Consumerism is a thing to strive for by every business person but when such quality is seen in a public servant, such individuals should be singled out for commendation. That is why I am taking this time out to appreciate Godwin Emefiele, who is the governor of the Central Bank of Nigeria (CBN).
Over the years, Emefiele has shown so much concern for bank customers; he has been consistent in protecting their interests via pronouncements and directives to banks from the issuance of eNaira to reducing bank charges, among others. In many cases, banks have been threatened with sanctions or even sanctioned in some cases when they failed to uphold customers’ rights.
Many have said Emefiele’s consumer-centrism is a fallout of his many years as a banker with his last assignment in that space being as the chief executive of the most profitable Nigerian bank, Zenith Bank. As a banker, he must have seen how customers groaned over incessant bank charges, considering that his most recent activity is the directive on downward review of ATM charges and interbank transfer fees. To that effect, withdrawals on ATMs were reduced from N65 to N35 after the third withdrawal within the same month. Similarly, interbank transfers were brought down to a maximum of N50 per transaction from N300.
The CBN guideline comes with provisions for accountability and responsibility, as well as a sanction regime to directly address instances of excessive unapproved (arbitrary) charges, according to the statement. This is nothing short of a masterstroke to bring some sanity in a system where banks have for long taken their customers for granted.
A notable difference between the Emefiele-led CBN and his predecessors is that customers can now also complain when they feel aggrieved. This is according to a circular recently released on the CBN website. The CBN provided a step-by-step guideline to members of the banking public on how to lodge their complaints to the financial institutions concerned. Where the bank concerned fails to attend to the matter, then it can be escalated to the CBN.
This is, indeed, a consumer protection move that should be emulated by other regulatory bodies across all industries. This will have the effect of upholding standards and improving the consumer experience.
What is particularly interesting about this directive is that the CBN said that it represents “further evolution in the financial industry in the last few years”. The candour displayed here shows that Emefiele realizes that the institution and the financial system itself are not perfect but a constant tinkering will yield a system that will work for economic agents not least of which are bank customers.
Even though there are more solid economic reasons for the introduction of the eNaira, which I will enumerate in a bit, there is however consumerism at the heart of its introduction. The eNaira, which is Nigeria’s digital currency, is a fast, cheap, reliable, and available payment channel that will help lead to financial inclusion.
According to efina.org.ng, “Financial inclusion is the provision of a broad range of high-quality financial products, such as savings, credit, insurance, payments, and pensions, which are relevant, appropriate and affordable for the entire adult population, especially the low-income segment.”
Interestingly, financial inclusion is a major pursuit of the CBN under Emefiele’s watch. Indeed, CBN’s target is to achieve 95 percent financial inclusion by 2024, up from 63.2 percent as of April 2021.
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Now to the sound economic basis for introducing the e-naira. Emefiele recognized e-naira will help the CBN sidestep the international payment system; it has the potential to make the reserve system less effective in controlling the value of the naira; it may facilitate integration into globally traded currency markets with a reduced risk of politically inspired disruption.
Perhaps one of the strongest upsides of the e-naira, since the currency is not pegged to the dollar or any other convertible currency for that matter, is that CBN can ‘print’ as much as possible for settling local obligations; paying up domestic debts, which make up the bulk of government borrowings. It can also have unlimited resources to fund local projects and galvanize the economy. All government has to ensure is to gain trust that it is a legitimate and veritable means of exchange. It was done for the naira; it can be done for the e-naira.
There are yet other advantages for resorting to digital currencies including that it can help the central bank monitor cash flow in real-time and facilitate money supply. It will predict accurately the level of M1 or money in circulation and therefore strengthen CBN’s liquidity management ability.
It will also eliminate the cost of printing money as the extrinsic value of the digital currency is near zero relative to the extrinsic value of paper and metal money. Little wonder that in just 95 days of its launch, the e-naira achieved more than 694,000 downloads with Person to Bank and Bank to Bank transactions making up 90 percent of the transactions.
Seeing these farsighted and integrated policy actions by the CBN, which are impacting positively on the economy, Emefiele may well be reckoned among the best CBN governors Nigeria has ever produced.
Leigh, a financial analyst, writes in from Abuja.
