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Probe of CBN's investment in AFC
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Shamsudeen Usman
The Federal Government recently set up a panel to investigate the Central Bank of Nigeria’s (CBN) investment of $462 million in the Africa Finance Corporation (AFC).
The panel, headed by a senior police officer, has three weeks to submit its report. Its objective, among others, is to unravel the source of approval for the apex bank’s involvement in the venture.
The CBN with the present leadership has distinguished itself with commendable fiscal policy management especially with some of its proactive initiatives. The bank's shrewd management of our foreign exchange earnings culminated in Nigeria's ability to exit the debt trap. Again, the consolidation of banks through the record increase in minimum capital base has precipitated a chain of positive reactions the benefit of which are still being reaped today.
Another in the line of proactive actions in the management of Nigeria's financial resources introduced by the CBN is its spearheading of the establishment of the Africa Finance Corporation (AFC). Conceived as a private sector-driven multi-national institution in the mould of the African Development Bank (ADB) and the International Monetary Fund (IMF), over $1 billion has so far been contributed by a growing number of local, foreign and international financial institutions.
The AFC has been acknowledged as the final big push in Nigeria's financial services reform which began at commercial banking and the micro-finance levels. And the decisive step towards its setting up started with the Federal Government with the approval given on January 14, 2006 authorising the CBN to proceed with the venture.
We have no misgivings whatsoever with government's right to inquire into the affairs of the CBN, no less the investment of $462 million of our national resource. However, the fact that the process to the setting up of AFC is not only well documented but also involved some key figures who are holding even more crucial positions in the current administration is rather curious. The present minister of finance, Shamsudeen Usman, was a deputy governor of CBN at the time.
In effect, what government seeks to find out is right within the system. Such information could have been procured administratively without making a show of a probe which is headed by an assistant commissioner of police.
Elsewhere, central banks are treated as hallowed institutions. They are not usually drawn to the klieg lights of politics. Certainly, they are not subjected to the circus shows associated with probes as we know it in Nigeria. They are barely heard and the expectation that they are about to make a pronouncement elicits excitement within the banking community.
We are concerned with the state and stability of Nigeria's financial system and banking institution than winning more global acclaim, confidence and rating. The process of attracting foreign investment which the government says should be in the region of $600 million for its vision of making Nigeria one of the top 20 economies by 2020 must not be mingled with politics.
Now that the panel has been constituted, care must be taken not to let its work and findings be hijacked by those whose interests can be associated with those of fifth columnists.
If along the line there may have been any administrative process that was not fully observed, that should not be used as an excuse to put undue pressure on the country's financial system.
The CBN with the present leadership has distinguished itself with commendable fiscal policy management especially with some of its proactive initiatives. The bank's shrewd management of our foreign exchange earnings culminated in Nigeria's ability to exit the debt trap. Again, the consolidation of banks through the record increase in minimum capital base has precipitated a chain of positive reactions the benefit of which are still being reaped today.
Another in the line of proactive actions in the management of Nigeria's financial resources introduced by the CBN is its spearheading of the establishment of the Africa Finance Corporation (AFC). Conceived as a private sector-driven multi-national institution in the mould of the African Development Bank (ADB) and the International Monetary Fund (IMF), over $1 billion has so far been contributed by a growing number of local, foreign and international financial institutions.
The AFC has been acknowledged as the final big push in Nigeria's financial services reform which began at commercial banking and the micro-finance levels. And the decisive step towards its setting up started with the Federal Government with the approval given on January 14, 2006 authorising the CBN to proceed with the venture.
We have no misgivings whatsoever with government's right to inquire into the affairs of the CBN, no less the investment of $462 million of our national resource. However, the fact that the process to the setting up of AFC is not only well documented but also involved some key figures who are holding even more crucial positions in the current administration is rather curious. The present minister of finance, Shamsudeen Usman, was a deputy governor of CBN at the time.
In effect, what government seeks to find out is right within the system. Such information could have been procured administratively without making a show of a probe which is headed by an assistant commissioner of police.
Elsewhere, central banks are treated as hallowed institutions. They are not usually drawn to the klieg lights of politics. Certainly, they are not subjected to the circus shows associated with probes as we know it in Nigeria. They are barely heard and the expectation that they are about to make a pronouncement elicits excitement within the banking community.
We are concerned with the state and stability of Nigeria's financial system and banking institution than winning more global acclaim, confidence and rating. The process of attracting foreign investment which the government says should be in the region of $600 million for its vision of making Nigeria one of the top 20 economies by 2020 must not be mingled with politics.
Now that the panel has been constituted, care must be taken not to let its work and findings be hijacked by those whose interests can be associated with those of fifth columnists.
If along the line there may have been any administrative process that was not fully observed, that should not be used as an excuse to put undue pressure on the country's financial system.
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