Emefiele triumphs above expectations
President Muhammadu Buhari’s request to the National Assembly seeking the re-appointment of Mr. Godwin Emefiele as Governor of the Central Bank of Nigeria, CBN, has put to rest the debate that shrouded the twilight of the governor’s first tenure.
With the failure of most governors to secure re-appointments going by history of the apex bank, many had written off the possibility of Emefiele returning for a second term.
All these have however been brought to an end, as the president through a letter to the Senate President Bukola Saraki, seeking the senate’s confirmation of the nomination of Emefiele in line with the CBN Act.
The letter dated May 8, 2019 read in part, “In view of the expiration of the first tenure of the current Governor of the Central Bank of Nigeria on June 2, 2019, and pursuant to the provisions of Section 8 (1) and (2) of the Central Bank of Nigeria Act 2007, I hereby present for confirmation by the Senate Mr. Godwin I. Emefiele for re-appointment as governor of the Central Bank of Nigeria for a final term of five (5) years.
“It is my hope that the Distinguished Senate will consider and confirm the nominee in the usual expeditious manner.”
Though the CBN is yet to make an official announcement on the matter, sources within the bank say Emefiele’s reappointment was only a matter of time. They say his strong stance against multiple calls to devalue the Naira and policy on forex restriction on 41 items were some of his achievement that endeared Emefiele to the president.
Emefiele would be the first CBN governor to serve two terms since Nigeria returned to democracy and also the second such reappointment in the history of the bank.
The CBN governor’s tenure was due to end in June 2, 2019, but the latest development will see the 57-year-old banker steering the affairs of the apex bank till June 2024, all things being equal.
Emefiele emerged as the CBN governor in the brink of the economic recession that threatened to drawn the country in 2015. Under his leadership, the CBN recorded giant strides. For instance, he introduced an investors and exporters window while directing banks to sell forex to customers over the counter for basic travel allowance, medical and education bills.
He steered the bank to take a more nationalist approach, trying very hard to change the thirst for foreign products.
The governor attracted widespread anger and consternation over his forex restriction for the importation of 41 items he believes the nation had no business importing.
Since then, the CBN Governor has not looked back and has intensified his support for activities that would steer the economy on the path of sustainable economic growth.
Emefiele’s first tenure was well managed, as despite difficulty in the economy, the governor worked towards ensuring stability in the exchange rate.
Under his leadership, the CBN invigorated its development finance activities and has maintained a particular focus on supporting farmers, entrepreneurs as well as small businesses, through various intervention programmes.
Some of these initiatives include the Anchor Borrowers’ Programme, ABP, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending, NIRSAL, and the National Collateral Registry.
The CBN also introduced the Real Sector Support fund; a facility meant to provide cheap funding at no more than nine per cent interest rate to new projects in the agriculture and manufacturing sectors; all aimed at boosting output and creating jobs.
Through the ABP Nigeria emerged from being a net importer of rice to becoming a major producer of rice. Over 900,000 farmers cultivating about 835,239 hectares, across 16 different commodities, had so far benefited from the ABP, which has generated over 2.7 million jobs across the country.
Emefiele, had explained that efforts at supporting small scale farmers and SMEs were based on awareness of the critical role they can play in supporting our economic recovery and growth, as well as in creating job opportunities for millions of Nigerians.
The CBN has through its MSME fund disbursed over N100 billion to the MSME sector. Under the auspices of the Bankers’ Committee, the sum of over N60 billion has so far been set aside under the AGSMIES fund to fund micro, small and medium scale enterprise businesses in the agriculture and manufacturing sectors of our economy.
The bank believes that the greatest challenge confronting MSMEs and local farmers is access to credit, and that to unlock the growth potential in the country; these groups must access funding seamlessly.
Emefiele recently said the CBN was improving access to credit for underserved Nigerians through the National Collateral Registry and the passage of the Credit Bureau Act.
Under this initiative, small and medium businesses are able to provide valuable assets such as equipment and livestock as collateral in other to access capital from institutions which play an emphasis on assets. As a result of these initiatives in addition to other reforms by government, Nigeria moved up 24 points in 2017.
“Close to 70 percent of Nigerians do not have access to financial services, hence the CBN introduced a series of steps to have a financially inclusive society, which include the agent banking guidance and shared network facility, both of which are meant to deepen penetration of agent method in underserved locations across Nigeria,” he added.
The recent launch of the Payment Service Bank in October 2018, was an additional step in leveraging on the agent networks of non-entities such as fast-moving consumer goods, mobile network operators, etc. to underserved communities.
Speaking at the launch the governor said, “We are happy because I remember about 18 months ago, Bill Gates mentioned that the level of financial inclusion in Nigeria was 48 percent and they were concerned that Nigeria was not making progress. We went to work to ensure we meet 2020 target of 80 percent. As a result of the actions we have taken, our level of financial inclusion as at last week has improved from 48 percent to 64 percent in the space of 18 months.
“I feel more confident that by 2020, we should certainly hit 80 percent mark we had set for ourselves. In doing this, it is important to look at how we faired as a country during the period of this crisis relative to some other emerging markets”, he concluded.
Meanwhile, mixed reactions have trailed Emefiele’s reappointment, with some believing the development was good for the banking sector, monetary policy and economic stability, while some others however think otherwise.
The chairman, Chartered Institute of Bankers of Nigeria, Abuja Chapter, Prof. Uche Uwaleke, described Emefiele’s re-appointment as a positive development for the Nigerian economy.
He said the governor’s re-appointment will boost confidence in the economy, adding that stakeholders would have confidence in the consistency of the monetary policy.
“Emefiele’s appointment is a good omen for the capital market. It is one development that speaks to policy consistency and will further consolidate macroeconomic stability, especially with respect to exchange rate and inflation.
“Investors, both domestic and foreign, can have some degree of confidence in the direction of monetary policy, which is positive for the capital market.
“One thing is now certain: That the interventions by the CBN in critical sectors of the economy, especially agriculture and non-agric based SMEs will continue.
“These will rub off positively on economic recovery efforts, especially now that the CBN under Emefiele has signalled an accommodative monetary policy stance. It is equally positive for financial systems stability.”