On the 7th anniversary of Godwin Emefiele’s tenure as the Governor of the Central Bank of Nigeria, Kenneth Eze takes a look at how he has been steering the ship of the Nigerian economy at difficult times.
Godwin Emefiele assumed office as the Governor of the Central Bank of Nigeria on June 3, 2014, taking over from Sarah Alade, who acted in that position after Sanusi Lamido Sanusi was removed by the Federal Government, shortly before the expiration of his five-year tenure.
Seven years on, he is on record as the first Governor of the CBN to have gotten a tenure renewal since the advent of the ongoing democratic governance in Nigeria in 1999. He is also the second person, after Sanusi to have climbed the career ladder from being managing director of a lender to the governorship of the CBN in the 22-year-period.
Recall that Sanusi got to that position from being managing director of First Bank of Nigeria, while Emefiele moved up to the same position, from being managing director of Zenith Bank, both first and second generation banks, respectively.
Most likely, he would have been taking time off to reflect on the task of meeting the expectations of the exalted office, while his family and friends might just be clinking glasses. However, ordinary Nigerians are groaning under the burden of economic hardship, with the blame largely laid at his doorpost.
Analysts are divided on the success or level of it, of Emefiele as CBN governor. While some merely use the dwindling fortunes of the Nigerian economy as a yardstick to measure him, others contend that the Federal Government has overall responsibility for the economic wellbeing and prosperity, so should be held accountable for that.
“It would be out of place to hold the CBN responsible for general fiscal policies. Their main responsibility is for the financial industry regulatory policies. So, when the government provides the right fiscal policies, the CBN would come out shining,” Chuka Okonedo, an Investment Banker, who spoke to The Point volunteered on phone.
His observation appeared to be in tune with the position taken earlier by Sam Amuka, Publisher, Vanguard newspaper, in a public forum.
He had highlighted the difficulty of being the CBN governor in an underperforming economy. When the economy was not doing well and government’s sources of income not yielding optimally, yet the government kept resorting to the CBN for money, it would be easy to ‘classify’ the performance of the occupier of that office.
The pressure on government has tasked the system in a way that had seen Emefiele take the flakes for his bosses.
This partly explains why during his first term, he supervised an interventionist currency policy, said to have been at the behest of the presidency, which helped prop-up the Nigerian Naira with a simple strategy of pushing billions of dollars into the forex market.
It also witnessed the introduction of a multiple exchange rate regime as part of efforts to mask pressure on the Naira, which helped to avoid what would have been a series of devaluations for the local currency.
Also, recall that not too long ago, it took the ingenuity of Emefiele to forestall what would have been a major shake-up in the banking industry and by extension the economy, when he botched a boardroom coup d’état at one of the country’s major lenders, First Bank of Nigeria.
Those who know posit that he demonstrated strength of character by that intervention, given the high profile of some of the characters involved in the boardroom melee.
The importance of the intervention is better understood in the light of the fact that FBN is among the banks classified as systemic in Nigeria because of their significance to the economy.
Again, the rescue efforts of the regulator under his supervision, at former Skye Bank which was exposed to toxic loans to the tune of over N900bn is another landmark achievement. The saved lender is now trading under the name, Polaris Bank, with depositors’ funds intact, the banking sector and the economy saved from embarrassment.
Without the astute intervention of the CBN under Emefiele in both instances, the depositors, stakeholders (particularly employees and contractors together with their dependents), etc., and by extension the entire banking system and the economy would have come under strong public scrutiny. Many are of the opinion that this could have shaken the faith of the public in the financial services system in Nigeria.
“These are part of the scores that stand Emefiele out as bringing stability to the banking system and the economy,” an analyst said.
His efforts at steadying the ship of the economy, has yielded the dividend of retaining public confidence in the banking system and the economy, irrespective of rising inflation and other adverse conditions.
Owoade Kukoyi, a management consultant, in a telephone interview with The Point said, “The CBN cannot be blamed for dwindling fortunes that befell the economy. The political class must evolve fiscal policies to complement or prompt monetary policies to stimulate the economy and engender prosperity among the populace.
The CBN governor has a duty to harness the programme or agenda of the government of the day, in tune with acceptable financial regulatory standards. These, in same climes, normally come in the form of electoral promises and fiscal policies.”
He observed that when these simple parameters are lacking, the man on the street would blame Emefiele, who himself takes the flake because he is an unassuming character.
It is also noteworthy that the tenure of Emefiele witnessed the transformation of banking to global technological standards and seen more banking brands hoist the Nigerian flag across the globe, particularly in the African continent.
The CBN governor is appointed for a five-year tenure, renewable only once, as provided for in the CBN Act.
It is the only governorship position in Nigeria attainable by appointment and with a five-year tenure.
Others being the governors of the 36 states, otherwise called executive governors. The citizens of each state, old enough to vote, appoint for themselves a governor, by ballot, for a four-year tenure, renewable only once, as provide by the 1999 Constitution.
However, while the governors are responsible for their individual states, the CBN governor actually oversees the national economy, particularly through monetary policies, being the banker to the government, and with responsibility for supervising the financial sector (commercial lenders and some other financial intermediaries inclusive).
Some are of the opinion that Emefiele is gentleman being rewarded for his civil disposition and loyalty by a political class wary of bringing strong characters to the table, given the circumstances of the exit of his two predecessors in office.
