The tenure of Mr Godwin Emefiele as governor of the Central Bank of Nigeria (CBN) expires in June this year. There is a chance of renewing his term for five more years, but feelers from Abuja suggest that President Buhari intends to let him go. A decision is likely before June 1.
Going by his antecedents, Buhari likely has already pencilled in Emefiele’s successor. We only hope he wouldn’t invite a cattle herder to head the apex bank. His clannishness is legendary. He has violated the Federal Character Principle several times without being reprimanded by other arms of government.
Emefiele’s tenure has not been spectacular when it comes to managing monetary policy. Most of the time, he simply kowtowed to the demands of the presidency or the cabal suspected to be pulling the strings in the corridors of power. Against all known economic principles, the CBN on Emefiele’s watch has used billions of our scarce dollars to defend the naira even after the Nigerian currency has been devalued. There are no fewer than four dollar rates in Nigeria, because “All animals are equal but some are more equal than others”. While a favoured few get the dollar at the official N305, the majority source theirs at N385. Following the introduction of the Treasury Single Account (TSA), Nigeria’s deposit money banks have been doing business with much difficulty. They have since sacked many of their workers. Loan seekers are frustrated even at high interest rates.
But the question remains: will Emefiele’s replacement perform better than he did? Will the appointment help or hinder the stability of the exchange rate and the Nigerian federation itself? It is almost certain that the president intends to replace Emefiele with another Muslim northerner, despite all the outcries against marginalisation of the entire south and especially the south-east. Emefiele is from the south-south but since he is Igbo, the south-east could well regard him as one of theirs. His best credential, perhaps, is that he is a development economist.
It is President Buhari’s prerogative to appoint the next CBN governor. He needs help in making his choice, however. The job is not one anybody can do. In view of the precarious state of the economy, it should be left for not just any qualified candidate but the best candidate no matter what part of the country they come from. We need a governor to lead an independent CBN – a governor who could disagree with the president and still retain his job. There is little sense in getting a player in a commercial bank to head the same apex bank that ought to supervise the former; Emefiele and Sanusi are examples.
Everyone remembers former CBN governor Prof. Chukwuma Soludo’s banking consolidation policy of 2005 and the wonders it did to stabilise commercial banking in this country. But for that policy, the bubble would have since burst, as it did in the early 1990s when finance houses were everywhere and all 419 fraudsters were bank owners. The crooks regrouped into merchant and commercial banks. Others anticipated the housing loans promised by the Federal Housing Authority and floated mortgage banks. The idea was to carefully collect people’s deposits, steal them through non-collateralised loans, and then watch the banks collapse from their hideouts abroad. Little wonder William K. Black wrote that the best way to rob a bank is to own one. This bank-robbing “business” was booming just before Soludo appearance on the CBN scene.
We don’t want to see “business as usual”. Banks should be able to collect deposits and lend to customers at slightly higher rates. They should not thrive on round-tripping – buying foreign exchange from the CBN under the pretext of meeting customers’ demands but diverting same to the parallel market. Soludo and his successor, Sanusi Lamido Sanusi (now Emir of Kano), brought honour to the banker’s bank. During their tenures, we witnessed the fall of former “bank CEOs of the year”. Assets worth hundreds of billions of naira were seized from former “amazons of banking”. Unknown to many, the banking industry was just at the tipping point.
The next CBN governor should be someone who can compel banks to bring down their lending rates to less than 10%. He or she should initiate robust policies that would steer the ship of the nation’s economy towards calmer waters. He or she should maintain a single exchange rate and thereby abolish the parallel market run by illiterate hawkers. We hope to see a monetary policy aimed at encouraging small borrowers so that Nigerians could employ themselves and not wait for non-existent white-collar jobs.
President Buhari should, for once, play the statesman and not the politician. The future of the economy and the nation itself may depend on the choice he makes this time round.
With: The Oracle Today