MPC Meeting: CBN, Stakeholders Upbeat As Senate Backtracks On Nominees’ Confirmation

• April date now likely       

BY CHINYERE OBIORA, LAGOS – The Nigerian Senate’s decision mandating its Committee on Banking and Finance to screen for confirmation presidential nominees as Deputy Governors and members of the Monetary Policy Committee (MPC), Central Bank of Nigeria (CBN) is already generating excitement in the financial sector.

This is even as strong signals have emerged that the March 19 – 20, 2018 MPC meeting may now hold in April given that the Senate confirmation process and transmission of names to the Presidency may not be completed before the month end   

However, some financial experts are happy that the upper legislative chamber’s reversal of its hard stand on the President’s nominations has doused anxiety among stakeholders that the March MPC meeting may again be thwarted due to lack of quorum.

They described the development as great news for the country’s monetary policy regime, noting that investors’ confidence in the economy could be at serious risk if there is a repeat of the January failed meeting.  

After the botched January meeting, worried financial system operators were however in agreement that the development would not impact negatively on the economy. 

But on Wednesday, March 14, 2018, the Senate President, Dr Bukola Saraki gave the red Chamber’s Banking and Finance Committee one week to consider the confirmation of Mrs Aisha Ahmad and Mr Edward Adamu as Deputy Governors of the apex Bank.

Similarly lined up for affirmation are Professor Adeola Adenikinju, Dr Asheikh Maidugu, Dr Robert Asogwa and Dr Aliyu Sanusi as MPC members.

The Senate Leader, Senator Ahmed Lawan, who moved for adoption of the request, said the process was in accordance with the provisions of Section 12 (1)(4) of the CBN Act 2007.

Sources close to the Senate Committee and the apex bank hinted that  the seeming hurry in the Senate action is meant to speed up the confirmation process in time for the next MPC to take place before March ending.

A financial analyst, Mr Bola Adekola said though the Senate is now doing the needful, the new members would still need to settle down before undertaking their respective responsibilities.

He described the Senate adoption of communication to confirm the CBN and MPC appointees as quite apt given that all hands must be on deck to engender growth and productive developments in the economy.

For the Chief Executive Officer, APT Securities and Fund Limited, Malam Garba Kurfi, though the economy has continued to improve, another disruption of the MPC meeting should not be contemplated.

He said despite CBN’s inherent powers to take some decision outside the MPC meeting, it is important to applaud the Senate moves to do what is right by confirming the nominees. 

Also, the Managing Director of Afrinvest, Ayodeji Ebo said even investors would be happy that the MPC will hold this month to stabilize existing rates for continuity in their investment.

In the heat of the Presidency and National Assembly face-off, the CBN had on January 22, 2018 informed the general public and relevant stakeholders that the first MPC meeting of the year, earlier scheduled for 22 -23 January 2018, will not hold due to its inability to form a quorum as stipulated in the CBN Act 2007. 

A statement personally signed by the CBN Governor, Godwin Emefiele stated thus: “Despite this development, we are pleased that key economic indicators continue to move in the right direction. With modest recovery in oil prices and boost in domestic production, we exited the recession in 2017, while inflation has continued its decline and is now at 15.37 percent for December 2017. Our Foreign Exchange Reserves have grown from about US$23 billion in October 2016 to US$40.78 billion at the close of business on 18 January 2018.”

Emefiele, who pledged the CBN’s management resolve to sustain visible gains, continue its vigilance and pro-activity to ensure macroeconomic stability through 2018, said; “Under these circumstances, and in the absence of a meeting of the MPC, the CBN shall continue to maintain key monetary policy variables as: MPR at 14.0 percent; CRR at 22.5 percent; Liquidity Ratio at 30.0 percent; and The assymetric corridor at +200 and -500 basis points around the MPR.”