CBN Monetary Policy Committee: Beyond a pedestrian focus on personalities!


 Tuesday, 29 October 2013 17.30 PM / The Analyst

The Monetary Policy Committee of the CBN was reconstituted following passage of the new Central Bank of Nigeria Act 2007 into law by the National Assembly.  The committee is currently composed of 12 members with the CBN Governor serving as its Chairman.

Their appointment and tenure of office is subject to the same terms as stipulated for a Director in the CBN Board which states that they can hold office for four years and shall be eligible for re-appointment for another term of four years.

According to the Act, the MPC shall consist of:

(a) The Governor of the Bank who shall be the Chairman;

(b) The four Deputy Governors of the Bank;

(c) Two members of the Board of Directors of the Bank;

(d) Three members appointed by the President; and

(e) Two members appointed by the Governor.

The current members of the CBN Monetary Policy Committee are

The Central Bank of Nigeria’s Monetary Policy Committee is expected to hold its last meeting this year 2013 on 18th and 19th November 2013. The committee, which had met five times earlier in the year, had maintained the MPR at 12% in all its previous meetings this year. Under normal circumstances, the first meeting of the MPC next year should hold in January 2014.

Given that the tenure of the five (5) independent board members (8-12 above) will expire this year, it is curious that, to date, no announcement has been made on the composition of members , especially when one considers that such appointments by the Presidency are subject to confirmation by the National Assembly.

It is important to avoid creating a vacuum in monetary policy making.

Instructively, the CBN Governor, Mallam Lamido Sanusi Lamido has affirmed his intention not to stay in office for a second term after the expiration of his term in June 2014 – a subject for which Proshare/BusinessWorld and a team of seasoned economists/analysts have initiated an ‘aide memoire’ to serve as a guide beyond the usual and ‘pedestrian’ approach employed by commentators.

While it is arguable that the tenure of the Independent members of the MPC should be renewed, it is important to note that the future of the new Central Bank of Nigeria and its Monetary Policy Committee will continue to attract interest from stakeholders. In this light, it is imperative that the process be managed properly and promptly to avoid the uncertainty which an inadequate management of change represents to the markets and economy.

Less helpful is the current speculative business being undertaken by some foreign and local newspapers on who becomes the next CBN governor - an endeavour that delivers nothing in terms of empirical evidence nor presents insights that reflects the significance of the decision. Indeed their efforts focuses primarily on the elevation of personalities above role responsibility and beyond the excitement it provides, does little to establish the nexus between the job requirement and the person specification. We can do without such invitation to celebrity journalism on a serious matter as choosing who becomes the CBN Governor of the Federal Republic of Nigeria.

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