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Emefiele allays concerns over inability to hold MPC meeting

22 Jan 2018
Financial Nigeria

Summary

In the absence of the January MPC meeting, the CBN says it will maintain the decisions reached at the November 2017 meeting.

CBN Governor Godwin Emefiele

The Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, has tried to allay concerns over the inability to hold the January 2018 Monetary Policy Committee (MPC) meeting, which would have started today. In a statement he made available on Sunday, embargoed until 12:01am today, he said “key economic indicators continue to move in the right direction with modest recovery in oil prices and boost in the domestic production.”

Mr. Emefiele cited positive developments in the economy, suggesting that economic indicators were in the right direction. These include the continued decline in inflation to 15.37 per cent in December, and increase in the foreign reserves, which reached $40.78 billion as at January 18, 2018. To exemplify investors’ confidence in the economy, he said the Investors’ and Exporters’ (I&E) windows of the CBN attracted over $13 billion in the last nine months.

Earlier, the CBN had issued a statement announcing that it would not be able to hold the January 22-23, 2018 MPC meeting, due to inability to form a quorum as stipulated in the Central Bank of Nigeria Act 2007.

In the absence of the January MPC meeting, the CBN says it will maintain the decisions reached at the November 2017 meeting, which left rates unchanged, with MPR at 14.0 per cent, CRR 22.5 per cent, Liquidity Ratio 30.0 per cent, and the asymmetric corridor between +200 and -500 basis points around the MPR.

At the end of last year, the 12-member MPC became eight members short. The MPC meeting requires six members to form a quorum, according to the CBN Act.

However, a standoff between the Senate and the Presidency has stalled the confirmation of the nominees of President Muhammadu Buhari for CBN Deputy Governor and some members of the MPC. The stalemate relates to a legal question on whether nominees for agencies of the federal government not specifically mentioned as needing senate confirmation in the 1999 Constitution (as amended) can assume the roles in substantive capacities, even though the enabling acts of the agencies explicitly state the need for the senate confirmation.

With regard to the nominee of President Buhari for Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, Vice President Yemi Osinbajo said the EFCC Chairman does not require senate confirmation. After his confirmation had been rejected twice by the Senate, Mr. Magu has continued to function as head of the EFCC in “acting” capacity.

The Senate has said it would seek legal adjudication on the matter, and until then it has suspended confirmation of any such nominees of President Buhari. For the CBN, this has stalled the confirmation of Mrs. Aishah Ahmad as Deputy Governor. Also nominated by the President last year were Adeola Festus Adenikinju, Aliyu Rafindadi Sanusi, Robert Chikwendu Asogwa and Asheikh A. Maidugu as replacement for MPC members who would have served out their tenures at the end of the year.

At the end of December, CBN Deputy Governor for the Operations Directorate, Suleiman Barau, retired after serving out his second five-year term.

The CBN Act stipulates that the MPC shall consist of: the CBN Governor, who shall be the Chairman; the four Deputy Governors of the Bank; two members of the Board of Directors of the Bank; three members appointed by the President; and two members appointed by the Governor.


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