Did the Central Bank of Nigeria (CBN) break the law in the amount of credit it has extended, so far, this year, to the federal government to help the latter manage its deficit? The relevant sections of the central bank’s enabling statute forbid it from lending to the federal government more than 5% “of the previous year’s actual revenue” in “respect of temporary deficiency of budget revenue”. The central bank argues that total credit to the federal government from it is but a fraction of government deposit with it. This, of course, does nothing to address the law-breaking question. But it, at least, seems to involve more thinking than the argument, increasingly popular on main street, which essentially asks “What is the central bank to do, were the federal government to ask it for (more) money?”.
Irrespective of the specific nature of the arguments on this matter, it would seem that the new consensus — one which is likely to determine the fate of our current democratic experiment — is that when a force as compelling as “change” is upon a people as when one has a fever, obsessing about rules and laws is akin to the febrile patient’s concern with the dosages of his/her medication. The context for this conversation is obviously non-Western. But that ought not to worry serious patriots unduly. Are we all not living witnesses to how the West and its local cohorts have conspired to perpetuate the dependence of the local economy on foreign metropoles through their propagation of economic orthodoxies?
Did not these same experts argue for the naira to play the lead in the domestic economy’s adjustment to straitened external terms of trade? And before that, have these experts not always demonised the copiousness of our local nostrums in favour of their more “scientific” weights and measures? Why, therefore, ought one with a raging fever to count his/her pills and take them to the rhythm of a metronome, when you can swill the “agbo” with an abandon commensurate with the passion of the rampaging ailment? Or, which is no different, why let market forces force the naira down — hurting national virility in the process — when you can, as the central bank has demonstrated, through multiple currency practices, throw enough dollars at the naira to force its price up?
If the federal government needs money, then by all means what is to stop us (other than the neo-colonial experts from the West) from throwing all the money we can lay our hands on at it?
Nothing, really. Not even our laws — written, need we be reminded by these selfsame experts.
Indeed, why should we bother about processes, too? Should it matter, to take but one of the more recent examples, that the process by which the federal government establishes its need for central bank financing is one that has the responsible ministers establishing a funding need? Should this be followed by a discussion at the Federal Executive Council of how these needs fit in with the government’s programmes and agenda? Should it then make sense that the finance minister, invited to find ways of funding these new programmes then describes recourse to central bank lending as the most optimal in the circumstances? Or should government have included as part of its spending warrants for particular financial years estimates of how much of a shortfall it expects in its finances, and how much it hopes to borrow from the central bank?
Irrespective of whichever path the federal government arrives at its deficit financing need from, somebody there (or a department) must then be responsible for requesting of the central bank the funds that the fiscal authority has agreed to borrow — even if it has been agreed that this must be a blank cheque.
If, however, we have agreed that the pursuit of the goals of our “change” agenda may be injured by adherence to rules and laws, is it not the case that a pernickety compliance with processes and procedures could similarly cripple this project? Proponents of the “change” agenda would seem to agree with this reading of the developmental and growth challenge facing the country today: ride roughshod over each and everything that stands in the way of the Buhari administration’s progress.
Except that this direction may not be the most optimal for the growth and development needs of an unfledged democracy like ours.