From governors to ministers and to directors-general, money budgeted for salaries and for capital projects is almost always kept in fixed deposit accounts because doing so attracts as high as 15 per cent interest yearly. And given how public funds are kept in high interest yielding fixed deposits, budgeted public projects end up delayed or abandoned. The case of putting N10bn budgeted for capital projects in one year fixed deposit at 15 per cent interest will suffice. Here, we’re talking about a public officeholder such as a governor, a minister or a DG, making the whopping sum of N1.5bn just by illegally moving some public funds from current accounts to fixed deposit accounts.
Given the huge personal gains, it is now rampant among governors to go as far as borrowing billions of naira from banks and then putting the same money in high interest-yielding fixed deposit accounts for personal gains.
This is the kind of high level of corruption, resulting from public officeholders who discovered the huge money to be made putting public money in fixed deposit accounts. The same way public sector deposits profit public officeholders, so do banks. This is demonstrated by the kind of astronomical profits these banks declare year-in-year-out simply by lending the same money belonging to government to government. Given the huge gains and the kind of powerful people and banks involved in this fraud, it is understandable why banks do everything to smuggle in their fronts into the Central Bank of Nigeria either as a governor or a deputy governor so that at every Monetary Policy Committee meeting, they ensure that the Cash Reserve Ratio on public sector deposits is continuously low to benefit them and the public office-holders. But in July 2013, in his infinite patriotism, former Governor of the Central Bank of Nigeria, Lamido Sanusi, decided to bring this fraud to an end.
Not only did he surprisingly increase the CRR on public sector deposits from 12 per cent to 50 per cent that month, in January 2014, he went further to increase it to 75 per cent; and with the promise to further increase it to 95 per cent. Alarmed, the “banksters” and the public office-holders were quick to stop him at all costs. A month later – precisely February 20, 2014 – based on the Minister of Finance, Ngozi Okonjo-Iweala’s recommendations, President Goodluck Jonathan suspended Sanusi. For most analysts who didn’t understand how the governor’s increase of the CRR on public sector deposits had stepped on powerful toes, they wrongly attributed the governor’s suspension as the result of his embarrassing whistle-blowing, which exposed the billions of dollars missing from the Nigerian National Petroleum Corporation.
When, in reality it was the ongoing increase of the CRR on public sector deposits and his threat to further increase it to 95 per cent that led to his suspension. Generally, the CRR is that percentage of the total customer deposits each commercial bank is required to hold as reserve either in cash or as deposits with the apex bank. In other words, Central Banks tend to use either their increase or reduction of the CRR to either reduce or increase system liquidity. But unlike in most countries where either the CRR on pubic deposits is mostly 100 per cent or it is illegal to put public money in any form of interest-yielding fixed deposits, public office-holders in Nigeria have illegally moved public funds from their non-interest-yielding current accounts to high interest-yielding fixed deposits, and done so to capture the huge profits emanating from that for selfish gains.
During the recent MPC meeting of the CBN, which took place between May 18 and 19 2015, a monetary policy coup took place without Nigerians knowing about it. On May 19, the Godwin Emefiele-led CBN reversed all the gains brought about by Sanusi since January 2014 when the CBN reduced the CRR on public sector deposits from 75 per cent to 31 per cent. This reversal, which has been waited for by the “banksters”, became inevitable since most banks’ huge annual profits are dependent on this fraud. Because it’s this money put in fixed deposits that banks go ahead to lend back to government at exorbitant interest rates, that’s why this year alone, government is spending N943bn on not repaying our so-called domestic debts, now at N12.06 trillion but simply to service the debts.
This unfortunately did not include the billions of dollars recently lost to the banks when the CBN falsely defended the naira at N155 from July 2014 to October 2014 while the plunging global oil prices depleted the country’s foreign reserves. Instead of patriotically doing the needful, they artificially kept the naira so high to deplete the country’s scarce foreign reserves. Even when they seemed to have finally come to their senses, rather than fully devalue the naira, they still prefer self-serving cosmetic measure, which led to from N155 to N168 per dollar. This was carefully done to ensure that the banks and their foreign partners in foreign exchange speculation had enough time to dump the naira by buying up all the dollars the apex bank put up in its false defence of the naira.
To fully understand how much not to fully devalue the naira from N168 to N200 per dollar cost the country, imagine the banks and their foreign partners in currency speculation were handed free N32 per dollar until they gradually exited the naira. Let’s now do the math to see the actual money wasted and handed the banks, thanks to the CBN acting as their front. Since the CBN spent $5.0 billion to keep the naira artificially high, let’s multiply N200 per dollar by $5.0 billion spent on this false defence of the naira (200 x 5.0 billion = N1.0 trillion). This was the money wasted between November 2014 and February 2015 because of the CBN’s disjointed policy. These recent actions of Emefiele and his deputies have unapologetically proved Mayer Amschel Rothschild, founder of the Rothschild international banking dynasty, right when in 1802 he bragged that, “The man who controls Britain’s money supply controls the British Empire. And since I control the British money supply, I (control the British Empire)’’
The question we’ve to ask ourselves is: Why should a group of unelected so-called technocrats have the kind of enormous power to conduct monetary policy as it pleases them, including pursuit of banks’ narrow interests at the expense of the economy? How should some self-interest serving group be allowed such unrestricted power over our monetary policy, which remains the lifeblood of our economy? If President Muhammadu Buhari cannot oversee how the monetary policy of the CBN is conducted, how can he achieve his economic campaign promises made to millions Nigerians?
How is the President who should from time to time present his economic performance card to Nigerians not have the power to direct the country’s monetary policy decisions? Should any President feel safe leaving the very lifeblood of the economy in the hands of some policymakers appointed by an opposition party, especially when it is possible that they could be used by those who earlier appointed them to undermine the government in power? If the formulation and implementation of best monetary policies that engender economic development in developed economies like the US and China involve the presidency, why shouldn’t that too be the case in Nigeria?
That’s why President Buhari should waste no time in repealing some sections and subsections of the CBN Act of 2007, which handed kind of sovereign-like independence to the CBN managers, who even though unelected, make politically sensitive economic decisions, including the anti-economic growth monetary policy flip flop by the Emefiele-led CBN. Another absurdity in the Act is the governor chairing the CBN’s Board of Directors – the supposed watchdog. Good governance and transparency not only require such a board to be chaired by either a former president or a former vice-president of the country, but also that this 12-man board be reduced to a seven-man board with only three members from the CBN.
Also, the Act’s amendment should include insistence on all MPC meetings – particularly interest rate and exchange rate policy decisions – be fully and rigorously scrutinised by the Presidency along with the appropriate National Assembly committees before such policy is adopted. This is to ensure that their outcomes foster credit flows in ways that facilitate an orderly economic growth and job creation.