MPC May Not Meet Due to Lack of Quorum

Obinna Chima

Following the refusal of the Senate to consider President Muhammadu Buhari’s nominees for the vacant positions in the Monetary Policy Committee (MPC), its first meeting for 2018, scheduled for the third week of January, might not hold due to lack of quorum.

By the end of this year, eight positions in the 12-member committee would have become vacant, making it impossible for it to form the quorum required for it to meet.

The president had in October nominated Mrs. Aisha Ahmad as a deputy governor of the Central Bank of Nigeria (CBN) to replace Dr. Sarah Alade, who retired from the bank in June.
He also nominated Professor Adeola Festus Adenikinju, Dr. Aliyu Rafindadi Sanusi, Dr. Robert Chikwendu Asogwa and Dr. Asheikh A. Maidugu as members to fill the positions of four others whose tenure would expire at the end of the year.

Meanwhile, Alhaji Suleiman Barau, another deputy governor of the central bank, who is also a member of the committee, retired recently. The president is yet to name a replacement for him.
But upon the receipt of the nominations, the Senate said it would not consider them in line with its resolution to suspend all executive confirmation requests for positions not listed in the 1999 Constitution as amended until the Acting Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ibrahim Magu, was removed.
The Senate last week adjourned to January 9 for its Christmas/New Year recess, while plenary session would begin on January 16.

This development has made uncertain the January meeting of the committee, which has operational independence in setting interest rate as well as designing monetary policy for the country.
Speaking in a chat with THISDAY, the Director General of the West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, expressed concern over the development.

According to Ekpo, it would create uncertainty among investors.
He said: “There might not be an MPC meeting because they would not be able to form a quorum and if the MPC does not meet it would send a wrong signal to the international investors because it means that there is still uncertainty in the system.

“The way it is now, we are in a limbo and if MPC does not meet, it means that there won’t be decisive actions on monetary policy. The MPC is the engine room for monetary policy and so if they cannot meet to deliberate on the economy and relevant issues, you increase uncertainty in the system.
“The central bank’s mandate is price stability and it is very crucial in any economy. We have always argued that such delays would always cause problem for us.

“So, my advice is that they should stop this delay because it has adverse effect on the economy. So, even if they have to come back from recess and confirm the MPC members, they should do so.”
However, in his reaction, the chief executive of the Financial Derivatives Company Limited, Mr. Bismarck Rewane, said there was no need for panic.

Rewane expressed optimism that the new MPC members would be confirmed before the next meeting.
He said: “I don’t think that is a problem. There is still time between now and then. The meeting is not until third week in January for the MPC and I believe the Senate would be able to deal with it before then.”

Nevertheless, when reminded that the Senate would resume fully on January 16, Rewane said: “They would postpone the MPC by one or two weeks! I don’t think it is something to panic about.
“In any case, what does the MPC do? Most of the changes in policy instruments have taken place outside the MPC meeting. So, the MPC has become a ritual. So, there is no need to panic.”

The MPC’s objective is to maintain price stability and support the economic policies of the federal government by formulating monetary and credit policies.
The MPC, according to the website of the CBN, shall comprise the governor of the Bank who shall be the chairman; the four deputy governors of the Bank; two members of the board of directors of the Bank; three members appointed by the president; and two members appointed by the governor.