NESG Comment: Angry CBN Hits Back |The Source

By Uche Mbah

The Central Bank of Nigeria (CBN) on Tuesday lashed out at the Nigerian Economic Summit Group (NESG), accusing the group of falling short of its own standards and, therefore, has become a shadow of its old self.

The NESG had recently criticized the CBN on its handling of Forex disposals, saying the apex bank  lacks transparency in the disbursement of its intervention funds and the management of the foreign exchange allocations.

However, in a statement signed by Isaac Okorafor, CBN’s Director of Corporate Communications, the CBN said the group has chosen the path of cheap popularity to resuscitate its brand, alluding that the NESG’s “allegations are reflective of sinister motives and malicious intent.”

Said the CBN: “The false alarm raised by the Nigerian Economic Summit Group raises serious credibility questions on the actions of the group, as its comments, which have been circulated across the globe, significantly harmed the credibility of the Governor and the CBN as an institution.

“Although the NESG, under its current leadership, has fallen short of its own standards, and become a shadow of its old self, we believe there are better ways to resuscitate the Group’s brand other than through cheap popularity and tarnished attention, using ambushed press statements made up of contrived allegations,” the regulatory bank said.

This magazine had reported that the NESG Chairman, Asue Ighodalo, and CEO, Laoye Jaiyeola, had frowned on the evolving roles of the CBN in Forex management.

It had said: “The Group expresses serious concerns about how the Central Bank of Nigeria (CBN) has carried on the business of foreign exchange transactions, loan disbursements (intervention funds), and price fixings without appropriate policy clarity.

“This can be subject to abuses, manipulations, and significant market disruptions, reflective of a policy akin to crony capitalism. We therefore respectfully request the appropriate authorities to properly review this policy to restore credibility into our financial sector,” the NESG had said, faulting the conferment of immunity on CBN officials.

“These are draconian, totalitarian, and inimical to the development of a stable and transparently regulated financial sector.

“We respectfully request that the President should please withhold his assent until the Bill is properly reviewed, amended and is made fit for purpose” the NESG had aid.

But the CBN said the NESG should have consulted them before going public, based on “the cordial and open relations between both organizations. The NESG could have raised its allegations directly with us but never did.”

“Contrary to the NESG’s allegation that our lending process is devoid of a proper framework, it is important to note that recipients of intervention funds from CBN go through an expansive due diligence process through participating financial institutions (PFI), following which an the additional assessment process is embarked upon by the CBN before disbursements are provided.

“The PFIs expend extensive due diligence on these intervention loans as the risk of default lies with them,” the CBN said.

“On the revisions to the BOFIA Act, there are many reasons why we see a total ignorance or malicious intent on the part of the NESG. First, the provision they refer to as being currently conceived as part of the new BOFIA already exists as Section 53 in the old Act, which is now Section 51 in the amended Act passed by the National Assembly.

“The current bill has not proposed any changes to that section at all. Second, contrary to their misleading anxiety and associated reportage, the provision of Section 51 does not purport to confer immunity on the Governor of the Central Bank of Nigeria like that which obtains for State Governors.

“Rather, this provision protects the Federal Government, the Central Bank of Nigeria and their respective officials against adverse claims for actions or omission in good faith exercise of powers under BOFIA and other specified statutes including the Central Bank of Nigeria Act and regulations made thereunder.

“The import of the said provision is to set a threshold against which suits against public officers must be filtered, such that for a suit to be maintainable it must scale that threshold by proving bad faith on the part of the pubic officer. It is not a bar against action,” the apex bank said.