A legal consultant and managing partner of Difigland Partners, Prince Anthony Olatujoye, strongly criticized the
proposed bill for an act to amend the Central Bank of Nigeria Act of 2007, saying the proposed amendment “is incongruous with international best practices.”
In a memorandum presented before the Joint Senate Committee on Banking, Insurance and other financial institution, judiciary, human rights and legal matters, Olatujoye pointed out that to achieve a sound economy and for the realization of its core mandate, a Central Bank needs financial autonomy, free from the regular processes attendant on the fiscal system.
Olatujoye, former legal adviser with Central Bank of Nigeria explained further in his presentation that it is essentially on account of the gains or advantages of such Central Bank’s independence on the economics of countries of the world that the European Union (EU) articulated policies regarding the independent operations of the central banks of the states making up the Union.
“The treaty on European Union (Maastricht Treaty) requires an independent central bank as a pre-condition for the membership of a state in the Economic and Monetary Union (EMU),” he said.
Under the arrangement, he explained further, “neither the ECB nor the national central banks, nor any member of their decision-making bodies, are allowed to seek or take instructions from EU institutions or bodies, or from any government of an EU member state or from any other body.”
Olatujoye agreed further on the strength of his extensive research findings that almost all countries of the world today (save for a few) operate independent central banks, in line with global best practices, which is necessary to stabilize the economics of these countries and indeed the international financial system.
“It is not so difficult,” he pointed out, to see that section 6(3) (a) of the CBN Act, 2007, as currently formulated was modeled after trends in the international financial system and in the overall interest of the Nigerian economy”.
“It is salient to point out that financial or budgetary autonomy, which is being enjoyed by the CBN now and inline with global best practices, does not obliterate the over-sight functions of the National Assembly. If anything, it strengthens this all important role of the National Assembly. The provision of section 50(1) of the principal Act buttresses this point”.
In his recommendation, Olatujoye also a legal consultant to the Central Bank of Nigeria posited that section 6(3) (a) and 50 of the CBN Act, 2007 which are now being sought to be amended by the National Assembly, do not need such amendment, as any amendment on the autonomy of the bank on the Act should draw the country closer to the global best practices rather than deviate from such international standards.