100 days is too short to make any reasonable assessment of a five-year tenure, but the CBN Governor Mr Godwin Emefiele has made his first 100days in office eventful with some reversals of policies and even initiated programmes like N220 billion MMSE funds and more still on the way. JOHN NWOKOCHA writes that though sanity is gradually returning to the system, more efforts are required to maintain the records.
In his first 100 days in office being Wednesday September 10, the Nigeria’s Central Bank (CBN), governor Mr Godwin Emefiele has scored landmark achievements worth celebrating.
The nation’s financial sector was experiencing serial instability, and unfortunately it was compounded by controversies that seemed unending over the suspension of Mallam Sanausi Lamido Sanusi as Governor of CBN. Hitherto, critics had made scathing remarks at the Nigerian economy in a sort of post rebased GDP era analyses and took a swipe at further plummet. In fact, nothing best illustrates the picture of the financial sector than the plethora of crises in the banking sector that started sometime in 2009, spiralling costs and retail banking policy somersault, depleting foreign exchange reserves, naira devaluation, terrorists funds. And given the challenges the economy was facing at the time stakeholders expect a realistic anti-inflationary policy, a stable forex rate regime, a tight monetary stance, and open approach to foreign investors, based on the role they continue to play in stabilising the naira, in order to support price stability.
It is therefore not surprising that Emefiele who assumed office on June 4, 2014 has a clear view of the challenges lying ahead of him at the nation’s apex bank, especially as he would step into a position that was made controversial by his immediate predecessor, MallamSanusiLamidoSanusi, who is now the Emir of Kano. So, following his confirmation by the senate, the CBN governor unfolded his 10-point agenda for the apex bank and the nation’s economy in general. The mandate is among others, to keep the inflation rate, which reached 7.9 percent in April, within the 6 percent to 9 percent target band, price stability which has been one of the vexed issues in the financial system, as well as contemplate raising the cash reserve ratio on public sector fund to 100 per cent in order to ensure that all government money is kept in one account. And, together with other members of the Monetary Policy Committee (MPC), he will decide whether or not to keep the naira at the midpoint currency peg of N155 to a dollar. The agenda for Emefiele also is to adopt a rational strategy for mass job creation. Hence, he had described the nation’s unemployment situation as emergency. Against this backdrop, he assured that the CBN under his watch will pay attention to job creation. In fact, Emefiele, the former chief executive of Zenith Bank, Nigeria’s largest bank by assets came in the saddle at a time he cannot afford not to face the challenging task of managing pre-election spending amid Nigeria’s declining external reserves. However, being a ‘stabilizing and positive force’ as he has been severally described, the CBN governor easily tackled the tasks and by the same token set new records of attainment. One key achievement in his first 100 days in office is his ability to avoid the murky waters of politics. Indeed, he has managed to keep a safe distance from controversy. So far he has yet to make political statements. Through his calm and conservative personality Emefiele has impacted on the apex financial institution. There is no gain saying that since he took over leadership of the institution activities are generated based on professional and broad considerations not on narrow and political emotions. In other words, the CBN currently operates under the atmosphere of professionalism. To this effect, he has succeeded in making the CBN apolitical. There is therefore no doubt that
President Good Luck Jonathan must be saying to himself that he made a good decision in the appointment of Emefiele. As expected the governor has quietly established a convivial working relationship with the Presidency, and similarly works closely with the fiscal authorities, a well planned calculation being enjoyed by the bank. It is not a happenstance that the country is enjoying relative stable exchange rates and in a short time the naira even appreciated against the dollar and the reserves which had dwindled have witnessed some accretion. As part of the on going reforms he has introduced
Memories are still fresh how he planned to address rising employment in the country.
He had stated: “We would ensure that, if approved, whatever monetary policy decisions that would be taken would be those that would improve the level of employment in Nigeria; we know that employment is very important. We know today that we have an employment emergency in Nigeria’, while unfolding his agenda.
He declared further:“And we must ensure that whatever decisions we take at the CBN in the Monetary Policy Committee (MPC) would be those that would lead to improvement in the level of employment in Nigeria. We would ensure that we work with the manufacturing companies to ensure that we improve on their level of production and by extension ensure that we improve and achieve economic growth in Nigeria.”
In re directing the activities of the Bureau De Change BDC in line with his ongoing reforms, his record of success arguably remains unprecedented. The current sanity in the operations of BDC in the country is a welcome respite from the blatantly unorganised system and consequent leakages and impunity that became the order of the day. But when the governor decided to sanitize this sub sector, the move was greeted with a great resistance largely from clannish and narrow interests. After the initial protest those opposed to the change have come to embrace it as the best thing that will happen to the sector. The main reason for the decision is to block the leakage of foreign exchange which they perpetrated. It was no longer business as usual for the operators.
Although they tried to frustrate the reform in this area, wiping up sympathy as usual, and even appealed to a group of legislators in the House of Representatives, Emefieleconvinced them that it was meant to add value to the economy. He equally assured the operators they would not be thrown out of job. With the understanding of the legislators, the way was therefore paved for successful implementation of the policy. In the same breath, he made the operators to see reason with him that it was far from witch-hunt. Interestingly over two thousand operators met the new capital requirements.
Those that were unable to meet the deadline were given safe landing of a sort as they were still left to continue to operate except that access to official foreign exchange was now denied. It is important to state that operating without foreign exchange allocation from official channel was the common practice prior to this dispensation.
However, the new approach allayed the fear that the policy will lead to layoffs and worsen the unemployment situation. Another area he recorded success is the re introduction of service charge on Remote- on- Use ATM. On the fourth withdrawals using third party ATM, a fee of N65 is charged the user.
There were initial complaints but then the policy has come to stay. Since the regime of N65 charge, customers’ complains about inadequate machines and the quality of service, network related frustrations have not been common. It would be recalled that ATM charge was stopped in 2012. The successful launch of the N220 billion Micro, Small and Medium Scale Enterprises fund by the President recently, is another milestone. The initiative will boost the contribution of the bank to the nation’s economy and employment creation.
During the occasion, President Jonathan said a survey conducted by the Federal Office of Statistics in 2010 indicated that there are 17.2 million MMSE enterprises in the country which account for the employment of 32 million Nigerians.
And that if each one of these businesses employ just one additional person ‘we would be adding 17 million jobs making considerable dent on the problem of unemployment in the country which has been seen by most informed compatriots as the cause of most of the anti- social behaviors prevalent in the economy not forgetting even the ravaging insurrection in our economy’. Besides, the governor in his first 100 days adopted a stiffer sanction for bad debtors.
To black list bad debtors eventually will return sanity in the banking sector. Although details of the CBN’s involvement in funding the gas sector are still sketchy, the initiative by the federal ministry of Power is to get the apex bank play a key role in the gas sector to maximize the potential of the sector.
On the MINT crisis Emefiele’s intervention in the recent change of management will finally put an end to the crisis at the same time boost productivity and encourage harmony. The journey so far, for the CBN governor who has over 26 years banking experience and holds a BSc and an MBA, both from the Universty of Nigeria Nsukka, started out well, raising hope of successful tenure.
