Why CBN can’t present budget to N’Assembly – Sanusi.

Why CBN can’t present budget to N’Assembly – Sanusi.

The Governor of the Central Bank of Nigeria, CBN, Mallam Lamido Sanusi, has said that the apex bank cannot present its annual budget to the National Assembly at the beginning of each financial year because it does not know how much the bank will spend each year.

Speaking at the 17th Annual Seminar for Finance Correspondents and Busi-ness Editors, in Akure, Ondo State, on Wednesday, Sanusi, who was represented by an executive board member of the bank, Prof. Sam Olofin, said for this reason, the CBN only presents its budgets to the National Assembly after implementation and not before.

“The CBN budget is not static but dynamic so it is not possible that the bank will present its budget to the lawmakers before its implementation because it does not know how much it will spend at the beginning of each year itself,” Olofin said.

Olofin, who spoke on the topic, “A talk on the independence of the Central Bank of Nigeria”, said that the CBN could not know its budget sum ex-ante (before implementation) because it could not possibly know how many banks it might need to bail out and how much mopping up it would need to do, after each ‘inappropriate spending’ by the government.

“For this reason, the CBN can only and does only present its budget to the National Assembly postante (after spending) and only for the purpose of information and not for approval,” he explained.

He added that Section 3 of the CBN Act 2007 gives the apex bank goal independence (to set monetary policy goals); management independence (to hire and fire) and operational independence (to determine what policy instruments to employ), and that this should not be altered.

Rather, he advocated that provisions of the section should be enshrined in the Nigerian constitution to avoid a case whereby it would be amended arbitrarily. He explained that the CBN autonomy had never been absolute, as the bank is accountable to the Presidency, as it gives regular reports on what it is doing to the National Assembly, as it gives a report to the lawmakers at least twice every year, and to the general public through the press. - national mirror.
**********