The just-concluded meeting of Association of African Central Bank Governors recorded a milestone – It witnessed the presence of President Muhammadu Buhari inside the head office of the Central Bank of Nigeria in Abuja, the first time a Nigerian President would visit the apex bank’s headquarters since the building was inaugurated in 2002, reports Kunle Aderinokun
As the 39th Ordinary meeting of the Assembly of Governors of the Association of African Central Bank Governors (AACB) ended in Abuja, what distinguished it from any other international event that had been held by the Central Bank of Nigeria (CBN) was the presence of President Muhammadu Buhari inside the apex bank’s headquarters to declare it open.
Apart from former President Olusegun Obasanjo who inaugurated the multi-billion naira head office of the CBN, successive Nigerian leaders before Buhari, namely the late President Umaru Musa Yar’Adua and former President Goodluck Jonathan never stepped into the building, situated in the heart of the Central Business District, which is less than five minutes away from the Presidential Villa in Asokoro District.
The CBN headquarters, an intelligent building, is a complex reputed to be the most expensive and sophisticated edifice in Abuja, the Federal Capital Territory. The sprawling building is 94 metres high with outstanding glass and granite façade.
The building, an architectural masterpiece, consists of a central atrium with four office wings, spacious auditorium seating 500 people, three-storey car park and service block with five generators as well as other ancillary buildings. The total gross floor area is 99,500 m². Considering the exceptional beauty of the complex regarded as one of the most-prized assets of the CBN, an institution that is strategic to the government, many wonder why the former presidents were not attracted to it.
Buhari’s presence at the meeting of African central bank governors at the CBN head office, analysts believe, may be a show of confidence in the apex bank led by its Governor, Godwin Emefiele, particularly its efforts at ensuring monetary stability in the economy. The visit has also been described as a positive precedence. Declaring the meeting open, Buhari commended the CBN for spearheading economic stimulus through its intervention programmes.
He described the theme of the symposium – “Unwinding Unconventional Monetary Policies: Implications for Monetary Policy and Financial Stability in Africa” as apt, considering the number of growing challenges that threatened the growth and stability of the continent’s financial systems.
He specifically expressed concern over economic challenges such as weakening global aggregate demand, rising inflation, capital flow reversals as a result of tapering in the United States, rising debt levels, increased exchange rate volatility and depleting external reserves owing to heavy dependence on primary commodity exports.
The president, however, acknowledged that African Central Banks had done their best possible in keeping the economies of their respective countries afloat through proactive and effective combination of conventional and unconventional monetary policy.
Noting that there was room for improvement, he urged the assembly of Governors to seek for original home-grown solutions to Africa’s economic challenges, instead of holding on to one-cap-fits-all prescriptions handed down from abroad. “The world is a dynamic place; with innovation, we can survive,” he added.
Further acknowledging the role of central banks in sub-Saharan Africa in promoting more inclusive economic growth, the President praised the effort of the Central Bank of Nigeria for its interventions, which he noted had helped to provide the much-needed stimulus in the Nigerian economy through specific intervention programmes.
Buhari urged the CBN to sustain the measures through good and bad economic times.
While also observing that monetary policy alone was not sufficient to tackle the issue of economic growth in Africa, President Buhari stressed the need for stronger coordination between monetary and fiscal policy.
On the part of the Federal Government, the president reiterated his administration’s determination to diversify the Nigerian economy away from excessive reliance on oil and other primary produce. He re-echoed his intolerance for corruption and charged Central Banks, as the major regulator of the financial system, to intensify their surveillance and propose policies that would guide the operations of financial institutions and reverse the trend of illicit flow of funds out of Africa.
Welcoming participants to the meeting, Emefiele noted that the large attendance of participants from outside Africa and various parts of the continent attested to the collective resolve and commitment to utilise the platform provided by AACB to deliberate and proffer solutions to the numerous economic challenges facing Africa.
The highpoint of the epochal event, attended by 27 member central banks and the African Union Commission (AUC), was the election of Emefiele as the President of AACB for a period of 2016-2017. Also elected alongside Emefiele to run the association for the period were the Governor of the Bank of Ghana as chairman of the West African sub-region; Governor of the Central Bank of Mauritania, Chairman of the North African sub-region; and the Governor of the Bank of Central African States, Chairman of the Central African Sub-region. Others were the Governor, Banque de la Republique du Burundi as Chairman of the East African Sub-region and Governor of the Central Bank of the Kingdom of Swaziland as Chairman of the Southern African Sub-region.
Reading the communique at the end of the meeting, Emefiele disclosed that the nomination for the Vice Chairman of the AACB, which is zoned to the South African Sub-region, would be made known in due course.
According to the communique, the meeting noted that the unwinding of unconventional monetary policy measures, adopted during the financial crisis by the United States Federal Reserve and central banks of developed countries, could have a negative impact on African countries due to the interconnectedness of economies.
However, the meeting noted that the unwinding of unconventional monetary policy could be an opportunity for African countries to develop appropriate measures to strengthen their resilience in the face of exogenous shocks.
The Assembly of Governors therefore stressed the necessity for African countries to diversify their economies and improve exports, while limiting imports.
AACB also emphasised the urgent need for coordination between monetary and fiscal policy across all African countries.
The governors also examined the implementation status of the African Monetary Cooperation Programme (AMCP) and pointed out the inability of African States to sustainably meet some of the criteria for macroeconomic convergence due to the negative impact of certain variables within the international environment.
They therefore urged African countries to strengthen efforts at implementing structural reforms in order to diversify their respective economies, improve the business environment and promote intra-regional trade as a way of strengthening their resilience amidst external shocks.
In reviewing the implementation of the work programme of the Community of African Banking Supervisors (CABS), which it noted had helped to set up an intranet platform for exchange of information among African banks, the AACB disclosed plans to unveil a project for collecting information on the activities of cross-border banks. This, the AACB noted, would allow the identification of risks associated with the activities.