Senate confirms Cardoso as CBN governor, others, urges them to halt Naira slide

By Haruna Salami

The Senate in the Committee of the Whole on Tuesday screened and confirmed Dr. Olayemi Cardoso and four other four nominees as governor and deputy governors of the Central Bank of Nigeria (CBN).

This followed a motion moved by the Senate Leader, Opeyemi Bamidele for the confirmation of the nominees of President Bola Tinubu for appointment as CBN governor and deputy governors.

Those whose nomination were confirmed include Olayemi Cardoso as CBN governor and Emem Usoro, Muhammad Abdullahi-Dattijo, Philip Ikeazor and Bala Bello as deputy governors.

Senator Bamidele said President Tinubu’s request was in accordance with Section 10(3)(a) of the Central Bank of Nigeria (Establishment) Act, 2007

The Senate President Godswill Akpabio said it was unusual for the Senate to receive communication from the President and resolve to consider it the same day, but the importance attached to the request made them do so.

During the screening which lasted more 3 hours, the senators wanted to know from the new CBN team what they will do to stem the continuous sliding of the naira which now exchange at 1000 naira to the dollar. They wanted to know what quick measures will they put in place to stop the slide of the naira since the naira cannot help itself.

The Senate said it was very clear now that the Nigerian economy is in a very worrisome state, with the local currency at all time low since 1960 when the naira is 1,000 to the dollar unlike the time when the naira was stronger than the dollar

Senator Enyinayya Abaribe (Abia South) asked the CBN governor nominee whether he will have the courage to say no to what has brought Nigeria to N87 trillion debt because of indiscriminate use of Ways and Means.

The upper chamber wanted to know the type of mechanism the CBN will put in place to achieve $1 trillion GDP in the next 8 years as revealed by the acting CBN governor

Cardoso’s response on the number of issues raised and his approach in handling the activities of the Central Bank is captured below:

“On the issue of foreign exchange which everybody has been talking about is very worrisome to everybody. It goes without saying that for the sort of country we want, we need to have an exchange rate that is very stable.

“There are short and medium term measures. The major short term measure has to do with balance of payments over a period of time like the sort of things that are being done already with respect to ensuring that you are getting more Petroleum Resources and diversifying in the economic base of the country.

“That I believe will continue by the present administration and of course, it will take time. I think we should take that as a medium.
“There are two very important issues that we will have to address if we are confirmed. It is what I will term correlational issues.
“We are aware that there are unsettled obligations by the CBN. Whether is N4b, N5b or N7b I don’t know but definitely the immediate priority is to ascertain the extent.
“We need to find a way to take care of that. It will be naive for us to be expecting to succeed if we are not able to handle that side of the foreign exchange market.

“Secondly, we have to be transparent so that any of the players in that market will understand. We have to come up with rules that are transparent that any of the players in that business understands.
“You cannot reasonably expect serious foreign investors, portfolio investors full direct investment, that is why we were talking about short term; we are not going to expect that players.
“Those players who will have direct impart on your market will do so if we have an opened transparent system that everybody understands, that can be relied on that is not subject to review at will.
“In setting up those guidelines one will also have to carry stakeholders along. We should be ready to engage people. And I share views that should be a major objective to get stakeholders together and share views and promptly come up with the two things which appear simple, but are far more important than they appear.

“Those two are the immediate steps that we will take will go a long way to ease off the situation we are having right now in terms of wanting investors to come in. Those that want to do business in Nigeria they want to see this is clear and if they don’t they will hold on to their money.

“This is the short term measure. Those that will be very important to us once we get in, is what we will address. I know that the impact will engender greater liquidity coming into the market. Those seeming withholding confidence will come back here. The will see that the coast is clear and if not they hold onto their money.

“We will be going to evidence based monetary policies. We shall not be making decisions based on a whim. I believe to significantly revamp the infrastructure of the Central Bank with respect to data and to ensure that our data gathering capacity is significantly enhanced so that we can make decisions based on data. That is key in determining the rate of inflation.
“The whole objective of ensuring that the energy side of the country is ramped up we also will work very closely with the fiscal side to ensure that it happens.
The big issue is the issue of money supply and the way that money has gone up tremendously in Nigeria. That on its own has major effect on inflation. 50% of inflation is as a result of money supply and deficit finance. This is the big problem and it has been for a long time and we have to face it frontal; that going forward, from the Central Bank of Nigeria, we will do everything possible to ensure that we work closely with the fiscal side and ensure that the issue of deficit financing does not become a problem to us. We cannot afford to have the big challenges from fiscal deficit financing”.

Senate adjourned to Tuesday October 3, 2023