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Why we should close down the CBN for two years (2)

IT was more or less the same story in neighbouring Kenya.  Prime Minister Odinga, a Kikuyi , who won the election wanted control of the Central Bank of Kenya.

The President   Kabali, a Luo , would  not budge.  Now we have to live with two separate and different Central Banks of Kenya.

Indeed, there is a distinct possibility of a third one – for the nomadic Masai.

A roving Central Bank is an innovation the World Bank and the International Monetary Fund [IMF] would just have to live it.  After all, they are both champions of free market, liberalization and competition !!

What was most amazing was the revelation that in Nigeria there were two parallel Central Banks before the military dictator General Sani Abacha seized power in 1993.

Actually, what happened was that the Nigerian National Petroleum Corporation [NNPC] under Abacha’s Minister of Petroleum Resources, Chief  Dan Etete was even more powerful than the Central Bank of Nigeria [CBN] under Governor P.A. Ogwuma.

Apparently, the Minister of Finance, Chief Anthony A. Ani, a chartered accountant canvassed for only one Central Bank in order to ensure proper monitoring and accountability.

This enraged the Minister of Petroleum and it became open warfare between him and the Ministers of Finance.  It was a fierce battle which abated only when the cunning General ordered the two “Central Banks” to cease fire.

He grabbed both CBN and NNPC firmly under his control and then set up another Central Bank in the Presidency with his National Security Adviser  as the Governor!!  Billions of dollars found their way to the vaults of Swiss banks.

However, Abacha always insisted that he was keeping money in safe custody away from the prying eyes of the American government which may want to seize; and from free-spending Nigerians who would just squander !!

I was surprised when the professor disclosed that Dr. Pius Okigbo the Nigerian economist and former Governor of the Central Bank of Nigeria studied at both London School of Economics and Cambridge University – and that both institutions had been given copies of “The Okigbo Report” by the late Dr. Okigbo himself who was a serious academician.

He was anxious to avail scholars of his report as research material for those who might be interest in the risks attached to having only one Central Bank.

Ironically, for almost ten years the Nigerian Government claimed that it could not lay hands on a signed copy of the Okigbo Report which dwelt at great length on how Nigeria spent (or mis-spent) its oil windfall following the outbreak of the Gulf War (between Kuwait and Iraq).

I was truly startled when Professor Pemberton-Smith postulated that the Nigerian Civil War which raged from 1967 to 1970 and consumed almost one million lives could have been averted had General Emeka Ojukwu the leader of breakaway “Republic of Biafra” not insisted on having his own separate but equal Central Bank of Biafra.  Nigeria’s military Head of State, General Yakubu Gowon would have none of it.

He was adamant that there must be only one Central Bank under the firm control of Nigeria’s Minister of Finance – Chief Obafemi Awolowo.  When General Ojukwu would not budge, Chief Awolowo delivered a knock out punch (a masterstroke !!).  He changed the currency and all the money trapped on the Biafra side became worthless.
Shortly after that, the war being waged by Ojukwu collapsed.  The rest is history.
The professor caused an uproar the likes of which had never been witnessed in the hallowed hall of Trinity College, Cambridge University when he showed on a giant projector clips from his recent visit to Somalia.

It was pure anarchy.  There was no government.  The only thing that was working was chaos !!  Central banks had sprung up everywhere.

In the so-called capital, Mogadishu, every street had its own Central Bank with the Governor carrying an AK-47 rifle slung across his shoulder together with a chestload of rocket launchers and Improvised Explosive Devices [I E D’s].

It was free market and competition at its fiercest!!

For his stellar performance, the professor was rewarded with a standing ovation.  We all trooped out to the lawn to partake of the drinks and finger foods which the college had provided.

To my utter surprise, the professor stuck out his hand at me and invited me to the dinner being hosted by his uncle, the former Governor of the Bank of England.

I was still pondering why he had singled me out.  Straightaway, he disclosed that he had come across a paper delivered in London at a seminar hosted by the Britain-Nigeria Association on Nigeria’s 1983 Budget.

According to him, almost 30 years afterwards nothing, absolutely nothing had changed!!

Actually, I had entirely forgotten about that lecture and I remain eternally grateful to him for refreshing my memory  and availing me of his own  heavily marked copy of my dissertation on the Nigerian economy.

Once assembled in the sumptuous ambience of the restaurant in, we could not but marvel at the old world dignity of the former Governor of the Bank of England.

He too had been a scholar at Trinity College, but he was almost apologetic about his nephew Nigel’s somewhat outrageous remarks.  He solemnly declared:  “Nigel will always  be Nigel”!!

Dinner commenced shortly afterwards but not before the Governor had made some observations about Nigeria, a country in which he has maintained a keen interest over the years.

He confessed that he was somewhat alarmed that out of the 36 states in Nigeria only one or two are financially viable – the rest are dependant on the Central Bank for sustenance and survival.  Yet the government and the national assembly want to create more states !!

He added that he was equally alarmed at the outrageous salaries and allowances which members of the National Assembly were paying themselves – directly from the Central Bank of Nigeria!!

By J. K Olosha, an accountant, writes from Lagos.


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