By Kaliba Bilala
One important decision the next president of Nigeria must make is who will head the central bank. That person must comprehend the rot the country is in and the importance of sound money and good governance.
It behoves the president-elect to identify & appoint a competent & credible individual with a reputation for toughness and political independence. For all of President Obasanjo’s failings, many can attest to the institutions he bequeathed to the country, at least what is left of them.
I am an admirer of the late Paul Adolph Volcker. Despite Mr Volcker’s experience in the public & private sector, he would not have been appointed Chair of the US Federal Reserve if President Jimmy Carter had not understood that inflation was a bigger threat to the US economy.
President Carter, against every political instinct, chose Volcker who pointedly told the president of his aversion to inflation & his belief that a tighter monetary policy was urgently needed to fight inflation. Volcker’s rate hikes raised US unemployment rate & cost President Carter a second term in office.
According to Volcker in his memoir, “To his [Carter’s] credit, only once did he express concern about our tightening of policy [at the Federal Reserve]. Years later, on a fishing trip with Carter, I asked him if he thought Federal Reserve monetary policy had cost him the 1980 election, which he lost to Ronald Reagan. A wry smile spread over his face as he said, ‘I think there were a few other factors as well.’ I have a become a strong admirer of the man.” This writer as well.
Paul Volcker laid the foundations for the low inflation which Alan Greenspan, and other Chairs of the US Federal Reserve, built on to grow the US economy. A true measure of a man (or woman) is his (or her) ability to eschew personal gain for the greater good. It is not something that comes easily to people, including yours truly. One hopes the next set of Nigeria’s policymakers recognise and execute their fiduciary duty for posterity. A commitment to deficit reduction, sound money, and good government would be a great start.
