The International Monetary Fund (IMF) has urged the Senate to confirm the Monetary Policy Committee (MPC) members of the Central Bank of Nigeria (CBN), as well as the Bank’s deputy governors and non-executive directors who were nominated for the positions by President Muhammadu Buhari since last year.
Recall that the Senate vowed not to confirm nominees of President Muhammadu Buhari until the acting Chairman of the Economic and Financial Crimes Commission, Mr. Ibrahim Magu, is removed from office following his rejection twice by the Senate.
The impasse has rendered it impossible for the CBN to form a quorum of the MPC whose past members had retired at various times last year, and compelled the central bank to postpone the first meeting of the committee last January.
However, IMF in its Article IV Consultation with Nigeria, released by the its executive board on Wednesday, called for a quick resolution as it also emphasised the need for the Nigeria government to pursue growth‑friendly fiscal adjustment, saying it would help frontload non-oil revenue mobilisation and rationalise current expenditure in the country.
According to them, this was necessary in order to reduce Nigeria’s ratio of interest payments to revenue to a more sustainable level and create space for priority social and infrastructure spending.
They commended the progress in implementing the Economic Recovery and Growth Plan (ERGP), including the start of a convergence in forex windows, tight monetary policy, improvements in tax administration, and significant strides in improving the business environment and commended the central bank’s tightening bias in 2017, which according to them, should continue until inflation is within the single digit target range.
“The implementation of an automatic fuel price‑setting mechanism, sound cash and debt management, improved transparency in the oil sector, increased monitoring of the fiscal position of state and local governments, and substantially scaled-up social safety nets should support the adjustment,” the IMF stated.
“A few directors urged confirmation of the appointments of the central bank’s board of directors and members of the Monetary Policy Committee.
“Directors commended the recent forex measures and recent efforts to strengthen external buffers to mitigate risks from capital flow reversals.
“They welcomed the authorities’ commitment to unify the exchange rate and urged additional actions to remove the remaining restrictions and multiple exchange rate practices.
“Directors stressed that rising banking sector risks should be contained. They welcomed the central bank’s commitment to help increase capital buffers by stopping dividend payments by weak banks.
“They called for an asset quality review to identify any potential capital needs. They noted that enhanced risk‑based banking supervision, strict enforcement of prudential requirements, and a revamped resolution framework would help contain risks.”
