BY ROTIMI DUROJAIYE
The Governor of the Central Bank of Nigeria, Godwin Emefiele, was taken into custody at the weekend by the Department of State Services, hours after President Bola Tinubu suspended him from office.
“The Department of State Services (DSS) hereby confirms that Mr. Godwin Emefiele, the suspended Governor of the Central Bank of Nigeria (CBN), is now in its custody for some investigative reasons,” Peter Afunanya, the spokesperson for the agency, said in a press statement he shared with journalists on Saturday.
Afunanya did not provide details of when and how Emefiele was arrested and where he is being kept. However, it was learnt that the banker was picked up from his home in Lagos and then flown to Abuja guarded by a detachment of operatives. He was then driven to the DSS’ headquarters in the Asokoro District of the nation’s capital when sources said he was being quizzed.
There were speculations on Friday night that the DSS arrested Emefiele shortly after he was suspended. But the law enforcement agency tweeted Saturday morning, saying the top banker was not in its custody.
On Friday evening, Tinubu ordered the immediate suspension of Emefiele from office as the governor of the CBN. He was made to hand over to the deputy governor in charge of operations, Folashodun Shonubi.
There’s usually no way back for a suspended CBN governor in Nigeria. Emefiele himself was appointed in 2014 following the suspension of then CBN Governor, Sanusi Lamido by President Goodluck Jonathan. His reappointment in 2019 saw him become the first CBN governor to secure two terms in over two decades.
Section 11 of the CBN Act, 2007 gives the President power to terminate the appointment of the apex bank governor, but such must have the backing of lawmakers.
“The CBN governor can be removed by the President provided that the removal of the governor shall be supported by two-thirds majority of the Senate praying that he be removed,” the section stated.
The Act also states that the governor, deputy governor, or director of the CBN can be removed if they are serving as a lawmaker or a director of a bank.
“A person shall not remain a governor, deputy governor or director of the Bank if he is a member of any federal or state legislative house; or if he is a director, officer or employee of any bank licensed under the Banks and Other Financial Institutions Act.”
The CBN Act further states that criminal offences and mental health conditions can result in the CBN governor’s termination of appointment.
“The governor, deputy governor or director shall cease to hold office in the Bank if he becomes of unsound mind or, owing to ill health, is incapable of carrying out his duties: is convicted of any criminal offence by a court of competent jurisdiction except for traffic offences or contempt proceedings arising in connection with the execution or intended execution of any power or duty conferred under this Act or the Banks and Other Financial Institutions Act,” the Act adds.
The governor can also be removed if he “is guilty of a serious misconduct in relation to his duties under this Act; disqualified or suspended from practising his profession in Nigeria by order of a competent authority made in respect of him personally; becomes bankrupt.”
“Even when his policies fell flat on their face no one could hold him to account”
Emefiele’s fall from grace is telling. He has gone from the all-powerful figure who decided who got Nigeria’s scarce dollars or benefitted from trillion-naira CBN intervention funds by the stroke of a pen, to a man suspended from work and being investigated over allegations of money laundering and terrorism financing.
The suspension of the emperor, as he is referred to by several bankers due to the imperial way he ran the monetary affairs of the country, is being interpreted as the latest move by President Tinubu to sanitize monetary policy.
Under Emefiele, Nigeria has operated a multiple exchange rate system that has sowed confusion among foreign investors and starved the country of dollars. The practice drew the criticism of Tinubu who used his inauguration speech to call for its end.
Fixing the broken foreign exchange market in Nigeria is seen as a crucial step in attracting foreign investment back to Africa’s largest economy. But for many investors, Emefiele’s removal as CBN governor was just as crucial.
The CBN’s management of the currency had created room for arbitrage and corruption, with the parallel market premium averaging N65.8/$ over the official rate between 2015 and 2021, much higher than the N5.1/$ premium between 2004 and 2014.
Emefiele’s suspension is likely to now pave the way for a market-reflective official exchange rate. That will be followed by a narrowing of the wide gap between the official and parallel market rate.
Apart from his failed attempt to run for presidency which would have pitted him against Tinubu in the battle for who represents the ruling APC party, Emefiele did little to endear himself to Tinubu.
Tinubu had during his campaign accused Emefiele of trying to scuttle his chances of winning the elections by going through with a naira redesign policy that mopped up cash in the system and stoked anger towards the ruling party.
Emefiele’s relationship with Tinubu’s predecessor, President Muhammadu Buhari, was quite the opposite.
Emefeile’s unorthodox monetary policies were supported by Buhari whose orders he followed by resisting calls to allow the naira to weaken after a crash in oil prices hammered petro-currencies.
Emefiele’s tenure, which began under former President Goodluck Jonathan in 2014, has been characterized by an unprecedented rise in inflation and collapse in the value of the local currency.
Nigeria’s headline inflation went from 8 percent when Emefiele first assumed office as governor in 2014 to as high as 22 percent as at April 2023, according to National Bureau of Statistics data.
It was under his watch that the CBN violated its own law by giving the government more loans than the law permitted thereby stoking the inflation he was trying to curb.
The CBN’s loans to the government otherwise known as ‘Ways and Means’ jumped from N790 billion in May 2015 to N23.7 trillion in 2022.
Between 2021 and 2022, the CBN’s loans to the government went from N17.5 trillion to N22 trillion which means some N4.5 trillion was added in 2022. That’s almost at par with the total revenues earned by the government for the whole year when the figure should never exceed five percent of public revenue, according to the CBN Act.
Curious policies like the restriction of importers of some 42 items from accessing dollars at the official market all but served to expose his warped ideas about monetary policy.
He resorted to suppressing demand for dollars when the expectation was for him to seek ways to improve dollar supply.
Even when his policies fell flat on their face no one could hold him to account. The bankers never criticized or questioned him, not even when he would routinely debit them for breaching a rigged lending guideline that required them to lend 60 percent of customer deposits.
The banks were also subjected to one of the highest Cash Reserve Ratios in the world at an effective rate of around 40 percent. Despite being unable to do business with as much as 40 percent of total customer deposits, the bankers never openly challenged him, preferring to speak to the media off record instead.
His time as governor has also coincided with an increasing lack of transparency at the apex bank which has not published its financial results since 2018.
An economist, Ade Dayo, said the suspension was expected, adding that the Nigerian economy suffered under Emefiele.
He said that the monetary policies postulated by Emefiele made many Nigerian businesses shrank and gasped for air.
“It was expected that the new President would let him go. See the gruesome way he (Emefiele) handled the naira redesign policy. Many businesses were shut down during that period. All the pleas from economists, analysts and social critics fell on deaf ears. He was fixed on only doing his bidding.
“Whoever is going to take over after him should be one who listens and is devoid of partisan affiliation. The office of the governor of the CBN is not a political office.
“A thorough probe should be instituted and a competent person made to man the position,” Dayo said.
Another economist, Usman Musa, noted that the suspended CBN governor did not handle the economic issues affecting the nation wisely.
He added that there were many accusations of partisanship regarding Emefiele, but he failed to address the issue as he should.
Musa said, “The economy of this country suffered under Emefiele. Surprise is the last thing I feel hearing the news of his suspension. He should be thoroughly investigated, especially as regards the naira redesign policy. Where are the new notes he said he printed?
“Emefiele completely failed in his duty. He did not concentrate on his core mandate of price stability as the apex bank’s governor. We are talking of an inflation rate of about 22.24 per cent or more and an exchange rate nearing N800 per dollar. Who should be held responsible for all these woes if not him?”
The Director and Chief Executive Officer, Centre for the Promotion of Private Enterprise, Muda Yusuf, said the suspension did not come to him as a surprise.
Yusuf said the President had made it known during his campaign that he did not agree with some of the policies of the CBN governor.
He said, “Emefiele came up with a lot of policies that have not worked well for the economy and Tinubu singled out the exchange rate management, the forex policy and expressed displeasure about the naira redesign. He was very clear about his condemnation of it, and that the policy was too harsh for the citizens.
“It was also clear that the policies of Emefiele were not compatible with that of the President, so if this has happened, I will not be surprised. Their monetary policy beliefs are fundamentally different.”
A policy analyst, Suraj Oyewale, said Emefiele’s performance as governor of the apex bank had fallen below expectation, adding that many Nigerians would be happy to see him leave office.
“The general consensus is that the performance of the economy under Emefiele has been less than impressive, especially the naira redesign policy, which was not well thought out. I’m sure many Nigerians will be excited to see him leave,” he said
Oyewale, however, said it was the second time in 10 years that a sitting CBN governor would be suspended by the President and feared that the trend might weaken the independence of the CBN.
“Subsequent governors may become a pun in the hands of the executive for fear of being sacked and will be unable to take tough decisions that will favour the economy,” he added.
A lecturer and political analyst, Ganiu Bamgbose, said the President made a great decision by suspending the CBN governor, whom he accused of holding the country hostage economically.
He said, “I think the President as the Commander-in-Chief of the Armed Forces is at liberty to choose who is returning and whosoever he wants in his space.
“As a president, who is prepared to lead the country to success, he could have seen what no one else sees. In this case, as the Commander-in-Chief of the Armed Forces, he knows who is suitable for a post and who is going to make his administration successful.
“Emefiele should have been relieved of the job earlier than this. Isn’t it ridiculous that the CBN suddenly told us that there was no money to sustain the change of currency, which brought so much agony and hardship to the country about five to six months ago?”
A political analyst, Kamilu Fage, said it was surprising that the President left the CBN governor in office for some time after the swearing-in despite several infractions Emefiele committed prior to the election.
“Given what Emefiele did with the scarcity of naira, I am surprised that the President left him in the office till now given all he did during the naira crisis,” he said.
Senior Special Assistant to former Vice President Yemi Osinbajo, Laolu Akande, called for a thorough investigation of Emefiele.
Responding to Emefiele’s suspension in a tweet on Saturday, Akande stated that it was high time the CBN governor faced investigation.
Akande stated, “It was about time the CBN Governor faced suspension and an accompanying investigation.
“All people of goodwill and those who value integrity, irrespective of political leanings, would be thankful for this development. Emefiele was given a long rope and fair consideration, but he failed to redeem himself.”
The former spokesman added that Emefiele’s shenanigans and the colossal damage he perpetrated at the CBN was to the utter detriment of the Nigerian people.
“This is not even about cashless policy but apparent corruption in the dual foreign exchange policy and the arbitrage. What a sigh of relief,” he stated.
However, a human rights lawyer, Inibehe Effiong, said the suspension of the CBN governor was not in accordance with the law, adding that Emefiele could not be removed by the President without recourse to the law.
He said, “It is quite a controversial issue. Ordinarily, by virtue of Section 11 of the CBN Act of 2007, the cessation of office of the CBN governor for misconduct on account of the decision of the President can only be through removal, which has to go through the Senate and two-third of members must give their concurrence before the CBN governor can be removed. That statutory position is enshrined to guarantee the institutional independence of the CBN.
“I personally believed that Emefiele should not remain in office; he has committed several infractions, and I am not comfortable with the way he led the bank; however, on the basis of law I do not think the President can remove the CBN governor without recourse to the Senate.”
A Senior Advocate of Nigeria, Norrisson Quackers, said the President had the constitutional right to give the directive, stating that the suspension could not be questioned.
Quackers added that Emefiele had overstayed the five-year statutory period he was supposed to use in office according to the CBN Act, adding that Tinubu’s body language towards the suspension could eventually result in a further dismissal of the governor.
“He should be thoroughly investigated, especially as regards the naira redesign policy. Where are the new notes he said he printed?”
An economist, Sheriffdeen Tella, said Emefiele should not see his suspension as shocking, having thrown the economy into domestic shocks through inconsistent policies, some of which led to the death of some Nigerians.
He said, “The suspension should not be surprising even to himself. He has over time thrown the economy into domestic shocks through policy inconsistency and summersaults without an apology to anybody, even to the government he is embarrassing.
“The last ditch was the twin policy of cashless economy and currency redesign that resulted in the death of Nigerians, collapse of businesses and loss of faith in banking services.”
Another Senior Advocate of Nigeria, Mike Ozekhome, said Tinubu had the right to suspend Emefiele, adding that the term suspension was just a euphemism for dismissal.
He stated, “The President has all the right to suspend the CBN governor despite the independence of the apex bank. He can do so under the CBN Act. He is the overall boss and President of Nigeria.
“This is what we call the transient nature of power. Before Emefiele, there was Sanusi. The position is not hereditary. He who has the power to appoint can suspend. It is Tinubu’s right and prerogative to suspend the CBN governor for any infraction. He acted in line with the law. It is not illegal.
“Someone must have been appointed to act in his place so there is no illegality there.”
It was gathered that the DSS may likely approach the court on Tuesday to obtain an order to keep Emefiele in its custody for as long as his interrogation will last.
A source in the DSS reportedly confirmed that the secret police would likely approach the court to obtain an order to detain the suspended CBN boss for an indefinite period to allow for unfettered interrogation.
“He (Emefiele) is going to be with us for some time. We may obtain a court order to further detain him. The previous charges against him are there and further investigations may add to that. You know that he is a big man, and we have to make sure that the loose ends are tightened before we take him to court.
“Recall that we were looking for him before his suspension. Now that we have him, we will hear from him; hear what he has to say on those issues we have highlighted before,” the source stated.
The source added that the DSS had assembled a team of crack interrogators to quiz Emefiele on wide ranging issues, including alleged terrorism financing and mismanagement of the economy and the apex bank.
“We have a team of interrogators, who are going to quiz and obtain statements from him. We won’t bungle our case. But honestly, Nigerians need to know what happened and why we were looking for him the other time,” the source added.
Emefiele repeatedly got away with murder but the chicken may have finally come home to roost for him.
