The Emir of Kano, Muhammadu Sanusi II, has revealed that former Presidents Umaru Musa Yar’Adua and Goodluck Jonathan never pressured him to take any monetary policy decisions during his tenure as Governor of the Central Bank of Nigeria (CBN).
According to Sanusi, Jonathan invited him for a meeting after receiving complaints from members of the private sector over the country’s monetary policy.
Speaking in a recent public address, a video of which SaharaReporters saw on Friday, Sanusi said both former presidents respected the independence of the apex bank despite occasionally expressing concerns about economic policies.
“I worked under President Yar’Adua and President Jonathan. And to be honest, in my years as Central Bank Governor, none of them tried to be overbearing politically,” Sanusi said.
“Yes, they would have issues; sometimes they would talk to me, and I would explain, but never did they try to compel me on monetary policy.”
The former CBN governor recounted a conversation with former President Jonathan during a period of high interest rates, when businesses complained about the cost of borrowing.
According to Sanusi, Jonathan invited him for a meeting after receiving complaints from members of the private sector over the country’s monetary policy.
“He called me for a meeting and said he had received too many complaints about interest rates. ‘Can’t you bring down interest rates?'” Sanusi recalled.
Sanusi said he explained to Jonathan that lowering interest rates under the prevailing economic conditions would require increasing the money supply, a move that would fuel inflation and push up the prices of essential goods.
“I explained to him that only a small percentage of Nigerians have access to credit, but every Nigerian goes to the market. If I bring down interest rates, it is because I have printed money. These companies will have a lower cost of debt, but Nigerians will pay higher prices for food and other goods,” he said.
He added that he asked Jonathan whether it would be fair to make millions of Nigerians pay more for rice, sugar and milk simply to reduce borrowing costs for companies.
Sanusi said he further warned the former president that artificially lowering interest rates would inevitably weaken the naira.
“I told him, ‘If you want me to do it, I can bring interest rates down. What do you want them to be, 5 per cent or 2 per cent?'” he asked.
“When he asked how, I said, ‘I’ll just make money available. But tell me, where do you want the naira? Today, it’s at ₦150 per dollar. Do you want it at ₦250 or ₦300 to the dollar?”
According to Sanusi, Jonathan immediately rejected the suggestion of a currency devaluation.
“He said, ‘No, I don’t want a devaluation.’
“I said, ‘Then you can’t have low interest rates, sir.'”
Sanusi served as Governor of the Central Bank of Nigeria from June 2009 until his suspension by then-President Jonathan in February 2014 following disagreements over allegations involving unremitted oil revenues.
His latest remarks come amid ongoing debates over the Central Bank’s independence and the balance between political demands and monetary policy decisions in Nigeria.
