The Central Bank of Nigeria (CBN) and the Nigerian Economic Society Group (NESG) have been advised to sit together and work out ways of uniting their strengths in order to fashion out policies to stabilise the economy.
This view was expressed in the September edition of the, “Memo to the Market,” a publication by Proshare titled, the “NESG vs CBN: Beyond the Battleground-The Need for Facts, Perspective and Resolution.” It referenced the recent altercation between the NESG and the CBN on the country’s economic policies.
The NESG had in a statement last month faulted some of the CBN’s policies, which got the response of the central bank.
Proshare in its report stated that, “both parties need to demonstrate restraint, open-mindedness, and preparedness to find a common ground. Analysts note that in disagreement, civility is usually the better part of a dialogue. But more importantly, they observe that conflict adds value to the decision-making process and opens public policy debate to wider perspectives and concerns (right or wrong) of the private sector.”
According the media outfit, the conflict between the NESG and CBN was avoidable but necessary and meant to establish clarity and policy coherence as well as promoting enlightenment and stronger corporate governance.
It said: “After battles, the troops are called in and the generals sit at the negotiating table with politicians to determine the terms of the truce. The same should be true after the NESG and the CBN have torpedoed each other over macroeconomic policies and the interventionist role of the monetary regulator.
“The dying embers of spent arsenal and scorched earth should leave both parties tired, reflective and more amenable to action that comes from reason rather than emotion.
“From the ruins of a battered relationship, both the NESG and the CBN need to allow flared tempers to cool off and begin a re-engagement that restores peace in pursuit of prosperity.”
Proshare recommended that the NESG and the CBN should arrange for a meeting to reconcile their differences and build a framework for future interactions that would be devoid of public drama. It also urged both institutions to release a joint statement stating the resolution of their differences and their agreement to work together.
The report added: “A comprehensive technical Nigeria economic model must we worked out with officers of both institutions collaborating to dimension the parameters of the model, design immediate and preemptive fiscal and monetary policy frameworks that will serve as guidance tools for scenario analysis and policy execution imperatives.
“Both parties need to schedule semi-annual meetings for economic reviews and outlooks to harmonise understanding between public and private sector economic actors.
“These meetings are not public forums and must abide by Chatham House rules of disclosure. The meetings would also serve as a platform to discuss the jointly designed macroeconomic model of the country and the policy implications of key data outcomes.”
The publication noted that collaboration between both institutions would not mean the absence of policy shocks (as may be deemed necessary by the CBN) or counter positions (as may be seen as necessary by the NESG).
It advised that these actions should be taken without prejudice to the confidentiality of information shared at meetings of both institutions, adding that such a level of collective confidence would build a nexus for controlled conflict that provides insight rather than in fight.
“Independence within collaboration is crucial to both the CBN and the NESG. The two organisations must find common grounds for cooperation without losing their objectivity and independence. Appreciating this subtle point avoids the unfortunate situation where institutions dig into each other with avoidable class labels. Disagreements are tools for clarity, not weapons of discord,” it said.
Proshare also highlighted the need for the CBN to rethink its monetary policy by unlearning conventional paradigms and relearning new ones in order to fashion broad and perhaps unchartered approaches to monetary strategy that are clear, coherent, and clever.
“Nigeria’s economic challenges require thoughtfulness outside conventional parameters. The evident failures of the macroeconomic frameworks of the past require a remodeling of the country’s fiscal and monetary realities and the adoption of policy responses that may be unconventional but effective.
“This being said, governance cannot be sacrificed at the altar of expediency. In pursuing its agenda to create growth and employment, the CBN must not be seen to be extending its functions beyond its constitutional remit,” it added.