Inability of the Central Bank of Nigeria (CBN) to hold its first Monetary Policy Committee (MPC) meeting scheduled for Monday and yesterday, Tuesday may not affect the economy in the immediate, but at the long run if rescheduling fails to hold.
This is position of leading development economist and chief executive of Cowry Securities Limited, Mr. Johnson Chukwu.
In an interview, he said missing the beginning of the year’s rates calibration meeting at a time it has not made any remarkable changes on the rates may not be a big issue for the economy.
However, it may cause shock on the spines of intending investors either foreign or local who would have relied on the new rates (if any change) to decide their investment direction in the economy.
Continuing, he said the botched meeting would become more dangerous if the next planned emergency meeting in February fails to hold based on the inability of the Senate to screen and approve the list of names submitted to it.
Added to Mr. Chukwu’s position, the Director-General of Abuja Chamber of Commerce and Industry (ACCI), Mr. Chijioke Ekechukwu; said, “The aborted MPC meeting due to lack of quorum will adversely affect financial decisions of the country and investors generally. This is so because this was to be the first meeting for this fiscal year and, therefore, was to chart a course for monetary, credit, and fiscal direction of the country.
“Investors are waiting, banks are waiting, the capital market is waiting and other countries are waiting for these monetary policy indicators to be able to take their financial and investment decisions.”
According to him, “Although the CBN has retained all the rates by retaining the Monetary Policy Rate at 14 per cent, Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent, these rates and ratios probably would have changed if the MPC had met”.
“Investors, both local and foreign, are still going to hold back their investments until these variables become clearer and known,” Ekechukwu noted.
Business Hilights recalls that the MPC meeting officially slated for Monday and Tuesday was put on hold following the failure of the Senate to screen the nominated members sent to it since last year by President Muhammadu Buhari.
By the Act establishing CBN and MPC, there are 12 members of the committee out of which the tenure of eight had elapsed, leaving only four members on the panel and making it impossible for the committee to form a quorum.
It was gathered that the Senate had maintained that they would not confirm any nominee by the executive until the impasse regarding the nomination and non-confirmation of the acting Chairman of the Economic and Financial Crimes Commission Crimes Commission (EFCC), Mr. Ibrahim Magu, was cleared.