Kingsley Moghalu, former deputy governor of the Central Bank of Nigeria, agreed with Godwin Emefiele, the governor of the CBN, over his assertion that he doesn’t have to consult with Ahmed Zainab, the minister of finance, on his decision to redesign the naira.
The banker turned politician made his opinion known during an interview on Channels TV Sunday Politics.
Moghalu was responding to questions about the legality of the CBN governor’s decision to not consult or pre-inform the minister about such an important decision such as the redesign of the Nigerian currency—the naira.
He believed that there has been a lot of misunderstanding in the public space as regarding the decision of Emefiele to ignore the Ministry of Finance. He said that the decree promulgated by ex-President Ibrahim Babaginda in 1991, separated the CBN from the Ministry of Finance thereby giving it the total independence to operate as an apex bank.
Moghalu said: “The first thing I would say in response to this question is that I am very surprised that the minister of finance made this comment publicly. If she felt she did not know about this, I am sure there were channels she could have ventilated whatever frustration she may have had. But I have already made it clear that the proper channels were followed by the Central Bank.
“The ministry of finance used to supervise the Central Bank in the seventies and eighties, but that arrangement did not work because it interfered with the performance of the Central Bank because the bank can’t perform well if it is not independent given the nature of central bank functions.
“In 1991, President Ibrahim Babaginda decided that this situation was not working and he issued a decree decoupling the CBN from the Ministry of Finance in terms of reporting channel and directing the Central Bank to report directly to the president. This has been so for over thirty years in this country.
“Now, in terms of the relationship between the Central Bank and the Ministry of Finance—of course it is a closed relationship. I have explained to you that the permanent secretary of the ministry of finance is a member of the board of the CBN.
“This is an institutionalised channel of consultation and exchange of views. So I don’t think it does not exist. When I was deputy governor of the Central Bank, Ngozi Okojo-Iweala was minister of finance for most of that period—I was there for five years and she was there for three of those five years as a minister. She would always tell her colleagues that the Central Bank is independent and she does not want to interfere.”
Moghalu argued that during his time as deputy governor, there was synergy and less conflict between the bank and the ministry of finance because both bodies respected their independence.
He said: “I was attempting to say that we had a lot of consultations with the Minister of Finance at the time, Ngozi Okonjo-Iweala, because she was a very experienced, very exposed, and intellectually robust person who understood why the Central Bank should be independent and had no ego issues, so there were a lot of consultations.
“For example, when President Jonathan was setting up the economic management team, it was done in two phrases; one was the economic management team under the president himself, which included the minister of finance, the governor of the bank—Sanusi, and myself as a nominee of Sanusi. She asked the governor, “Do you want to nominate anyone else apart from yourself?” Sanusi nominated me. So he and I represented the Central Bank in the economic team, but that is because that team was headed by the president. I want to be clear with what I’m saying.
“There was another level—the economic management team, which was headed by the minister of finance and the minister of the economy. Remember, she had two titles—the coordinating minister of the economy and finance. As deputy governor, I represented the Central Bank because the Central Bank governor cannot subject himself to the supervision of the finance minister. He could subject himself to a team headed by the president but not the finance minister. So I want you to understand that many of us don’t know these things, and people opine about things of which they have no knowledge.”
