Leaders have integrity and never compromise it. Integrity is defined as your moral compass, the ability to judge between what is right and wrong and act accordingly. This is what Godwin Emefiele, governor Central Bank of Nigeria (CBN) personifies.
As CBN governor, Emefiele has maintained the integrity of the apex bank in terms of its own side of the framework of economic management through monetary policy. So in terms of monitoring cost, availability and supply of money within the economy, Emefiele has been wonderful, entrenching stability and engendering economic development in Nigeria.
His focus has been to make the CBN work within the context of its enabling Act to deliver value that ensures the sustainable growth of the Nigerian economy and win the country away from consuptioon. So the CBN continues to maintain sound financial structure, promote monetary stability, safeguard the value of Naira and stable exchange rate, proving to be a financial adviser to the federal government in the areas of price and exchange rate management, development financing, building foreign reserves and employment creation.
With his re-appointment by president Muhammadu Buhari in 2016, he introduced various intervention funds to control market failure within the economy. The CBN under his leadership has been resolute at ensuring economic growth and financial stability through strategic policies that will move Nigeria away from consumption to production through critical interventions and policies such as import susbstitution . In promoting import substitution through development financing, CBN rightly removed some 43 imported goods from the list of some items valid for Forex Exchange in the Nigerian Foreign Exchange Market.
Equally, it has consistently resisted the pressures to return to “staggering and undulating foreign exchange rate in relation to the naira due to pressures by speculators, bettors, round-trippers and rent-seekers.
It is such policies that have helped the CBN to navigate the Nigerian economy through economic challenges such as economic recession/stagflation, COVID-19 pandemic, interest rate issues, foreign exchange rates, external reserves, exchange rate, financial inclusion and the gap in the agricultural value chain.
For this reasons, Forbes Media New York earlier in May this year honoured the CBN governor with the Forbes Best of Africa Lifetime Achievement Award.
Forbes in partnership with Foreign Investment Network, FIN, also issued Emefiele with its certificate of distinction.In its letter of award to Emefiele and signed by the President, Customs Solutions Media for Forbes Media, Mr Mark Furlong, Forbes disclosed that it decided to honour the CBN governor on the grounds of his remarkable performance and pace-setting achievements at the apex bank.
“It therefore comes as no surprise that you have brought the same ‘can-do’ spirit to your job as Governor of the Central Bank of Nigeria. Although you took over at the CBN in 2014 when the economy was already in the doldrums, the naira weak, oil price falling and Nigeria’s foreign reserves at a very low ebb, three years later you have recorded appreciable progress in salvaging the economic fortunes of your country.
“In keeping with your vision to “…create a people-centered Central Bank by delivering price and financial system stability and promoting sustainable economic development,”
Curiously, at this time that Emefiele is being recognized that the Nigerian Senate is planning to cut down the autonomy of the CBN and thunder down the Nigerian economy.
On 27th September 2022, the senate passed for a second reading a Bill to amend the Central Bank of Nigeria (CBN) Act, 2007. The Bill is clearly meant to whittle down the powers of the Governor of the Central Bank of Nigeria (CBN).
The proposed legislation was sponsored by Senator Sadiq Suleiman Umar, who is representing Kwara North Senatorial District at the National Assembly. The senator, in his lead debate, sought an amendment to the Central Bank of Nigeria’s (CBN) Act No. 7 to remove the powers of the governor from determining the appointment of anyone into the services of the apex bank.
Umar proposed that the new Chairman of Board of the Central Bank should have powers to determine salaries and allowances of members, while the governor focuses strictly on administrative duties in the running of the bank.
The senator further argued that the board should be responsible for the annual budget of the bankers’ bank which he said is the global standard.
He said: “A bill for an Act to amend the Central Bank of Nigeria (CBN) Act No. 7 of 2007 to enable the appointment of a person other than the governor as the chairmen of the board, divest the board of the powers of determining and fixing salaries and allowances of its members.
At that day’s plenary, the Bill having passed the second reading was referred to the Senate Committee on Banking, Insurance and Other Financial Institutions for further legislative input. The committee is expected to report back in four weeks.
The Bill focuses on three issues. First, the appointment of an outsider as the chairman of CBN Board of Directors; second, fixing the remuneration of board members . Third is the approval of annual budget to be submittesed to the National Assembly (NASS) for consideration.
Analysts say with regard to the three issues above, the Senate seem not to appreciate the sensitive and unique role of a central bank in the economy. They add that this proposed amendments seek to erode the bank’s operational independence contrary to the existing section 1(3) of CBN Act 2007 which states “——the Bank shall be an independent body in the discharge of its functions.”
An economist Dr Taiwo Babalola of Babcock Univeristy say the senators are acting in ignorance, pointing out that they want to completely destroy foreign investors confidenc e in the Nigerian economy.
“Tell me, which foreign investors will bring his money to a clime where the central bank is under the control and manipulations of politicians? Those people are rascals like a man who wants to set his house on fire because a rat has entered there. Why should you plan to push the nation’s economy into disaster in an attempt to destroy the sacredness of an institution just because you have a vendetta agenda against take the present occupant of the office? What are they saying the CBN has done that they want to take the autonomy away?”
Dr Babalola explains that the problems of inflation and foreign exchange crisis come from fiscal failure and failure on the part of the National Assembly, of which the Senate is a part. He adds that the debt burden on Nigeria which the Senate helped create through their lack of principled stance to interrogate the reasons for huge loans.
He referred to the 2020 Macroeconomic Outlook of the Nigerian Economic Summit Group (NESG). He disclosed that in the NESG stated at that time that Nigeria’s mounting debt profile was a major concern despite the country’s $900 billion worth of dead capital in property and agricultural lands. He argued that while borrowing may be inevitable, especially at a period like this, there are serious concerns at the rate these debts are being piled up. Aside the fact that the funds are not being deployed into projects that generate income, borrowing should not be done in such a way to mortgage the future of the country and its sovereignty. Dr Babalola said.
“Is it Emefiele that approved unsustainable loans for President Muhammadu Buhari? Is it Emefiel that help put heavy debt burden on Nigeria,with 80 of our earnings going for debt servicing? Are they not knowledgeable enough to know that CBN is not responsible for fiscal policy and trade policy?
Mr Abiodun Shopitan, a former director in the CBN believes some elements in the Senate are on a vendetta mission. “We need a high power Central Bank autonomy. That autonomy should not be taken away. the National Assembly shouldn’t throw away the baby with the birth water. Amending CBN Act 2007 is unnecessary. Just because of one man they want to destroy the entire Nigerian economy. That is a no, no, for any sane mind.”
In the opinion of Mr Ganiyu Ogunleye, a former top brass of the CBN, the apex bank currently exercises its regulatory and supervisory independence under the provisions of BOFIA, 2020 Institutional Independence: entails security of tenure of executive management, governance structure composed of experts, freedom to conduct monetary policy as well as open and transparent decision-making process while Budgetary Independence: involves insulation from political pressure, freedom to staff the agency and prompt response to imminent financial sector crisis but subject to clear accountability framework.
“The CBN Act 2007 has provisions to ensure institutional and budgetary independence which should not be tampered with. It should be emphasised that budgetary independence is critical to any central bank’s ability to exercise the three other dimensions of its independence. Neither its lender of last resort role nor its financial system stability mandate can be effectively executed without budgetary independence. Regrettably, the proposed amendments by the Senate will effectively erode CBN independence. It is therefore, recommended that the Senate should let the four dimensions of independence enunciated in this contribution guide its deliberations. The lawmakers are urged to appreciate that the four dimensions of central banks’ independence are internationally accepted, and Nigeria should not be an exception.”
These men of intellect are right indeed that CBN autonomy should not be tampered with. The apex bank has done quite a lot in the areas of intervention funds in its quest to wean Nigeria away from consumption to production and employment generation. Currently, the CBN has 37 intervention funds targeted at stimulating the economy and addressing the issue of unemployment.
The CBN under the leadership of Emefiele introduced various interventions, which were born out of market failure and other critical issues within the nation’s economic space, according to Osita Nwanisobi, CBN’s acting director, corporate communications department.
Now let us take a look at some of Emefiele key achievements so far revealed that the country has recorded significant growth in banks credit to private sector by 92.79 percent year-on-year to N32.64 billion in June 2021 from N16.93 billion in June 2014, when Emefiele became the governor of the CBN.
The huge increase in banks credit growth was driven by the policy of Loan to Deposit Ratio (LDR), which the CBN under the leadership of Emefiele introduced in September 2019.
Under the Emefiele’s led Central Bank’s development finance initiatives, the Bank granted N756.51 billion to 3,734,938 small holder farmers cultivating 4.6 million hectares of land, of which N120.24 billion was extended for the 2021 Wet Season to 627,051 farmers for 847,484 hectares of land, under the Anchor Borrowers’ Programme (ABP); for the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS), the sum of N121.57 billion was disbursed to 32,617 beneficiaries; and for the Targeted Credit Facility (TCF), N318.17 billion was released to 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Scale Enterprises (SMEs).
Also, Under the National Youth Investment Fund (NYIF), the Bank released N3.0 billion to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs. Under the Creative Industry Financing Initiative (CIFI), N3.22 billion was disbursed to 356 beneficiaries across movie production, movie distribution, software development, fashion, and IT verticals.
The CBN under the N1.0 trillion Real Sector Facility, released N923.41 billion to 251 real sector projects, of which 87 were in light manufacturing, 40 in agro based industry, 32 in services and 11 in mining.
On the N100 billion Healthcare Sector Intervention Facility (HSIF), N98.41 billion was disbursed for 103 health care projects, of which, 26 are pharmaceuticals and 77 are in the hospital services. Similarly, the sum of N232.54 million was disbursed to 5 beneficiaries under the CBN Healthcare Sector Research and Development Intervention (Grant) Scheme (HSRDIS) for the development of testing kits and devices for Covid-19 and Lassa Fever.
Under the National Mass Metering Programme (NMMP), N36.04 billion was disbursed to 17 Meter Asset Providers, to nine (9) DisCos, for the procurement and installation of 657,562 electricity meters. On the Nigerian Electricity Market Stabilization Facility – 2 (NEMSF-2), the CBN released N120.29 billion to 11 DisCos, to provide liquidity support and stimulate critical infrastructure investment needed to improve service delivery and collection efficiency.
All these are geared towards moving Nigeria away from just a consuming nation to producing and exporting country. For this reasons, Emefiele has drawn praises across the waters-Meditteranen, Pacific and Atlantic.
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