CBN corrects Sanusi on govt’s $30bn loan request, forex policy

Central Bank of Nigeria (CBN) has accused the Emir of Kano, Sanusi Lamido Sanusi, of playing to the gallery over his statement that there are five exchange rates in the country.

The CBN debunked the allegation of the emir that the apex bank allocates dollars to end users, CBN in a statement on Saturday by its acting Director, Corporate Communication, Mr. Isaac Okorafor  said request for foreign exchange are made through the banks. It explained that there is nowhere in the world where the apex bank allows vicious currency speculators to distort its currency endlessly.

Sanusi, also a former governor of CBN had on Friday, alleged that the apex bank was lending to government above the limits stipulated by the CBN Act of 2007 and that no one was willing to lend to the Nigerian government.

“If Senate approved, I want to see who will lend you $30 billion when you have five exchange rates”, the monarch said at a policy monitoring dialogue hosted in Abuja by Savannah Centre for Diplomacy, Democracy and Development.

Faulting the emir’s position further Okorafor said the apex bank had set up an inter-bank foreign exchange market where anyone who wished to buy foreign exchange could bid for and buy through their banks.

“It is not true that CBN allocates dollars. There is nowhere in the world that the Central bank sits by and allows vicious speculators to solely distort the value of its currency endlessly. All central banks intervene to buy or sell in the market to ensure that the local currency is protected from dubious attacks”, Okoroafor stated.

“The channels for advice and contribution of ideas on the current economic situation by all patriotic Nigerians are open. It is rather unfortunate that some people have chosen to play to the gallery and to make statements to disparage those in leadership at this time in total insensitivity to the larger interests of the Nigerian economy.

“We should not forget that the seed of our current economic crisis was planted by the failure of those who occupied public office in the past but failed to act in the long term interest of the Nigerian economy. It is easy to criticize from outside.

“It is always easier and the grass greener when people are out of office. The challenge we face today is a choice between pandering to the established interest in Nigeria’s speculative economy and the protection of the wages of the real stakeholders who work hard on fixed incomes. For they are the core victims of Naira depreciation.

“At this critical time in the life of our country the CBN will continue to explore avenues with the Federal Government in order to find solutions to the current economic situation. Already Nigerians are waking up to the call to be more productive and to look inwards and to be less dependent on the importation of foreign goods and services.

”Sanusi, in his Friday speech, said the apex bank was illegally lending to the Federal Government. The problem of the current government is not having the right policies to fix the current economic woes”, he stated.

The emir’s presentation showed that CBN’s lending to the government since Buhari came in had spiked from about N1.5 trillion to over N4.5 trillion.

“The CBN-FGN relationship is no longer independent. In fact, one could argue their relationship has become unhealthy. CBN claims on the FGN now top N4.7 trillion —equal to almost 50% of the FGN’s total domestic debt. This is a clear violation of the Central Bank Act of 2007 (Section 38.2) which caps advances to the FGN at 5% of last year’s revenues. Has CBN become the government’s lender of last or first resort?”

Sanusi said at the dialogue that no one was willing to lend to the Nigerian government. “If Senate approved, I want to see who will lend you $30billion when you have five exchange rates”.

According to the former CBN governor, the country is enmeshed in heavy debts. Out of every N1 Nigeria makes, the emir explained, 40 kobo goes to debt and 60 kobo is left for salaries, health, education, power, infrastructure.

He said oil is merely a working capital that cannot make the country rich. Nigeria produces one barrel for 80 Nigerians; Saudi Arabia produces one for 3 Saudis, Sanusi said. The former CBN boss noted that in every economy, growth is driven by “consumption, investment and net export”, adding that “our exports cannot grow, without regulatory certainty or an increase in the price of oil”.

He lamented that the country was spending money on repaying debts and also on recurrent expenditure, as against education, healthcare, power, and other infrastructure. The emir also stated that Nigeria is the lowest per capita spender on development in Africa. On speaking truth to power, he said: “I can’t apologise for being who I am. The government I served, I did not keep quiet. When I am not serving the government, I cannot keep quiet.”