Godwin Emefiele, CBN Governor |
In less than
one year, Emefiele has come under attacks for so many things. He has been
criticised for not devaluing the naira; for restricting Forex, FX, access to 41
imported items, including toothpicks and private jets; for making FX available
to a “privileged few”; for making money available to the former National
Security Adviser (NSA), Colonel Sambo
Dasuki, based on a presidential directive; for secretly employing the
children of the rich and the powerful; for flying private jets “used by Diezani Alison-Madueke”; for making FX
available to the wife of the president; and so long a list we have virtually
lost count. It is now appearing as one week, one accusation against the CBN
governor. While we are not in a position to say if these allegations are true
or not, we are getting worried as a Nigerian that these attacks are unending.
Are they mere coincidences? Or orchestrated?
We do not
hold any brief for the CBN governor. Indeed, we have never been his fan. It is
nothing personal or ideological. Our problem with him from the beginning was
the manner of his appointment by the former president, Dr. Goodluck Jonathan. Simply because Mallam Sanusi Lamido Sanusi (SLS) raised issues of accountability,
Dr. Jonathan illegally removed him as governor of the CBN and appointed Mr.
Emefiele to replace him. For that reason, we did not like the new governor. We
thought he was a beneficiary of an unholy decision by the former president. We
have therefore found it very difficult to warm up to Mr. Emefiele. We cannot
deny that he had a great banking career, rising to the very top at Zenith Bank Plc, but that has never
swayed us. As far as we are concerned, he benefitted from a dubious decision by
Jonathan and he must pay for it.
Dr. Jonathan
took a political decision in removing Sanusi. That is our ground of dissent. We
never agreed with those who said because Emefiele is an accountant he should
not be a CBN governor, or that only an economist should be appointed as CBN
governor. That is absolute rubbish. In the first place, there are several
examples of reserve bank governors across the world who did not major in
Economics. But that is beside the issue. That someone is an accountant does not
mean he knows nothing about economics. Apart from studying Economics up to
university level, even if not as a major, Emefiele has had a 26-year banking
career which we cannot easily dismiss. What do economists know that an Emefiele
does not know, either in theory or practical? We don’t have to make a fetish of
Economics.
Let us
dissect some of the issues at stake. The first storm Emefiele ran into was the
exchange rate. With crude oil prices crashing and FX reserves falling, the
logical action was to allow the naira to depreciate in line with the new market
realities. Unfortunately, some of these policy prescriptions are easier to make
than to implement. Today, we are buying fuel at N145 (official price, bar
scarcity). If the naira is devalued to N300 as many people want it, the pump
price of petrol will move to at least N150 per litre (again, bar scarcity). If
petrol is selling for N200 in the black market because of product scarcity, it
follows then that even if you devalue the naira to N300, fuel could go for N600
per litre in times of scarcity. It is not as if we have found the solution to
the multifarious problems facing us and that the CBN is the only thing holding
us back. Our problems are rooted in historical structural and policy challenges
that we are yet to address.
The bigger
problem, however, is that some experts think they have the solution to the
challenges Nigeria is experiencing. But things are not as easy as they appear.
At no time in our history have we depended on imports as today. With a monthly
bill of over $4 billion and FX revenue less than $1 billion, it would take
magic to meet the need of everybody. If President Buhari fires Emefiele today
and appoints somebody else, I still do not see the magic that will grow our FX
reserves when crude oil prices are low and we cannot do anything about it. The
notion that devaluing the naira will automatically attract FX inflow is also
exaggerated. Emerging economies are taking a hit in the current global
recession. It is not a Nigerian problem. Countries that have devalued are yet
to start reporting an enormous flow of foreign investments. Some of these
things are easier said than done.
The alleged
secret employments by the CBN should be cause for worry, but the reports of
“secrecy” and lack of regard for “federal character” have been denied by the
Central Bank. This puts an analyst in a tight corner. Who should we believe?
The CBN’s acting Director of Corporate Communications, Isaac Okorafor, was quoted in the press as saying: “In the last two years, we have had cause to recruit
specialists, and what the law says is that if we are going for that kind of
recruitment we should apply for waiver, so that we can do targeted recruitment.
The other issue is that there are states that are not well represented in the
CBN, and in this case we focus on those states to recruit people of certain
classes that we used to cover the shortfall in those states.” Okorafor’s
explanation suggests that no law was broken in the process since waivers were
duly secured.
However, if
it is true that the necessary approvals were secured for the recruitment, the
accusation will again fit perfectly into the conspiracy theory that there is
more to the criticism of Emefiele than the eye can see. There seems to be a
frantic search for evidence to nail him and remove him as CBN governor. An
online medium recently wrote an editorial campaigning for the replacement of
Emefiele with a serving or retired deputy governor. For someone who is yet to
complete the second year of his five-year tenure, canvassing that he be
replaced with a deputy governor is very curious. The impression you would get,
even if you are not a fan of Emefiele, is that there is certainly a well-oiled
campaign against him. This cannot be ordinary. It can’t be routine.
The irony
surrounding Emefiele, however, is that he may still emerge the real winner at
the end of the day. His position on the exchange rate has been well defended by
President Buhari himself. The FX allocation ban, like every policy, is
producing winners and losers. Just as there have been reports of factories
closing down because of FX scarcity (which, it must be noted, was caused by
falling oil prices and not the CBN), we also hear encouraging stories of the
gradual development of the agricultural value chain. We read reports of the
benefits being enjoyed by local farmers who are getting fully supported on
different fronts, including access to cheap finance provided by the CBN through
the Bank of Agriculture. It is early in the day to conclude that the policy has
failed, especially when the alternatives offer no magical returns. (Vanguard)
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