Sack Incompetent CBN Governor; Reform CBN And The Banking And Financial Sector
While I strongly welcome the proposal to quickly probe the banks (CBN and commercial banks), I still believe that the entire banking and financial sector, starting with CBN should be completely reformed if we don't want to continue to allow some mean fraudsters and banksters continue rundown our economy with impunity.
First, the governor and his deputies should be sacked, while a caretaker team is charge impending the completion of the both the probe and the reform. Without this step, those running the CBN will obstruct every reform effort.
Should the section of the CBN act that insists that two-thirds of senators is needed before the governor is removed stand in president's way, one of the ways to remove Emefiele without the president having to seek the senate supermajority should be using Emefiele's recent public announcement that as the CBN governor, he never knew that there's 1% being paid to a private company called Remita by the money commercial banks remitting money on behalf of MDAs to the TSA account of the federal government.
That the apex bank boss should claim that he lacked knowledge of the billions of naira being lost by federal government only teinforces his incompetence as the chief banker of government. Or was he claiming that as the chief banker of the nation it's not his duty to ensure that government’s money is always well safeguarded?
Besides this being the height of negligence, the recent discovery of the kind of unbelievable fraud in the CBN by some top managers, could only confirm the governor's gross incompetence. There's no other way to be bring to an end the daily embarrassing corruption now synonymous with the CBN than President Buhari demanding for his immediate resignation.
Another reason why he should be removed are the revelations of his involvement in the ongoing investigations of the former NSA Col. Sambo Dasuki. That Emefiele was so deeply involved as has been so far revealed should be enough reason for the president to ask him to step aside so as to enable EFCC investigators to freely carry out the investigation without his office obstructing their work.
If the president has some difficulties sacking the governor, should the senate too have the same difficulties? Shouldn't the senate use Emefiele's well known incompetence as enough reason to sack him from the job using it two-thirds supermajority to remove him as the governor of the CBN?
The CBN reform should include the separation of governance from the management by ensuring that besides the governor no longer the CBN Board chairman, majority members of the board are from outside the apex bank.
The long overdue spinning off of the banking regulatory and supervisory responsibilities from the CBN by creating the Nigerian Banking Regulatory Commission as it is the case today in most modern economies around the world should be a major part of the CBN reform
In Emefiele's and deputy governors' place, besides the president looking for patriotic non-bankers, he should also ensure that the Nigerians he sending to oversee the affairs of the CBN are those ready to carry out the clean up of the mess in CBN.
For this to be well done, the President should urgently set up a powerful "Presidential Advisory Committee on Banking and Financial Sector Reform."
This has become urgent if we want to have a credible, quasi-patriotic and professionally pro-real sector banking and financial sector.
The truth is, there is no way this administration should expect great success in its agenda to turnaround and industrialise this economy without having the banking and financial sector pursuing these same goals.
Franklin Roosevelt’s success in overhauling reengineering the US economy couldn't have been possible without his government first embarking on a series of banking and financial sector reforms.
Started with the Glass-Steagall Act of 1933 not only separated commercial banking from investment banking but also ensured there were no close connections between the two.
Also using the Banking Act of 1935, he completely restructured Federal Reserve System (central bank). By centralizing moetary policymaking while leaving the 12 regional Federal Reserve Banks with regional banking regulatory and supervisory duties Roosevelt was able to achieve his ultimate goal of making sure that commercial banks' operations across the US became sound, effective, transparent, and above, all were truly beneficial to the whole economy, particularly the real sector economy.
Like President Roosevelt, making Nigeria's banking and financial sector pro-real sector, pro-investment, pro-growth, President Buhari should conduct full forensic reform of the country’s CBN, SEC, NSE, NDIC, commercial & investment banks.
This is badly needed if we too want to make all the country's financial regulators fully democratic and transparent; promote safer and more effective use of bank assets; regulate and make transparent interbank activities; and above all, be able to prevent the inherent undue diversion of funds into speculative operations and other sharp financial malpractices that have continued causing economic financialization and undermining the ongoing efforts to diversify and industrial the economy.