Bismarck Rewane, CEO of the Financial Directive Company and economic adviser to former President Muhammadu Buhari, has called for the need to reform the institutions of government in Nigeria.
His advice comes in the wake of some key monetary policy changes taken by President Bola Tinubu to not only reform the sector but also help him accomplish his macroeconomic objectives for the country.
Tinubu, on the assumption of office as President, made some critical policy changes, which include the removal of Godwin Emefiele as CBN governor, the collapse of the fixed exchange rate system to let the Naira float freely, the removal of the Economic and Financial Crimes Commission (EFCC) chairman, Abdulrasheed Bawa, the removal of fuel subsidy and the introduction of student loans.
Speaking on Arise Television’s Global Business Report on Thursday, Rewane insisted on driving more institutional reforms than just making policy statements. He noted that creating strong institutions would help ensure the system work effectively and efficiently and also act as a check on the excesses of monetary policy leaders or leaders in general.
“The institution must change so that even if the man that is there is a bad man or a great man, he will not be able to do those temporary bouts of insanity,” Rewane said of the president’s removal of Godwin Emefiele as governor of the Central Bank of Nigeria.
“It is institutional reform that makes it impossible for impunity to take place.”
Earlier in the interview, Rewane, unexcited about some of the policy statements of the president, asked the federal government to direct its energies on structural changes, as he believes that it holds the keys to driving economic growth and development.
“If you don’t reform the institutions, even if you brought the pope to become the head of Nigeria’s monetary policies or the central bank, it won’t take long before it becomes married to the natives,” he said.
“And so you can have the same outcome.”
When quizzed further about his opinion on the removal of the Central Bank of Nigeria governor, the Economist agreed and supported the president’s housing cleansing move. A promise the president made on his swearing-in day.
“True, that is house cleaning,” he said.
He, however, pointed out that the institutional weakness in the system made it possible for suspended CBN governor Godwin Emefiele to carry out some of his unorthodox monetary policies without some much-needed checks and balances.
On the floating of the naira, the economist explained that it is a welcome development and that in the short run, “the most efficient hands are the hands that will push the market into equilibrium.”
Since the floating of the naira, the Nigerian currency has traded at N664/$ at the I&E window.
He said, “First, the announcement is one thing; fiscal adjustments are another. But fundamentally, when you begin to accept that things are no longer the way they are, Nigerians will have to accept.”
On the removal of fuel subsidy and the impact it has had on Nigerians, he admitted that the majority of Nigerians were finding it hard to adjust to the new reality but, with time, would come to appreciate the gains in it.