By Odunewu Segun
A former deputy governor of the Central Bank of Nigeria and presidential hopeful, Kingsley Moghalu, says the apex bank has lost its independence, and has become an errand institution for the federal government.
Moghalu, a professor of Practice in International Business and Public Policy at the Fletcher School of law and Diplomacy at Tufts University disclosed this during an exclusive interview with National Daily on Tuesday.
He said the Central Bank of Nigeria during his time as the deputy governor for financial stability enjoyed immunity from interference by the federal government which enabled the team back then to bring stability to the banking industry.
“Under Sanusi, the CBN was able to bring inflation down and has a conceptual approach to microeconomic management. We did that because we took very strong action when the inflation began to rise to the level we were uncomfortable with. So we instituted a tight management, but later on inflation again began to gallop away, but you know inflation in Nigeria has become a bit structured and it is difficult and it is necessary to control inflation.”
He also knocked down the multiple forex exchange rates of the CBN, saying the policy will only encourage more corruption in the system, adding that the policy has been compromised by people with vested interest.
“We cannot fix the artificial value of the naira, now there are multiple exchange rates operating in the central bank today that is again very, very bad in economic management, it is harmful to the economy because it means for political reasons there are a lot of wasteful subsidies going on. We are running a “fake type of economy,” for political reasons but that is not how country that is serious develops.”
He said now the value of the naira has become a false measure of whether Nigeria is doing well economically or not, adding that the real measure of whether Nigeria is doing well or not fundamentally is whether or not the economy is productive.”
“Here we don’t have a productive economy but we want the naira to remain strong. Politically it is popular to have a strong naira but there is no productivity fundamentally to sustain that strength.”
“So what is happening is that the Central Bank is keeping the foreign exchange market on steroids, constantly pumping dollars in order to maintain a false value of the naira so that people can feel that the naira is stable or strong. But the question is what the real value of the naira is and it is the productivity of the economy that should determine that not how much dollar that the CBN pumps into the foreign exchange market every week.”
The political economist and lawyer said if elected as President of Nigeria, he will restore the independence of the CBN and other agencies for them to perform optimally.