By Ademola Bakare
MR Godwin Ifeanyi Emefiele, the Governor Central Bank of Nigeria (CBN), is no doubt the most misunderstood living Nigerian today, if his current travails as the helmsman of the nation’s apex bank are put under a klieg light.
For an impressive first term performance, President Muhammadu Buhari rewarded him with a second term. The past eight years have been strewn with socio-economic challenges, which no doubt the Governor had himself admitted. Evolving global and domestic challenges proved the mettle in Godwin Emefiele with the way he rose to the challenges spewing out programmes and policies that rescued the economy from recession in 2016. This was few months after President Muhammadu Buhari assumed office.
He launched the Anchor Borrowers’ Programmme (ABP), suspending initially forty-one items which he later increased to forty-three from the official forex window to give bite to the backward integration economic policy of the government. He launched this to encourage local production of the products rather than outsourcing and frittering away the nation’s scarce foreign exchange. With the policy Nigeria came out economically stronger.
But the global COVID-19 pandemic halted the trajectory. Instead of sulking, as confronted by the unfolding global socio-economic tragedy, and knowing also that the Nigerian economy was just crawling out of a recession, he speedily rallied the private sector to the rescue – the CACOVID. The move was indeed a succor. His initiative proved potent and immunized the economy from collapse.
Aside this initiative was the deployment of Targeted Credit Facility to assist households and businesses to mitigate the effect of the lockdown.
Now, and if we must recall, Emefiele assumed office with high expectation from Nigerians and critical stakeholders. At the time, international price of crude oil declined significantly to an abysmal $16/20 per barrel and the resultant capital flow reversals and acute shortage of foreign exchange.
Stoutly built for the challenges, he rolled up his sleeves, solicited and got the support of the Bankers’ Committee, a novel collaboration in the Nigeria’s financial system. He secured a yearly five percent commitment of their annual profit as pool fund to provide credit facility for the resuscitation, development, and growth of the real sector – the MSMEs, the health sector, Power, and Aviation, among others.
Health sector got N100 billion, while the Real Sector got N1 trillion. In fact, the COVID-19 pandemic exposed how weak and vulnerable the Nigerian economy was. The fiscal authority was caught napping, but for the swiftness and initiative-taking Central Bank of Nigeria, one can best imagine what would have become of the economy if Godwin Emefiele had not risen to the occasion.
Afterwards, he started erecting legs for the economy to breathe well. He launched the Loan to Deposit Ratio (LDR) policy and regulatory forbearance, 100- for- 100 Policy on Production and Productivity, RT 200 Programme to stimulate non-oil exports, the Creative Industry Financing Initiative (CIFI), Nigerian Electricity Market Stabilization Facility (NEMSF-2) for capital and operational expenditure of distribution companies (Discos) aimed at improving their liquidity status and aid recovery of legacy debt. He established Infrastructure Development Company (INFRACO) in conjunction the Federal Government to stimulate infrastructure development nationwide, to mention but few.
Recently, the Bank stepped up its cash-less policy initiative launched in 2012 by redesigning and reprinting three high-denominated banknotes – N200, N500 and N1,000. Governor Emefiele announced to the nation in October 2022 of his intention. Nigerians welcomed the news. More so that similar exercise was conducted about two decades ago.
The benefits of a cash-less economy are numerous, thus remain the best option for Nigeria, rated as one of the best financial systems in the world. Mr. Emefiele had said that the policy will help to check insecurity, corruption and economic sabotage, banditry and kidnapping as well as rein-in inflation.
However, developments that followed the implementation seemed to have thrown spanners in the implementation agenda, temporarily putting it on hold till December 31, 2023. Politicians conjecturally felt that the policy, launched on the eve of the general elections was targeted at them to squeeze them of needed electioneering funds.
Three State governors, later joined by twelve other colleagues, took the Federal Government to court alleging that the policy was inflicting unimaginable pains on Nigerians. The Naira redesign/swap programme by extension would have (as was witnessed during the elections) reduced vote buying.
The Bank was accused of playing politics with the policy, thus likely to hamper smooth electioneering process. Nevertheless, the CBN loudly restated its unassailable apolitical stance.
The strange meddlesomeness of the apex court in matters of monetary issues leaves one gaping, and still asking: where is the independence of the Central Bank of Nigeria? Its action foretells a repeat or forage in matters of CBN’s management of inflation or deployment monetary tools in future.
As enshrined in CBN Act. 2007 (as amended), Section 18 says the Bank shall – (a) arrange for the printing of currency notes and the minting of coins; (b) issue, re-issue and exchange currency notes and coins at the Bank’s offices and at such agencies as it may, from time to time … and Section 19: (1) The currency notes and coins issued by the Bank shall be – (a) in such denominations of the Naira or fractions thereof as shall be approved by the President on the recommendation of the Board; and (b) of such forms and designs and bear such devices as shall be approved by the President on the recommendation of the Board, it did not say the Supreme Court.
The adversaries may have temporarily halted the full implementation of the cash-less policy, but they cannot abort the programme. Nations are fast developing their financial systems technologically, and Nigeria cannot afford to be left behind. What becomes of the fate of the policy or its implementation after December 31, 2023, will either advance the strides recorded in our financial system landscape, or obliterate whatever we may have laboured for in the past 12 years and months of full implementation.
The legislators are also threatening to amend the CBN Act just because of observed little glitches experienced during the implementation, which is normal with every new thing. They should however tread with caution so as not to throw the baby away with the bathwater.
Would the Supreme Court by the time it realizes it has erred, and usurped powers outside its authority, causing disruption in the planned implementation of the Naira swap, apologize to Nigerians? And would the politicians who politized the policy for campaign purposes, and not love for the Nigerian masses, leave the CBN alone to do its job? Only time would tell.
Bakare writes in from Abuja.