Economic crisis looms in Nigeria as National Assembly fails to confirm members of Monetary Policy Committee
The only way to avert the crisis is for the National Assembly to approve the pending CBN nominees list with them.
The MPC is a statutory body of the Central Bank of Nigeria and it is in charge of formulating monetary policy for the country. Its decisions cover issues such as interest rate, exchange rate and other matters that affect investment climate of Nigeria.
The MPC is the highest policy-making committee of the central bank.
The committee is made up of 12 members – CBN governor, 4 deputy governors and 7 external members. A quorum of the committee is formed with 6 members of the 12-man committee. However, this is not possible now as approval of 7 members is still pending with the National Assembly including that of a Deputy Governor nominee, Mrs Aishah Ahmad.
Impacts of the meeting not holding will be beyond economic and may trigger a political crisis in Nigeria.
The first victim of this delayed approval by the National Assembly would be foreign investors' confidence. This may then erode the gains made so far by . To foreign investors, a bad policy is better than no policy.
This will also impact negatively on the fiscal policy of the government as the revenue side of the budget may not be realised. Many external investors will avoid government bonds or any debts instruments from the country.
Economic plans will be seriously affected and infrastructural development will stall. This is because Nigeria cannot execute 2018 budget without external borrowings as plan.
Considering that 2018 is just one year before the next election, chances of electoral success of the Buhari’s government at the 2019 poll is also at stake.
Far more important than the political impacts are the potential negative effects on socio-economic situation, especially unemployment rate. Many jobs would be lost in the real sector of the economy. Sectors such as banking, services, information technology and communications, agriculture and construction will be most affected as their productivity is directly linked to government budget.
Finding amicable solutions to the case should be the priority of President Buhari and his economic management team. This situation needs not be treated with the usual lackadaisical attitude the current government is known for.
If the meeting fails to hold as the situation portends, it will take a long time for the Nigerian economy to recover from the shock.
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