TheCable

Muhammad Sanusi II, emir of Kano and former governor of the Central Bank of Nigeria (CBN), says he is pleased with the apex bank for its recent show of independence.

The revered monarch, who spoke in Lagos during the launch of the Nigerian Banking Report, also expressed support for Godwin Emefiele, governor of the bank, as regards his position on the sale of some national assets.

“To be honest, when the fiscal authorities and many people in the private sector said they wanted a lower interest rate, I was concerned that the central bank would succumb to pressure,” he said.

“The fact that the central bank did not, shows that the central bank is beginning to reclaim its independence, which to me is a very good thing.

“I was very pleased with the MPC. In fact, I was waiting for the outcome of the meeting. When the central bank said they are not bringing the interest rate down, then I said ‘yes’, that is what I like to see.

“As an interested party and a former central banker, I can see why the central bank was not willing to reduce the interest rate at this point in time.

“If you lower the MPR by 100 or 200 basis points (bps), it is not going to lead to a rapid increase in credit growth. You will not see an increase in credit growth that would reverse the downward trend in output by lowering MPR by 100 or 200 bps.”

Sanusi said the country needs foreign exchange, backing Aliko Dangote, president of Dangote Group and Emefiele, the CBN governor, on the sale of national assets with a buy-back clause.

“The immediate oxygen that this economy needs is foreign exchange and portfolio investors are important. Now, do we really have a flexible exchange rate? That is what we need to look at. These things require courage because some of the decisions you would take would seem to fly in your face in the first week or two.

“It is the inflow of dollars into the economy that would move the naira towards its fair value and for it to get to where you want it to be.

“We need to sell down some oil assets and sell down some refineries in a transparent manner that gives you value. You can even have the option of buying back later. But basically it helps you raise revenue.”