Nigeria’s Central Bank set to replace its external MPC members ahead Feb meeting

Nigeria’s central bank plans to replace the external members of its monetary policy committee, who say they’ve been sidelined ahead of a meeting next month, amid an ongoing shakeup of the institution.

Four of the five external members of the 12-seat MPC, who spoke to Bloomberg on the condition of anonymity, said they have not been paid since August, last heard from the central bank in September and have been excluded from the usual planning ahead of the Feb. 26-27 gathering. The fifth member did not respond to requests for comment.

A central bank spokeswoman said the appointment of new independent MPC members was in the pipeline, but gave no further details.
The monetary authority is crucial to President Bola Tinubu’s efforts to boost growth and attract foreign investment to Nigeria’s lethargic economy. Soon after taking office in May, he suspended the bank’s then-governor Godwin Emefiele, who was arrested weeks later on charges including fraud. Emefiele denies wrongdoing and his trial is ongoing.

Tinubu then installed new leadership under ex-Citibank executive Olayemi Cardoso, who has pledged a return to orthodox central banking with a focus on tackling inflation and stabilizing the country’s free-falling naira currency.

Read also: CBN to gradually clear all FX obligations from FG, NNPC intervention — Report

“We are committed to rebuilding an institution that is trusted and respected and promoting confidence in the economy,” Cardoso said on Wednesday.

The MPC consists of the governor, four deputies and two bank directors, plus five outsiders appointed by the president and the governor. The current five external members were picked by former head of state Muhammadu Buhari, and Emefiele.
The MPC needs six of the 12 to be present to constitute a quorum, so there’s no risk that next month’s meeting won’t be properly constituted, even if new external members have not been named by then.

The current external members who spoke to Blomberg said that they’ve not been invited to the meeting and don’t anticipate being there.

Economists expect Cardoso to raise interest rates sharply in what will be the first gathering of the MPC since July, when it lifted the policy benchmark to 18.75%. Inflation has subsequently surged and stood near a three-decade high of 28.9% in December.

But if no external members of the committee are present, it will leave question marks over the policy process.

“Holding February’s MPC meeting without any independent member would likely raise questions concerning the credibility of the decision,” said Omobola Adu, an economist at BancTrust & Co. “Having external members reduces the bias that the central bank can be influenced by internal or political pressures.”