For a stuttering dollar-denominated, consumption-driven and almost solely petroleum-funded economy plus a misunderstood role of central banks the world-over, recourse to attacking the Central Bank of Nigeria (CBN) governor, Dr. Godwin Emefiele, appears logical, fair game. But a more rigorous analysis of micro and macro-economic dynamics in a transitional national economy suggests this is totally wrong.
At a fundamental level, Nigeria’s economy is not worse than most other comparable commodity exporting emerging economies. But as a consequence of opening up the nation’s economy to “all-comers” and dropping all capital controls by the previous administrations, performance of the economy naturally dipped and required proactive interventions to resuscitate it.
It could be recalled that on October 26, 2022, Emefiele, announced that new Naira notes would be introduced to replace the current 200, 500, and 1,000 Naira notes and that the redesign will take effect from Thursday, December 15, 2022. At the unveiling of the new Naira notes at the State House on November 23, 2022, the CBN boss told newsmen that existing notes would cease to be legal tender by January 31, 2023.
Since this policy enunciation and rollout, all hell broke loose as politicians who allegedly nursed shadowy agendas to corner power in just concluded general elections were seriously threatened. Even some state institutions were curiously roped in to achieve the illegal objective of caging CBN’s Emefiele.
Although, the policy spawned tough times for many Nigerians, it gave a glimpse that well enunciated and executed policies could provide the change Nigeria badly needs
Even some unforeseen dimensions kicked-in. Bandits and kidnappers reportedly offloaded huge consignments of currency sensing it would soon become useless to their quirky entrepreneurship. Many of the daily crimes took a break. Although, the policy spawned tough times for many Nigerians, it gave a glimpse that well enunciated and executed policies could provide the change Nigeria badly needs.
But in all of the Machiavellian plots triggered by the policy to unhorse Emefiele on specious, trumped up charges, one fact stood out starkly and ultimately saved the day: President Muhammadu Buhari who appointed the top banker was stoutly behind him. President Buhari has repeatedly assured Nigerian that he wants to leave an economy reasonably stabilised even against the enervating vagaries of the global village.
Coming then before a crucial general election, especially the presidential poll, the currency redesign policy was perceived to have spooked many politicians who saw the new economic footing as potential disruption of their plots to game the election and achieve pre-planned agenda.
Initial moves by even state security institutions, the judiciary and even the federal legislature to hobble the policy, subtly garbed in the borrowed robes of public interests hardly diverted the focus of the CBN boss.
It could be recalled that Reps’ Speaker Femi Gbajabiamila, a protégé of Asiwaju Bola Ahmed Tinubu, unendingly summoned Emefiele to the National Assembly to ‘explain’ the new currency policy. But the perceived subterfuge fooled pretty few Nigerians as they believed other motives were at play.
Ultimately, the Supreme Court proclaimed a specific position on the policy which altered the initial time-lines set for it. The CBN had no choice but comply with apex court as a law abiding institution. The rest is history. Beyond the currency redesign policy the CBN led by Emefiele had birthed several policies within the ambit of its broad mandate to revive the economy and instigate progression. Despite these efforts some believe he was exceeding his brief.
But Emefiele quickly dismisses the notion in some quarters that his interventions are exceeding the boundaries of his Central Banking brief: “The central bank is an entity within the larger entity called Nigeria. So, when you talk about interference, by virtue of the fact that the central bank is putting in place, policies that would help to engender growth, policies that would help to create job, there is no conflict in that and in fact, it has nothing to do with the independence of the CBN.
“The independence of the CBN is enshrined in the amended CBN Act of 2007, and nothing is altering or in any way, affecting the independence of the CBN. When you say your mandate as CBN is price and monetary stability, it must be price and monetary stability that is conducive to growth, conducive to creating jobs and conducive to ensuring that industries remain alive, whereas the primacy of your mandate, which is price and monetary stability remains intact.”
The efforts by the Emefiele-led CBN are clearly yielding considerable results as seen in the trajectory of key macroeconomic indicators, the cyclical recovery of the economy since the 2016 recession. These interventions flow from total commitment and passion of a disciplined turf-player who shares the vision of the administration he serves.
Clearly, strengthening the economic recovery process in Nigeria is not a picnic. As it is, the project is being guided by a patriot who believes in Nigeria, who has unflinching faith in the ingenuity of Nigerians and who holds dear, the promise of the nation’s shared future.
There several critical arenas that the CBN’s interventions made considerable impact. In its determined effort to influence economic stability, some analysts believe that the CBN has intermittently veered into areas that are not its core mandate. It could be recalled that the CBN’s Anchor Borrowers’ Programme, a financing model for small-holder farmers, is part of the Federal government’s efforts to boost the nation’s rice production, supply, and distribution and consumption value chain.
Significantly, the Anchor Borrowers Program (APB) has empowered thousands of rice farmers in the country, while working hand-in-hand with the Rice Farmers Association of Nigeria (RIFAN) to reach the farmers. The CBN in January 2018 said it is determined to make Nigeria one of the largest rice producers and exporters in the world, making her less dependent on petroleum money.
What’s more – the Director-General, Africa Rice Center, Benin Republic, Dr. Harold Roy-Macauley has acknowledged thar Nigeria has overtaken Egypt as the largest rice producer in Africa. The director-general said that Nigeria is now the largest rice producer at 4 million tonnes a year. The latest development is testament to the Federal Government and the CBN’s efforts to vastly improve the production of rice in the country.
According to Roy-Macauley, Egypt was producing 4.3 tonnes annually but production has reduction by almost 40 percent this year, attributed to the Egyptian government decision to limit cultivated to preserve water resources. Persons who worked so hard to kill the local industries like the once booming textile industry, agriculture – especially grains production, fertilizer production among other items that could easily be produced at home, were angered that Emefiele was reappointed for yet another five long years. Understandably, they cried for his blood.
Putting up with Emefiele’s fiscal responsibility demands is clearly unimaginable for them. So, they must discredit the man and his mandate. Many Nigerians know that without Emefiele’s ban on the importation of over 40 items about two years ago, the nation’s foreign reserve would have been completely depleted. His insistence on local production ensured that an assortment of locally-produced rice graces our tables today.
His compelling foresight in banning these items, ensured remnants of our textile factories still exist. His firm restrictions in forex allocation, his preference to finance production rather than consumption has ensured the current revival in the textile industry, agriculture value chain and drastic reduction in importation of grains from all over the world.
To critical industry stakeholders, this unassuming banking sage certainly deserves kudos for keeping faith and demonstrating uncommon commitment and professionalism in a particularly challenging period of the national journey. Governor Emefiele’s track record of unambiguous performance at the nation’s apex bank stands him out as the horse to back in the high intensity apex finance sector.
Little wonder, many were surprised when the conservative President Buhari backed this quietly focused, high-performance horse at the CBN. It could then be validly said that with his silence, Buhari confused his detractors but with his action shocked them to no end.
It is then little wonder that President Muhammadu Buhari reappointed on merit to serve a second, five-year tenure. Emefiele thus emerges the first apex bank boss to serve two terms since the country’s return to democracy, as well as the second such reappointment in the history of the bank. An unusual elite consensus graciously conceded that merit persuaded the president’s swift, executive action.
With little question, Emefiele has admirably deployed governance skills groomed in the stern, high-octane, financial industry, to effectively drive CBN’s command-room, these past eight years. And there have been extreme challenges to booth.