Swimming in waters of controversies, Emefiele battles on

The governor of the Central Bank of Nigeria, Godwin Emefiele, has been entangled in different controversies and has been under attack recently with the introduction of the cash withdrawal limits among other binding policies, ADELANI ADEPEGBA writes

In a nation where soothsayers are seen as the oracles of the Almighty, not one of them predicted the emergence of Godwin Emefiele as the Central Bank Governor in 2014, after Lamido Sanusi was suspended and eventually sacked as CBN governor. Perhaps they were not on duty when the cosmos was speaking about Emefiele’s future.

Sanusi, the colourful and controversial banker got the boot for misconduct following the conclusion of investigations against him for financial recklessness, fraud, and mismanagement. Before he was relieved of the plum job, he was questioned by the Presidency, but reports said the outcome of the investigation and an earlier report submitted by the Financial Reporting Council informed Sanusi’s suspension and removal by President Goodluck Jonathan.

Ironically, Emefiele, who is serving his second term, appears to be following in the footsteps of his predecessor.

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Emefiele was head-hunted from Zenith Bank Plc, where he held sway as the group managing director. Before his appointment on March 6, 2014, he had spent over 26 years in commercial banking.

Many Nigerians believed his tenure would usher in a new era of discipline and commitment to sound monetary policies at the apex bank.

But the CBN governor unnerved economists with his monetary policies, which were believed to be unrealistic and counterproductive. In its bid to tame inflation, the CBN under Emefiele has been adjusting the Monetary Policy Rate like an unruly bow tie. Experts said the tight fiscal policy was not favourable to the real sector of the economy. Despite the objections and counsel of economists, Emefiele and his MPC members have continued to hike the MPR, much to the consternation of Nigerians.

The maintenance of multiple exchange rates is another contentious trademark of the apex bank. Through this, banks and highly connected individuals in Nigeria are “cashing out,” as they say on the street. They buy dollars at the official rate and sell on the black market at cutthroat rates. There are suspicions that many top CBN directors are part of the racket, which has grown in leaps and bounds since Emefiele took control of the lender of last resort. The fact that bureau de change operators grew from 2,700 in 2016 to about 5,500 in 2021 attests to this.

Though the CBN announced it was discontinuing the sale of forex to the BDCs, the fact remains that the unregistered BDC operators and black marketers are still doing business while the CBN looks the other way.

To assuage public anger, Emefiele promised that commercial banks would be monitored to provide forex for the legitimate use of Nigerians, but most individuals who approached banks for dollars or euros knew it was a waste of time if they expected to get it at the CBN-approved rates. The CBN, however, believed the multiple exchange rates were creative interventionist measures to help small and medium enterprises, investors, and exporters.

Despite criticisms of the CBN’s policies, the governor’s supporters have praised him for the various interventions he implemented, which they credit with stimulating the economy.

Under Emefiele, they said Africa’s biggest economy had recorded significant growth in banks’ credit to the private sector by 92.79 per cent year-on-year to N32.64 billion as of June 2021, up from N16.93bn in June 2014, when Emefiele became the governor. The huge increase in banks’ credit growth was also attributed to the loan-to-deposit ratio policy introduced by the governor in September 2019.

Under the Central Bank’s development finance initiatives, it also reportedly granted N756.51bn to 3,734,938 small-holder farmers cultivating 4.6 million hectares of land. About N120.24bn was extended for the 2021 wet season to 627,051 farmers for 847,484 hectares of land, under the Anchor Borrowers’ Programme. For the Agribusiness/Small and Medium Enterprise Investment Scheme, N121.57bn was disbursed to 32,617 beneficiaries; and for the Targeted Credit Facility, N318.17bn was released to 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Scale Enterprises.

Buoyed by the accolades from farmers who benefitted from loans and the commendations from the President, Major General Muhammadu Buhari (retd.), who believed the CBN governor had contributed significantly to his agricultural agenda, there were speculations that Emefiele wanted to succeed his boss. It began like a rumour, and before long, various shadow groups and praise singers made it their job to make Emefiele the next president.

Regardless of the consequences of his political aspirations for the financial system, the governor was believed to have tacitly encouraged the support groups to canvass his presidential ambition.

Not only that, some groups obtained the N100m All Progressives Congress expression of interest and nomination forms on his behalf. Dozens of vehicles branded with his image were also procured.

To demonstrate that he was indeed serious about his aspiration, Emefiele, through his lawyer, Mike Ozekhome, urged the court to issue an interim order stopping the Independent National Electoral Commission and the Attorney-General of the Federation from disqualifying him from participating in the primary election of his preferred political party. The lawyer argued that no law exempted him from contesting the primary election of any political party as a sitting CBN governor.

The Centre for the Promotion of Private Enterprise described Emefiele’s presidential ambition as a distraction. “It is a troubling development because of the huge reputational risk to the Central Bank of Nigeria and the wider implications for the Nigerian economy. It portends an ominous outlook for the credibility of monetary policy, foreign exchange policy, the management of intervention funds, and the impartial discharge of regulatory responsibilities of the apex bank,” it noted.

The governor of Ondo State, Rotimi Akeredolu, in a statement he signed on May 6, said Emefiele’s action “if unchecked timeously, portends great danger to the fragile economy of the country.”

Akeredolu, a senior advocate and former president of the Nigerian Bar Association, added, “It is difficult to imagine that a person who occupies the exalted and sensitive office of the Governor of the CBN will be this brazen in actualising his ambition.”

Mindful of the implications of the CBN governor’s involvement in partisan politics, INEC said it was reviewing its relationship with the top bank; the commission also said it would no longer keep electoral materials in the custody of the apex bank.

Another senior advocate, Ebun-Olu Adegboruwa, said there was everything wrong, morally and legally with Emefiele’s ambition to become Nigeria’s president. Citing relevant sections of the CBN Act to buttress his point, the lawyer said, “Section 6 of the CBN Act says that the governor of the Central Bank should not pursue any interest that would put him in conflict with his official duties. Bowing to public opposition, the CBN governor later rejected the presidential forms, noting that should he heed the call to run for the presidency, he would use his “own hard-earned savings from over 35 years of banking leadership to buy my nomination forms.”

Nigerians had hardly forgotten Emefiele’s last misstep before he stumbled into another one. In October, the bank announced the redesign of the naira, which was roundly criticised as unnecessary and ill-conceived. He followed this with limits on cash withdrawals for both individuals and corporate organisations. The new policy introduced in early December limited cash withdrawals to N100,000 for individuals and N500,000 for organisations per week. It also directed banks to load only N200 and lower denominations into the Automated Teller Machines. On the heels of the House of Representatives’ resolution that the policy should be suspended, the CBN increased the limits to N500,000 for individuals and N5m for corporate organisations, respectively.

Meanwhile, the CBN governor failed twice to appear before the lawmakers to defend his policies.

In the last few days, Emefiele has also been trending for the wrong reasons. Out of the blue, a House of Representatives member and Secretary of the dissolved Presidential Committee on Reconciliation and Recovery of Stamp Duties Revenue, Gudaji Kazaure, alleged discrepancies in the management of the N89tn in stamp duty charges by the CBN. The Department of State Services has shown interest in the case, but it is too early to know how it will end.

The secret police had filed an ex parte motion before the Chief Judge of the Federal High Court, Justice John Tsoho, seeking an order to arrest the CBN governor for “acts of financing terrorism, fraudulent activities, and economic crimes of national security dimension,” but the application was rejected for lacking sufficient evidence. The CBN spokesman, Osita Nwasinobi, said he had responded “comprehensively” to the allegations against Emefiele and would not talk about it again.

But commenting on the CBN policies, a Professor of Economics at the Olabisi Onabanjo University, Ago-Iwoye, Ogun State, Prof. Sheriffdeen Tella, said that recent policies by the CBN have been unfriendly to the political environment. According to him, there is a need for a proper investigation into the allegations to prevent economic consequences.

He said, “Some of the CBN policies are not very favourable to the politicians in particular. So, there is a need for them to start looking into what’s happening. What’s happening is not good enough for the economy. Therefore, it is important for the governor to re-evaluate this and for the National Assembly to do a proper investigation into the allegations and prevent any negative impacts on the economy.”