Who will be next CBN governor?

Among the several appointments that President Buhari will make in his second term is the new Central Bank governor.

Godwin Emefiele who was appointed by President Goodluck Jonathan in 2014 will serve out his first term on 3rd June. He could, however, be reappointed for another five-year term if the president so wishes.

No CBN governor has been reappointed for a second term since Joseph Sanusi who completed his two terms in 2004.

The President will therefore be caught between the need to continue with a tested and trusted hand he had worked with in the last four years, or a new appointee whose learning curve could be a mismatch with the energetic pace of his second term.

President Buhari should not yield to the usual pressures from ethnic jingoists or pander to the scheming of the so-called cabals in making his decision.

The fragile recovery and growth of the last few years cannot be sacrificed on the platter of primordial sentiments.

I last met Godwin Emefiele in March 2014 soon after his appointment was announced. He was clearing out his desk as the chief executive of Zenith Bank and was getting set for the Senate confirmation, security clearance and all the works that follow such high-profile appointments.

I was working on a special publication on the World Economic Forum that was holding in Abuja in May that year. I had wanted to snatch a quick interview for the publication as I walked into his office, but the anxiety and tension of the moment was palpable even in his voice. ‘Please, understand with me. We can’t do an interview now.’ I understood.

The new governor plunged into office as the election season was approaching and in the background was the untidy and rancorous departure of his predecessor, the brainy and erudite Sanusi.

President Jonathan must have deliberately looked for a more conservative and staid banker who will not rock the system as his pick. Central bankers the world over are never known to be radical activists.

In early 2015 – less than a year in office –the new CBN governor faced severe professional challenge as officials of the Jonathan administration literally raided the Bank and withdrew huge dollar cash to fund his second-term re-election campaigns. It was a major source of worries for me as I pondered (I still do) the role of a CBN governor in such circumstances. I am convinced that if Emefiele were found complicit, President Buhari would not have kept him a day longer.

The first major crisis of the new administration was the crash of the naira, fall in oil price and scarcity of foreign exchange in the banking system.

Emefiele worked conscientiously with the Economic Management Team of the Buhari administration and others like the Finance and Budget & National Planning Ministry to manage the country’s response to the dwindling revenue, galloping inflation, significant exchange rate pressures, sharp fall in FX inflows and delisting of Nigeria from the JP Morgan Bond Index, among other challenges.

The CBN should also be commended for addressing the fallouts of the overall uncertainty following the election of the new president in 2015. Notable accomplishments of the Bank also include: Quick recovery from recession, which was caused by sharp and sustained oil price declines from 2015 through 2017.

In contrast, Nigeria’s peers are still struggling. South Africa is basically still in recession while Egypt had to resort to a US$12 billion IMF loan.

Emefiele and his team also fought hard to secure the longest month-by-month decline in inflation from about 19 percent in January 2017 to about 11 percent in July 2018.

Many Nigerians do not appreciate the role the CBN played in the federal government’s payment of bailout funds to state governments, and restructuring of their suffocating bank debts into long-term federal bonds. It was such debt restructuring that helped Akwa Ibom State government, for example to exit its monthly debt service of over N3 billion to only about N300m. These averted major crisis with Labour unions as the new administration of President Buhari offset billions of arrears in Salaries, Pensions and Gratuities.

For me, the governor’s most impactful achievements are increased funding to agriculture and the reduction in the nation’s food import bill, thereby restoring the country’s current account to a surplus. Our monthly food import bill fell from US$665 million in 2014 to only US$160 million as at this month.

Ancillary to this is the improvement in the value of the Naira, which had depreciated to about N520/US$1 in the early days of the Buhari presidency to about N360/US$1 today.

More importantly, the stability of the rate in the last three years or so, even during the elections – a rarity in the country – is quite commendable. To support exports and investment inflows, the bank has also created the Investor-Exporters FX Window which together with other incentives and enabling environment spurred an inflow of over US$48 b as at end Feb 2019 billion into the country, a staggering addition to the country’s Foreign Exchange Reserves, from about US$23 billion in October 2016.

Under Godwin Emefiele, the CBN in 2015 launched a large-scale financing scheme for agriculture dubbed ‘Anchor Borrowers Programme’ which has disbursed hundreds of billions in small loans at concessionary rates to hundreds of thousands of peasant farmers, thereby creating millions of jobs and improved food production across the country. I must however commend President Buhari for providing the necessary political leadership and goodwill that conduce to the success of this scheme.

It is notable that just this week the CBN governor met with some governors in the oil palm-growing belt to discuss a similar funding arrangement for oil palm, a commodity the nation spends $500m yearly to import. I can only hope that some of those governors who are addicted to petrodollars from monthly FAAC allocations will see the business opportunity here.

Whoever the new CBN governor, the nation urgently needs a long-term economic development plan similar to the National Development Plans of the 1970s.

The CBN governor and indeed all other members of the EMT and indeed other key stakeholders should join the federal government to design a 25-year Development Plan that should fashion out funding, timelines and modalities for economic programmes like steel development, textile manufacturing, roads & infrastructure, rail development, electricity, manufacturing, etc. In short, the country needs a Development Plan that should give us a roadmap on how to manage Nigeria without Crude Oil.
 
•Etim, a journalist and banker, wrote from Uyo