The Senate on Tuesday threw its weight behind the Central Bank of Nigeria, CBN, in light of the controversy that has trailed the apex bank’s policies to halt the crashing value of the naira as well as stabilize the economy.
The vote of confidence passed on the CBN was sequel to the appearance of its Governor, Godwin Emefiele, before the Senate as a whole to explain the alarming weakening of the naira against the US dollar.
Although the session with the senators was a closed-door affair, those privy to what was discussed said Mr. Emefiele told the Senate that the CBN will not go back on restrictions placed on Bureaux de Change (BDCs) as he described them as waging a relentless war on the Naira. He said that the activities of operators of BDCs were mainly responsible for the dwindling value of the Naira as they embark on rent seeking speculation of the local currency.
Briefing the media after the closed-door meeting with the CBN Governor, Chairman of the Senate Committee on Information, Aliyu Sabi Abdullahi, said that Emefiele gave a comprehensive account of the performance of the economy in the last one year.
He said: “Emefiele’s presentation began with the current global economic conditions, which have been characterised by external shocks, including the sharp decline in commodity prices, the geographical tensions along important global trading routes and tightening of monetary policy in the United States.
“He drew linkages of these occurrences with the Nigerian economy, especially with respect to the over 70 percent decline in oil prices from about $116 per barrel in June 2014 to about $30 per barrel currently. The governor’s presentation also gave us an insight into the bank’s analysis and understanding of the situation, and therefore, the rationale underlying the countervailing policy actions it has taken over the last couple of months”.
The Senate spokesman also said the lawmakers raised questions bordering on the health of the banking system, stoppage of sale of foreign exchange to BDCs and rise in inflation. They were also said to have discussed the fall in foreign exchange reserves, exclusion of some items from access to foreign exchange, and policy coordination between fiscal and monetary authorities.
“Following an exhaustive response by the Governor and his team, the Senate acknowledged that these are indeed difficult times all over the world and not just in Nigeria. The Senate also acknowledged the pains that many people may be facing at this time, especially in light of shortages of foreign exchange for legitimate business.
“But having carefully considered the policies of the CBN, the Senate would like to commend and support these policies because they are mostly geared towards increasing local production, creating jobs, safeguarding our commonwealth and expanding economic opportunities and growth in Nigeria”, Senator Abdullahi said.
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