal.
“As for his opposition to the USD 30 billion loan, I am aware that the Minister of Finance is responding to that.
“As for his opposition to the USD 30 billion loan, I am aware that the Minister of Finance is responding to that.
“As a private citizen, I want to read
his statement again. I thought that the borrowing is for projects that
include the railway and electricity development in the country.”
Also reacting to Sanusi’s critique of the economy, CBN said the current economic managers were not the architects of the current economic crisis.
Also reacting to Sanusi’s critique of the economy, CBN said the current economic managers were not the architects of the current economic crisis.
Rather, CBN argued that the current
economic crisis was caused by the failure of past public officers, who
had the power and opportunity to set the economy on the path of
greatness but failed to do so.
CBN Acting Director, Corporate
Communications, Isaac Okoroafor, said, “We should not forget that the
seed of our current economic crisis was planted by the failure of those
who occupied public office in the past but failed to act in the long
term interest of the Nigerian economy. It is easy to criticize from
outside. It is always easier and the grass greener when people are out
of office.
“The challenge we face today is a choice
between pandering to the established interest in Nigeria’s speculative
economy and the protection of the wages of the real stakeholders who
work hard on fixed incomes; for they are the core victims of Naira
depreciation.”
The banking watchdog noted that at this
critical time when the country is deep in recession, “the CBN will
continue to explore avenues with the Federal Government in order to find
solutions to the current economic situation.”
It added that, “Already Nigerians are
waking up to the call to be more productive and to look inwards and to
be less dependent on the importation of foreign goods and services.”
In his critique of the economy, Sanusi
had said the CBN was no longer independent and that the relationship
between the apex bank and the federal government was no longer healthy.
He had also criticised the implementation of the June 2016 FX reforms by
the CBN, arguing that the creation of four new market rates would
defeat the objective to unite the market in single, transparent rate.
But reacting to the criticism, CBN said
it had “set up an inter-bank foreign exchange market where anyone who
wishes to buy foreign exchange can bid for and buy through their banks.
Or is it not true that CBN allocates dollars?
Arguing that, “there is nowhere in the
world that the Central bank sits by and allows vicious speculators to
solely distort the value of its currency endlessly,” the apex bank noted
that, “All central banks intervene to buy or sell in the market to
ensure that the local currency is protected from dubious attacks.”
The CBN urged its former governor to
explore the channels of advice and contribution of ideas, which are
open, rather than playing to the gallery by casting aspersion on its
efforts to salvage the economy and the people in leadership at this
critical time.
“The channels for advice and
contribution of ideas on the current economic situation by all patriotic
Nigerians are open. It is rather unfortunate that some people have
chosen to play to the gallery and to make statements to disparage those
in leadership at this time in total insensitivity to the larger
interests of the Nigerian economy.”
On the submission by Sanusi that the
federal government may not get creditors to grant its request to borrow
the proposed $30 billion, even if the National Assembly approves it, the
Debt Management Office (DMO) kept mute.
THISDAY’s efforts to get reaction from
DMO on the development was futile as its Director General, Dr. Abraham
Nwankwo, did not respond to enquiries. He neither picked his phone calls
nor replied text messages sent to him on the issue as at press time.
0 comments:
Post a Comment