Rather than a seasoned commercial banker, the ideal Central Bank of Nigeria Governor should be a renowned economist.
…rather than a seasoned commercial banker as we had with the previous and current CBN Governor, the ideal Central Bank of Nigeria Governor should be a renowned economist. A person with a thorough understanding of both fiscal and monetary policy, who can effectively use the monetary tools at his or her disposal to steer this country toward economic growth, is needed to solve the challenges afflicting our economy and financial system.
According to many experts, a central bank is an independent agency that specialises in the control of money supply, conduct of monetary policy, supervision of the financial system, management of the legal tender, and engendering of macroeconomic stability in a country. These responsibilities are given to central banks to stabilise the nation’s currency, keep unemployment low, prevent inflation, and foster economic growth.
It seems that in Nigeria, we have a tendency to equate commercial banking with central banking. However, this couldn’t be further from the truth. Someone does not comprehend monetary policy or the promotion of macroeconomic growth simply because s/he is connected enough to mobilise deposits at lower interest rates and turn these deposits into loans at higher interest rates.
A commercial banker serving as CBN Governor would also have the potential for divided loyalty. Regulating Deposit Money Banks is one of the CBN’s primary responsibilities, however a Governor who is chosen from a DMB will have to resist the temptation to favour his or her former employers and to create policies that may benefit the banks but not necessarily the general public.
• International experience and exposure. The world is not a vacuum, and traveling is a fantastic way to learn new things. This means that the CBN Governor of Africa’s largest economy will be a fantastic fit if they have experience working in global financial institutions and dealing with monetary policy at the highest level possible.
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