By Ishaya Ibrahim
Against many odds, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, got a second term.
No central bank governor has served more than one term since 1999. Emefiele has broken that record.
There are insinuations that Emefiele craved for the second term he has “graciously” got from the powers that be.
Another odd which Emefiele survived was that he was appointed to the position by former President Goodluck Jonathan.
Vestiges of that government are hardly reappointed by his successor, President Muhammadu Buhari.
Why then was Emefiele reappointed? He understood the mind of his boss, his economic philosophy and the policy thrust of his government.
Simply put, Emefiele dances to the economic policy of the government. Central bank chiefs are not necessarily bound by the policy dictates of those who appointed them. The Central Bank is supposed to be independent.
Buhari favours regulated foreign exchange market. Emefiele does too. Buhari favours banning of items like he did when he was the military head of state between 1984 and ’85. Emefiele banned 40 items from receiving forex.
Emefiele’s Anchor Borrowers Scheme, which is an initiative of the CBN to give rice farmers interest-free loans may have endeared him to Buhari. Many of the beneficiaries are in Buhari’s political stronghold – North.
Some other factors that helped Emefiele’s profile is Nigeria’s foreign reserve that has been on a steady rise under the CBN governor, which is about $40 billion, and inflation which is now receding.
The challenge, however, is that Nigeria’s economy is expanding below capacity. Although the Bankers Committee which Emefiele heads, recently reduced the key interest rate by 50 basis point after keeping it at 14 per cent for almost five years, the growth from that move may be insignificant. The population is growing at 3 per cent per annum, twice the size of annual economic growth.
Even though Emefiele’s defiance of calls to devalue the naira may be viewed favourably by Buhari, the implication is that it disincentivizes foreign investors whose money Nigeria needs to boost local production of goods and services.
While Emefiele holds on to his second term, Nigeria’s economy lurches on.
