Buhari’s Interference In CBN Operations Led To Recession – ex CBN Boss

A former Deputy Governor of the Central Bank of Nigeria , Prof. Kingsley Moghalu , on Thursday said the level of political interference by the FG in the operations of the apex bank was a major reason why the economy went into recession .

Moghalu , who is now the President , Institute for Governance and Economic Transformation , said this while delivering a paper at the Annual Directors ’ Conference organised by the Institute of Directors , Nigeria .

He spoke on the theme , ‘ Implementing best corporate governance practices in Nigeria ’ s public and private sectors ’ .

He noted that the level of political interference in the governance and activities of public sector corporations had robbed them of independence.
This , according to him , has left the institutions too weak to set and meet effective performance targets and focus on delivering real stakeholder value .

He stated , “ The central bank that was led by his royal highness (Emir of Kano , Muhammadu Sanusi II) is not what we are seeing today . We have seen a lot of interference in the work of the central bank and I say that that was a very important factor that led to the massive recession that we have experienced in this economy .

“ Corporate governance has very real consequences for our livelihood, for the quality of the economy and strength of the economy . ”

Moghalu said apart from political interference , the culture of patronage in the Nigerian public sector governance had led to such corporations being seen and utilised only as a reward system for partisan politics .

This , he argued , had left the institutions with little or no thought given to competence and performance of public corporations and their boards .


He said the apex bank , in its current form , lacked a board , adding that this was inimical to its operations .

Moghalu stated , “ The central bank , in the last few years, has not had a board . How is this possible that a central bank operates without a board ? So how is the corporate governance being run ? Is it just by the governor? Or is it by the governor and anyone who is not a member of the board ?

“ That is a question of the rule of law . The central bank Act is clear . It is one of the public corporations in this country that is very strong from the way it was conceptualised .

“ So you have a very clear role for the board . The President’ s approving authority comes up only in about three instances in the board . One is in investment , the second is in currency and the third is the auditors.

“ Most of the rest (approving authority ) lies in the board of directors and if the bank doesn ’ t have a board , I find it very problematic . ”

He cited the Nigerian National Petroleum Corporation as another public corporation where massive financial obligations were being undertaken without board approval .
This , he noted, was not good corporate governance .

He said , “ The failure of corporate governance to take off in Nigeria’ s public sector is part of our country ’ s long -standing and continuing crisis of governance.

Nigerian citizens who are shareholders of a commercial company will demand accountability if those attributes are perceived to be absent , but they will not be as exercised by the failure of public corporations because they believe that these institutions exist to serve vested patronage interest rather than the public interest .

“ Examples include the evident and massive failures of corporate governance in the Niger Delta Commission and the Nigerian National Petroleum Corporation. ”