“Under Emefiele’s watch, the Bank has dabbled into everything under the sun, blurring all the lines between monetary and fiscal policy management, and political posturing”.
After months of speculation, the political ambition of the governor of the Central Bank of Nigeria, Godwin Emefiele has all but been confirmed. On May 6, it was announced that the governor has picked up the presidential nomination form of the ruling All Progressives Congress. While Mr. Emefiele has clarified that the form was obtained for him and that it is not certain yet that he will be contesting, it is difficult to believe that those who obtained the form did it without his consent and approval. Emefiele’s dilly-dallying notwithstanding, it is time to emphasise to him that the position he currently holds precludes him from engaging in partisan politics or taking up any activity or vocation that detracts from his attention and energy for his CBN job.
The Central Bank of Nigeria Act (2007) couldn’t have been clearer when it states, “The Governor and the Deputy Governors shall devote the whole of their time to the service of the Bank and while holding office shall not engage in any full or part-time employment or vocation whether remunerated or not except such personal or charitable causes as may be determined by the board and which do not conflict with or detract from their full-time duties.” Campaigning for any political office, let alone the presidency, is a vocation that conflicts and detracts from the full-time duties of running the Central Bank of a country in monetary and fiscal crisis.
From reading the CBN Act and the traditions of the bank since its inception, the Bank was established to be as independent and non-partisan as possible. The appointment of the governor like other major appointive positions requires the support of both the legislature (the Senate) and the executive to ensure that whoever is eventually appointed does not have to feel beholden to either branch of government.
Unlike other major positions like ministers and special advisers to the president, the CBN governor is protected from arbitrary sack by the President as any such sack is required to receive the assent of the Senate before it could be effective. There are only a handful of positions like this in the country and it is expected that whoever holds any of them would be a nonpartisan official, strictly focused on serving the country rather than playing politics to hold on to his or her job.
It is therefore unfathomable and completely unacceptable that Emefiele may run for the presidency without first resigning his position. A politicking central bank governor can no longer be deemed to be nonpartisan and can no longer be trusted to make decisions in the best interest of the country. In fact, all the decisions of the governor over the last eight years are now suspect as they are probably informed, in part at least, by the governor’s ambition rather than what’s best for the country.
While Emefiele is already the second longest-serving governor of the Central Bank and is on course to be the longest-serving by the end of his term in 2024, the performance of the governor has been poor, to put it mildly. Under Emefiele’s watch, the Bank has dabbled into everything under the sun, blurring all the lines between monetary and fiscal policy management, and political posturing. He has lent generously to the Federal Government, over and above what’s acceptable by the Bank’s own guidelines. The financial reporting by the Bank has been criticised by analysts for being opaque and borderline untruthful.
The Bank’s various loan programmes to different industries, especially the agricultural sector, have been riddled with controversy. For example, the trillions of naira in agric loans have failed to make any major dent in Nigeria’s food insecurity problem and many of the loan schemes are not being properly serviced by the debtors. Emefiele has conducted himself like a typical state governor, executing projects without much thought for their monetary or economic impact.
His approach to managing the naira has equally been disastrous with naira losing 10.6% of its value every year, according to the International Monetary Fund. Since 2015, the currency has gone from N200/$ to $N580/$. But what is most unfortunate in all these is the gap that has been created between the official rate that’s not available to most people in the country and the black-market rate. As of today, the difference between the two rates is around N160, or a difference of roughly 40%. This has created a perfect opportunity for arbitrage. The governor’s predecessor, Sanusi Lamido Sanusi had in 2016 warned that the refusal of the CBN under Emefiele to let Naira reflect its true market value encourages “corruption and rent-seeking” as it puts money in the pockets of those who are able to secure foreign currency at official rate at the expense of the country.
My argument is not that the governor cannot contest for the presidency because he has been bad at his job. No. He’s clearly not the first public servant to seek reward for mediocre performance. My argument is that the governor has been bad at his job even when he is presumably giving it his full attention. Now that he is moonlighting as a politician, his performance is probably only going to get worse. It is therefore in the interest of the country for President Muhammadu Buhari to ask the governor to either eschew his interest in politics while serving as governor or resign immediately.