For his sterling performance and the need to consolidate the economic gains of his first term, President Muhammadu Buhari has reappointed Mr. Godwin Emefiele as Central Bank of Nigeria (CBN) governor for another term of five years.
Emefiele’s reappointment became public knowledge when Buhari forwarded his name to the Senate for confirmation. The apex bank governor’s first term expires next month June, 2019 and to avoid a vacuum because of the sensitive nature of the office, the president promptly wrote a letter to the Senate to clear him for the job.
Emefiele was first appointed by former President Goodluck Jonathan in 2014 towards the last days of his administration. Before now, there were speculations that Buhari may replace Emefiele as he plans to constitute another economic team for his second term in office. All this was put to rest when the Senate President, Dr Bukola Saraki read out Buhari’s re-nomination of Emefiele on the floor of the Upper House.
In the letter, Buhari said: “In view of the expiration of his first tenure as governor of the Central Bank of Nigeria (CBN) in June 2019, and in pursuant to the provision of Section 81 (2) of the Central Bank of Nigeria Act, 2007, I hereby present for confirmation of the Senate, Mr. Godwin I. Emefiele for reappointment as the governor of the Central Bank of Nigeria (CBN) for the final term of five years.”
Buhari expressed the hope that the senators would consider and confirm the nominee in the “usual expeditious manner. Please accept, Senate president, the assurances of my highest order,” the letter stated. Since his assumption of office in 2014, Emefiele has led the apex bank through a rough and challenging economic and business environment where he has evolved viable fiscal and monetary policies to achieve a more stable exchange rate, stronger banking sector and vibrant agriculture industry.
Emefiele leads a CBN that has intervened in the real sector of the economy and other segments, with agriculture, Small and Medium Scale Enterprises (SMEs) and even education receiving special attention. Nigerians Hail Decision, Set Agenda For Emefiele In spontaneous reactions to the president’s renewal of Emefiele’s mandate, economic experts and politicians have praised Buhari for acting in the nation’s interest. Top officials of the CBN were not left out as they commended the president for being proactive and picking the best for the job.
On behalf of the CBN family, the apex bank’s director of Corporate Communications, Mr Isaac Okorafor, said that Buhari’s re-nomination of Emefiele was in recognition of his patriotism and commitment to the development of the Nigerian economy. Okorafor said that in the weeks to come, Emefiele would speak to Nigerians on what to expect in his second term. “However,” he said, “the best way to go in the opinion of the governor is to put capital in the hands of those who can drive the economy through the MSMEs and of course, the real sector to effectively power the economy.”
The general perception among industry watchers is that the interventions by the CBN in critical sectors of the economy, especially agriculture and non-agric based SMEs, would continue with his reappointment. There are expected intensification and effective monitoring of the interventions, in particular, the Anchor Borrower Programme. Emefiele should also focus on ensuring increased access to credit by SMEs and generally fostering a low-interest rate environment with the support of fiscal authorities.”
For The Records
History was made when a letter from President Muhammadu Buhari was read Senate President Bukola Saraki on the floor of the upper chamber, asking the lawmakers to endorse his re-appointment of Godwin Emefiele as CBN governor. The letter from the president titled: ‘Renewal of the Appointment of Godwin l. Emefiele as Governor of Central Bank of Nigeria’ read in part: “In view of the expiration of the first tenure of the current Governor of the Central Bank of Nigeria on June 2, 2019, and pursuant to the provisions of Section 8 (1) and (2) of the Central Bank of Nigeria Act 2007,l hereby present for confirmation by the Senate Mr. Godwin l. Emefiele for re-appointment as Governor of the Central Bank of Nigeria for a final term of five years.”
That move by the president has put an end to speculations that Emefiele might not get a second term in office. Following the announcement, reactions have continued to pour in from economic analysts and market watchers, who believed Emefiele’s return will augur well for the economy.
Reappointment of Emefiele points to policy sustenance, especially on exchange rate, interest rate and other key planks to monetary policy. In particular, his position that the Naira should not be devalued based on evidence of counterproductive outcomes of past devaluations is likely to be sustained. This possibly could have been different with a new person in that office who would have pandered to the typical policy cocktail of the Breton Wood institutions.
Many believes, Emefiele’s reappointment is good for the economy. “The systematic sectoral interventions that he initiated would be continued and this should eventually change the narrative of the Nigerian economy. That is the way to increase the speed of an economy that has been growing in the last two years but not fast enough.”
CBN under Emefiele has been independent, whether in terms of policy, instruments or spending. Seeing the rationale for and the fact that most of the policies of the apex bank are driven by evidence-based research, I see an increasingly independent Central Bank under a reappointed Emefiele,” the economist also said.
“Moreover, while the CBN has engaged in subsidised lending schemes to specific strategic sectors, Nigeria’s economy is in need of a much more holistic, broad-based lending recovery. Unless aggregate private sector credit recovers, it is unclear that Nigeria will be able to achieve accelerated growth. Important policy trade-offs may be required.
Given its low levels of savings, Nigeria will still be reliant on foreign inflows to support investment. Creating the conditions for sustained confidence and increased long-term direct investment will be important.
Under Emefiele’s leadership, the CBN has recorded many feats, notably attributed to his uncanny ability to think outside the box when faced with the most difficult situation.
At a time when Nigeria was at a crossroads, Emefiele as the CBN governor, proved its mettle. He drove the apex bank to rise to the occasion to bring the economy out of crisis and forestalled another one. For instance, he held forth on the economy, when there was a lacuna on the fiscal side, as a result of president’s delay in the appointment of his ministers, particularly the finance minister, for six months.
It was to his credit that the apex bank defied the odds and barred importers of certain 41 items from accessing foreign exchange from the interbank market, which helped to avoid depletion of the foreign reserves. The 41 items were later increased to 43.
This bold step by the CBN later turned out to be the saving grace for the economy as it helped in bolstering the economy during the recession it entered into in 2016, and gave it the fillip to exit same. Emefiele sometime last year said the bank’s restriction of foreign exchange access to 41 import items in 2015 was in national interest as it helped to save the economy from collapse.
(CBN), Godwin Emefiele would have completed his first tenure in office and will be due for either a tenure renewal or replacement by the government.
Nigeria’s regulatory bank chief executive is appointed for tenure of five years in the first instance and could be due for renewal, depending on the disposition of the president of the country at the time.
Historically, not many past governors of the apex bank had enjoyed a renewed tenure either due to the instability of government or some other political factors which are beyond the performance rating of the governor.
For instance, the last three governors of the bank from, Joseph Sanusi, Charles Soludo and Lamido Sanusi spent only five-year tenure each as the head of the regulatory bank and were replaced as soon as they completed their term in office.
At the advent of civil rule in 1999, President Olusegun Obasanjo appointed Joseph Sanusi an ex-chief executive officer of First Bank to head the apex bank after the controversial exit of the former occupant of the position, Paul Ogwuma. Sanusi served only five years tenure in spite of optimism that his tenure would be renewed by Obasanjo.
By 2004, which coincide with the second term of President Obasanjo as civilian government and an era the administration economic agenda shifted from recovery to consolidation, Professor Charles Soludo, who until his appointment in 2004 served as chief economic adviser to the government came on board.
Again he too was replaced with Lamido Sanusi, from his seat as the chief executive officer of First Bank by the late President Umaru Yar’adua. Not necessary as a result of his non-performance as usual, but for reason of politics and other factors.
It was during the tenure of Soludo that the country’s banking underwent a reform process that saw their capital base leap from meagre two billion naira to twenty-five billion naira minimum capital.
The controversial consolidation of the banking industry also led to the reduction in the number of commercial lenders from around 89 to 25 at the end of the reform programme which lasted for 18-month. The banking reform was marred by controversy because many people believed that some bank chiefs had prior knowledge and took advantage of their closeness to the CBN governor to outshine their competitions.
Many people believed that Soludo failed to get tenure renewal as a result of his ultra overzealousness in driving a currency reform that would have seen Nigeria naira redenominated.
His proposal to redenominate the currency backfire as a result of the fact that he was said to have announced the proposal without due consultation with the sitting president, who considered it as an affront on his authority.
By June 2009, President Yar’adua brought on board Lamido Sanusi, who is now the Emir of Kano, a throne he has consistently converted. Sanusi era at the regulatory bank ended when the then President Goodluck Jonathan suspended him from office and appointed the then deputy governor monetary policy, Sarah Alade in an acting capacity.
Sanusi is also as controversial as they come; before he was butted out of the apex bank, he had embarked on a stress test for some leading commercial lenders, which equally led to the removal of chief executives of nine banks after the stress text report showed that the bank’s capital base have been eroded.
The CBN removed the chief executives of the then Intercontinental Bank, Bank PHB, Afribank, Oceanic Bank, Finbank, Union Bank and Equatorial Trust Bank, Spring Bank and Wema Bank. The apex bank however, came short of taking over the management of Wema Bank as was done to the remaining eight banks.
The regulatory bank also injected about 400 billion naira in new capital to strengthen the banks, which its audited report showed some of them have accumulated margin and other loans in excess of 500 billion naira, thereby impacting negatively on their operations.
However, it was not the sacking and taking over of the eight out of the nine banks that led to the removal of Sanusi from office by the then President Jonathan. Sanusi at some point claimed that about $20 billion was missing in the accounts of the country’s cash cow, Nigerian National Petroleum Corporation (NNPC).
According to Sanusi, the state-run oil giant refused to remit that amount into government accounts and the same amount could not be traced in any of the corporation’s accounts.
The claim by the CBN governor jolted the government of President Jonathan who was desperately seeking a second term in office while the opposition party then was lashing at the negative news of missing money to sell itself to Nigerians as an alternative.
Eventually, Sanusi tenure expired during his suspension period and a replacement was found in the present CBN governor, Godwin Emefiele, who was plucked from Zenith Bank.
In almost the last four and half years, Emefiele, an economist and a banker has survived many intrigues, especially after the defeat of President Jonathan by President Muhammadu Buhari in the 2015 general election.
With the coming in power of the All Progressive Party’s (APC), a number of people, especially from the now ruling party had called for the removal of Emefiele after revelations of graft by the last administration started coming into the open.
Many believed that there was no way the regulatory bank’s chief executive would not have been privy to the massive withdrawal of huge money belonging to the government without the knowledge and express approval of Emefiele.
Like a cat with nine lives, Emefiele survived the politics of his planned removal momentarily.
Again, agitation for his removal from office also reached a crescendo in the period between 2016 and 2017 when Nigerian naira face critical attack from speculators, causing the local currency to depreciated rapidly.
At some point, the naira fell to 550 naira to the dollar on the black market and it was like the governor and his term were not competent to rescue the currency from further humiliation.
In spite of various calls for the CBN to officially devalue the naira and float the currency, the CBN governor stuck to his gun and chose to intervene in the foreign exchange market and introduced capital control measures to curb the naira hemorrhage.
However, he was able to silence his adversaries after the introduction of the Investor’s and Exporter’s foreign exchange window in April 2017 and his consistent retention of higher monetary policy rate to curb inflation and reduce pressure on the local currency.
I&E forex window, which allows both investors and exporters to price dollar at what they considered the market rate, has brought great relief to the forex market and ensure rear stability of the local currency in the last two or so years.
Even though Emefiele could not be considered as a reformer, his tenure has brought a great relief to the banking industry and its managers. Apart from the takeover of defunct Skye Bank and the establishment of Polaris Bank as a bridge bank to carry on the operations of its precursor, Emefiele has remained amenable to bank chief executives and provide support for those who need capital support to remain afloat.
His monetary policy stance has remained tight in view of the fluctuating prices of crude oil, Nigeria’s main economic stay in the international market. Through the tight monetary policy, Emefiele has been able to drive down inflation rate from over 18 percent to 11.44 percent as at the end of last year.
In spite of the seemingly success of his tenure, many analysts including the presidential candidate of the main opposition People’s Democratic Party (PDP) considered Emefiele dovish policy as weak and responsible for the country’s slow economic growth.
In his recent trenchant criticism of Emefiele, from available records, no CBN governor has been able to get tenure renewal since the advent of democratic rule in 1999.
In the case that Abubakar wins the February 16, election, Emefiele should be sure that he stands no chance of getting a renewal. Again, from all indications even with President Buhari returning for a second term, the CBN governor would also not likely get a second term nod.
Nigeria should then be looking forward to a replacement of the present CBN governor come June 19, when his five years tenure will come to an end all things being equal.
Who the next apex bank governor would be would definitely be determined by varieties of factors, which will include politics, economic and even geo-political consideration.