Govs’ Spending Lifestyle Worsening Inflation – CBN

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The Central Bank of Nigeria (CBN) has warned Nigerian state
governors to mind how they spend funds accruing to their states as their
lifestyle and bogus spending habit is responsible for the rising cost of
products in the country. The deputy governor, financial system stability of the Central
Bank of Nigeria (CBN), Kingsley Muoghalu, issued the warning during the
presentation of a paper at the 5th Annual Banking and Finance Lecture of the
Nnamdi Azikiwe University, Awka.
Muoghalu said that  a survey has shown that Nigerian
politicians, especially state governors, deliberately involve themselves in
flagrant and ostentatious expenditure as a way to show off their class, without
the knowledge that their action is responsible for inflation and devaluation of
the country’s currency.

Speaking on the topic, “The contributions of CBN to the economic
development of Nigeria”, Muoghalu, who represented CBN governor Mallam Sanusi
Lamido Sanusi, said that it is the reason CBN needs its independence.
 “When the CBN loses its independence to the level that a
state governor or a top politician can call the CBN governor and say, ‘Mr XYZ
is coming for loan, please give him at 6%’, then you know that the fall of the
country is imminent.”
He said the CBN must get the autonomy to make its budget and
determine its own expenditure without interference from politicians if the
country must continue to move ahead. “CBN is one of the managers of the
country’s economy and our role is a special role. The central bank of any
country acts as the guiding flame of that country and should not be dictated
to.
“In Nigeria, people have continued to challenge our
independence, but it is so because we are in a democracy, and people can talk.
This is a policy battle that is still being fought, but the politicians cannot
continue to dictate for the CBN what the interest rate should be.”
He stated that those opposing the autonomy and independence of
the bank are either doing so as a result of ignorance or clearly do not want
the growth of the nation’s economy. He added that, without the autonomy of the
CBN, it would only be answerable to politicians who would manipulate it at will
to suit them, thereby killing the economy.
 “Imagine a CBN where the governor is answerable to another
personality who is the chairman of the board, and that chairman happens to be a
committed member of a political party and his party is standing for election;
the tendency is that he will want a lot of favour from the bank, at the
detriment of the nation’s economy,” Muoghalu said.
We’ll investigate
CBN’s claim
 – Governors’ Forum
In a reaction yesterday, the director-general of the Nigeria
Governors’ Forum, Dr. Asishana Okauru, said the secretariat cannot react in a
vacuum, adding that it would investigate the circumstances under which the
statement was made.
He said that the CBN is a credible organization and, as such, he
did not expect such comments to emanate from it.
“I don’t want to react in a vacuum. I will check it up with the
CBN. The CBN is a credible institution and so we will look into the matter. We
do not expect the CBN to make such statements,” he said.
Source: Leadership

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