Finance Minister, Kemi Adeosun, set off the alarm bells last week when she canvassed stripping the Central Bank of Nigeria of some of its powers. Her call was doubly troubling since she made her pitch directly to federal lawmakers whom she wants to amend the law to allow greater executive oversight over the bank. It is essential, however, that the CBN retains its autonomy and everything should be done to insulate it from political interference.
Viewed from current trends in the national and global economies, Adeosun’s call is retrogressive: turbulence in global markets since the successive financial crises of the 1990s and 2007-10 has driven home the wisdom of autonomous central banks to stave off panicky measures by politicians with an eye on the next elections. In Nigeria, we have seen the propensity of some heads of governments to treat the public treasury as their personal property and the CBN as an ATM stall. A survey by the financial blog, Mostly Economics, found that, over the last three decades, a majority of the world’s most successful economies have granted their central banks greater leeway to conduct monetary policy free from interference from fiscal and political authorities.