How Emefiele won Buhari’s heart for second term

Come June 3, 2019, the first five-year-term as governor of the Central Bank of Nigeria (CBN) for Mr. Godwin Emefiele would expire.

Before now, tongues were wagging as to whether President Muhammadu Buhari would reappoint the renowned banker, a puzzle that’s on the verge of being laid to rest as the president Thursday forwarded his name to the Senate for confirmation for another five years.

Experts and analysts have different reactions, especially with regards to why Buhari chose to give Emefiele a second term.

 Emefiele was first appointed in 2014 by former President Goodluck Jonathan, and retained when Buhari came to office in 2015.

Reappointment

Buhari, in a letter dated 8th May, 2019, and read on the floor of the Senate  Thursday in plenary by Senate President  Bukola Saraki, said the request was made in view of expiration of Emefiele’s first  tenure as CBN Governor on June 2,  2019.

The letter titled: “Renewal of the Appointment of Godwin Emefiele as Governor of Central Bank of Nigeria”, reads:

“In view of the expiration of the first tenure of current Governor of the Central Bank of Nigeria on June 2, 2019, and pursuant to the provisions of section 8(1) and (2) of the Central Bank of Nigeria Act 2007, I hereby present for confirmation by the Senate Mr. Godwin Emefiele for reappointment as Governor of the Central Bank of Nigeria for a final term of five (5) years.

“It is my hope that the Distinguished Senate will consider and confirm the nominee in the usual expeditious manner.

“Please, accept, Mr. Senate President, the assurances of my highest consideration.”

By the CBN Act, the Senate must confirm the nomination before taking effect.

First in 20 years

This is the first time since 1999, when Nigeria returned to democracy, that anyone would be nominated to serve two terms as CBN governor.

Before assuming the office of the CBN governor, the 57-year-old banker was the group managing director of Zenith Bank Plc.

It is believed in some quarters that his reappointment was occasioned by some fiscal policies of the apex bank in his outgoing tenure.

For instance, some argued Emefiele’s handling of the economy when the country slipped into its worst recession in 29 years greatly endeared him to Buhari.

Also, in 2015, when global oil prices began to decline, there were calls for the devaluation of the naira, an idea Buhari opposed.

And rather than going for the devaluation option, the CBN governor introduced various interventions to ensure the naira was stable.

These interventions included introducing a list of items for whose import foreign exchange was not made available.

The CBN took the decision to also ban 41 items from accessing foreign exchange through official routes to encourage local production of the items and simultaneously conserve the nation’s depleting foreign reserves.

Since then, the CBN had raised the number of items affected on the list to 43, with the inclusion of fertiliser and textile products.

Some of the items not valid for foreign exchange at the Nigerian window include rice, cement, margarine, palm produce, beef, vegetables, poultry and eggs, private aeroplanes, wooden doors and Iron rods, among others.

He also introduced an investors and exporters window while directing banks to sell forex to customers over the counter for Basic Travel Allowance (BTA), medical and education bills.

With help from the Bankers Committee, the apex bank also introduced financing initiatives for farmers and small and medium enterprises.

Among them was the Anchor Borrowers Scheme (ABP) seeking to increase the country’s local food production and conserving the foreign reserves.

 The CBN, under Emefiele, also ensured the naira which sometimes goes for N500 to $1 was dragged down to the current rate of N360 to the dollar.

Vision on assumption of office

At his maiden news conference, the 11th apex bank governor harped on the vision of building a people-focused central bank that would deliver effective price and financial system stability as well as promote sustainable economic development.

Over the course of five years, Emefiele introduced policies which many economic experts have criticised and hailed by some others.

The CBN also introduced the multiple foreign exchange system, which led to the creation of the Inter-bank/Wholesale, Invisible, Small & Medium Enterprises (SMEs) and the Investors/Exporters’ windows.

Also, in 2018, the CBN signed a bilateral currency swap agreement with the People’s Republic of China worth about $2.5 billion.

The Currency Swap Agreement is designed to aid trade transactions between China and Nigeria and remove the need to first source for U.S. Dollars before payments for transactions involving the two countries.

The CBN, through the Bankers Committee and in collaboration with all banks in Nigeria, also inaugurated a centralised biometric identification system for the banking industry tagged: “Bank Verification Number (BVN)”.

 If his nomination is approved by the Senate, Emefiele’s five-year tenure would end 2024 after a new president must have been elected 2023.

Reappointment good omen – Uwaleke

 In a reaction, Nigeria’s first capital market professor, Uwaleke said, “Emefiele’s appointment is good omen for the capital market. It is one development that speaks to policy consistency and will further consolidate macroeconomic stability, especially with respect to exchange rate and inflation.

“Investors — both domestic and foreign — can have some degree of confidence in the direction of monetary policy which is positive for the capital market. One thing is now certain: that the interventions by the CBN in critical sectors of the economy, especially agriculture and non-agric based SMEs will continue.

 “These will rub off positively on economic recovery efforts, especially now that the CBN under Emefiele has signalled an accommodative monetary policy stance. It is equally positive for financial systems stability.

“So, I expect a positive reaction..Going forward, I would like to see an intensification and effective monitoring of the interventions, in particular the Anchor Borrower programme. Emefiele should also focus on ensuring increased access to credit by SMEs and generally fostering a low interest rate environment with the support of fiscal authorities.”

Good news – NECAS

 Also, National Chairman North East Commodity Association (NECAS) Sadiq Daware has lauded President Buhari for reappointing Emefiele as CBN boss.

Daware, who spoke to News Agency of Nigeria (NAN) Thursday in Yola, said it was good news for farmers in the country.

Daware said farmers were happy with agricultural programmes introduced under Emefiele and looked forwards to more support during his second tenure.

“The people of Nigeria, particularly farmers are very happy with what President Buhari did today in forwarding the name of His Excellency Godwin Emefiele for second term of five years.

“This is a clear indication that people who are honest, people who are hard working, people who have common man in their heart would always have their way.

“On behalf of NECAS who are one of the accredited commodity associations that are implementing Anchor Borrowers Programme, we are happy and we hope more things would come during his second term,” Daware said.

While listing Emefiele’s achievements in diversifying the agricultural economy in Nigeria through support to farmers, Daware said  the CBN governor also supported value addition as well as all-year-round production.

“We believe all these achievements will be sustained in his second coming.” Daware said.

Evidence of good performance – Owoh

In a similar reaction, Managing Director H.J. Trust and InvestmentHarrison Owoh said the fresh tenure was an evidence to show that Emefiele performed well in his first term in office.

He said CBN’s efforts under his administration spoke good of him, especially, his target of revitalisation of the agricultural sector to boost food production in the country.

Wishing him best of luck, he said Emefiele expected to do more of delegation in his second term in office.

He, however, said the country needed good policy that would help move the economy forward. 

“We need policy that will channel the economy in a growth path, build strong financial system that will stand shocks and enabling environment to thrive business activities in the country,” he said.

Also, a financial analyst, Mr. Ifeanyi Okolo,  said Emefiele mounted the saddle  at a time the economy had started weakening, saying the first two years in the office were not easy due to the external shocks that hits commodity exporting countries.

This shocks, he said, led to the plummeting of Nigeria’s reserve as oil price fell as low as $28 per barrel February 2018.

Okolo said despite the challenging period, Emefiele and his team introduced different measures to check inflation, stabilises the naira and put the economy on the right footing.

He said, Emefiele’s achievements were encouraging.

The financial expert listed the feats to include; introduction of multiple forex system which created the interbank/ wholesales, invisible, small and medium scale enterprises and investors/ exporter window, which  brought great stability to the forex market and contributed to exit of Nigeria from recession.

He said the exclusion of 41 items from being imported with no access to official forex market, increased patronage for local goods and stimulated local productions.

Reappointment, harder work – CSJ

Similarly, Lead Director Centre for Social Justice (CSJ) Eze Onyekpere said the apex bank boss should embark on a retreat to review and restrategise as well as rejig the CBN monetary and fiscal policies.

“We need to bring in most competent experts so that the Nigerian economy breath fresh air in terms of stronger naira…..”

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