Welcome to Emefiele 2.0

The living legend that is Godwin Emefiele has somehow, against all odds, obtained a second 5 year term in office as CBN governor. There is much to say about this that will not fit into an 800 word column. But one of the things that amazed me the most was the manner of his confirmation in the senate and what it says about how those entrusted with leading Nigeria think about the country’s future.

To begin with, the way you interview someone for a job in 2014 is different from the way you interview them for a job in 2019 after they have spent 5 years in office. In 2014, the best you can do is to cover as many possible scenarios as possible and then make a judgment on whether the person’s answers show them to be fit for the office.

But in 2019, you have a record – made of facts and actual events – to question them on. The question then comes down to whether or not you want what you have seen and experienced over the last 5 years to continue for another 5 years. If the answer is no, it does not mean that the person is automatically ruled out of the job. But it means they have to present a credible alternative as to how they intend to do better. 

Yet, Godwin Emefiele went before the Nigerian Senate and essentially got a pass from the Senators. When he went before the senate committee, in place of questions he got what one newspaper described as an ‘avalanche of prayers’. Even though the senators acknowledged that there are tough times ahead, they did not seek any answers from him as to how Nigeria might get through the next 5 years under his monetary policy leadership. They did manage to ask him the generic question about multiple exchange rates to which he gave an answer that is surely one for the ages – ‘we do not have multiple exchange rates, what we have is multiple windows’. They asked him to ‘bow and go ‘and that was the end of that. 

It was no different when he went before the full senate for his confirmation. The fact that there is a tape recording out there – which the CBN has not denied its authenticity – in which an exasperated governor was heard discussing serious problems with the CBN’s accounts was of no concern to the senators. They simply put this down to the work of some nebulous ‘enemies’. One senator said he was ‘overwhelmed’. I wonder why. Another said when next there are bailout funds, the governor should ensure the money is properly shared. That is, it is taken for granted that rather than bailout funds being a response to crisis situations, it is now another permanent money sharing device. 

All in all, the senators declared themselves to be happy with the president who was happy with his stewardship over the last 5 years (hence nominating him for a second term). The president’s adviser to the National Assembly went on to say that “this confirmation will be seen as one of the fastest requests to be considered by the Senate. The executive is grateful”. And that brought to a close the serious and fundamental question of the direction of Nigeria’s monetary policy for the next 5 years. 

In 2018 alone, the CBN spent $6bn keeping the exchange rate ‘stable’ for President Buhari. Not one senator bothered to ask him whether this was the best use of scarce resources, and more importantly, how sustainable this strategy is. The ability for the CBN to do anything useful for the economy has been shrinking steadily because a large chunk of its firepower has been taken up by the sheer amount of debt it has run up just to make President Buhari happy with an exchange rate that does not move at all like all other exchange rates in the world.

At one point recently, believe it or not, the CBN had larger debts than the Federal Government. Before Sanusi Lamido left office as CBN governor, he published the full audited accounts of the CBN. Since Emefiele became governor, he has stopped publishing the accounts. 

None of these serious matters interested the senators. They are given confirmatory powers just so that in the event that the president has nominated an unfit person for office, the people can at least have a final say, via their elected representatives. Yet again, we have seen another part of Nigerian democracy that simply does not work as advertised. Without any serious thought, Nigeria has been committed to 5 more years of a particular brand of monetary policy by an outgoing senate.

Given the current state of the CBN’s balance sheet, if and when the next crisis comes, will Emefiele have the tools to deal with it? This is now an irrelevant question. As a friend of mine likes to say – this is Nigeria; anything you see, you have to take it like that. 
Welcome to Emefiele 2.0