CBN Gov position: Emefiele set for 5+5

…President disposed to his re-appointment in view of his role in stabilisng the economy – Presidency source
…Industry players laud Emefiele, say his re-appointment will enhance stability in monetary policies
Strong indications emerged on Sunday that Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, is likely to be re-appointed for another term of five years by President Muhammadu Buhari.

Though the apex bank governor’s appointment is for a five-year renewable tenure that ends in May this year, it was, however, learnt that President Buhari is determined to continue with the progress recorded by the Governor so far, despite the effects of the Macroeconomic challenges.

In fact, a competent source at the Presidency who craved anonymity because of the sensitive nature of the matter told our correspondent that President Buhari is disposed to Emefiele’s re-appointment particularly because of the way the apex bank under him has managed to stabilise the economy through various monetary policy instruments.

Emefiele approach to economic stability
When Mr. Godwin Emefiele became the 11th CBN chief as well as its 10th indigenous governor, he maintained that the vision of the CBN is to create a people-centred Central Bank by “delivering price and financial system stability and promoting sustainable economic development.”

These are the things he has been doing over time and Nigeria’s banking sector, and the economy is better off because of that.

Since arriving at the CBN in 2014, Emefiele had with the support of the board and management of the apex bank laboured to stabilise the nation’s economy which slipped into recession in 2016.

It is worthy of note that when the current administration came onboard, Nigeria’s economy was in serious crisis, but for the CBN under the leadership of Emefiele’s financial system stability strategy and the idea of how best to promote sustainable economic development, are all helping the banking sector and the nation’s economy at large.

Repositioning Nigerian economy
As head of the CBN, Emefiele uses (as raw materials), financial system stability; banks supervision; consumer protection; development financing banking; payments system and reserve management- making them his vision, to shape the banking sector into a product that is helping to reposition the Nigerian economy.

As part of the effort in ensuring that Nigeria strengthens her payments systems, Emefiele-led CBN on July 28, 2016, directed commercial banks to allow savings account customers with BVN to lodge cheques of not more than N2 million per customer per day, into their accounts.

Emefiele and his team also directed the removal of fixed interest rate on credit cards, discontinuation of actual address verification in account opening for customers with BVN, while adding that banks should begin to embed BVN biometric data in payment cards issued henceforth, to facilitate offline BVN verification and biometric-based customer authentication on such payment devices sat ATMs, point of sales terminals, POS, Kiosks.

Foreign Exchange Regulation
Over the years as the CBN boss, Emefiele, an economist and a banker, has survived many intrigues, especially during the period when the largest economy slipped into recession, but like a cat with nine lives, Emefiele survived crisis from office which reached a crescendo in the period between 2016 and 2017 when the nation’s currency, Naira, faced critical attack from speculators, causing the local currency to depreciate rapidly.

At some point, the naira fell to between N520 to N550 to the dollar on the black market, and in spite of various calls for the CBN to officially devalue the naira and float the currency, the CBN governor stuck to his gun and chose to intervene in the foreign exchange market and introduced capital control measures to curb the naira haemorrhage.

However, he was able to silence his adversaries after the introduction of the Investors and Exporters’ Foreign Exchange Window in April 2017 and his consistent retention of higher monetary policy rate to curb inflation and reduce pressure on the local currency.

The I&E forex window, which allows both investors and exporters to price dollar at what they considered the market rate, has brought great relief to the forex market and ensured rare stability of the local currency in the last two or so years.

Banking Industry
To this end, his tenure has brought great relief to the banking industry and its managers. Apart from the takeover of defunct Skye Bank and the establishment of Polaris Bank as a bridge bank to carry on the operations of its precursor, Emefiele has remained amenable to banks chief executives and provided support for those who need capital support to remain afloat.

His monetary policy stance has remained tight in view of the fluctuating prices of crude oil, Nigeria’s economic mainstay in the international market. Through the tight monetary policy, Emefiele has been able to drive down the inflation rate from over 18 per cent to 11.37 per cent as of the end of January this year.

BDCs
The CBN under Emefiele has regulated operations of Bureaux de Change (BDCs) to check rent-seeking among operators, depletion of the nation’s foreign reserves, unauthorised financial transactions, and dollarising the economy, among others.

He surrounds himself with people who share the values and work ethic necessary to maintain the standard of repositioning the banking sector for efficiency and effectiveness.

Emefiele and his team at the CBN have ensured stability in the sector, in spite of global and domestic challenges. There is no doubt that the bank under his watch is on the right track to guaranteeing the soundness and stability of the Nigerian financial system.

His vision of gradual reduction in key interest rates, building sector-specific expertise in banking supervision to reflect loan concentration of the banking industry, abolishing fees associated with limits on deposits and reconsider ongoing practice in which all fees associated with limits on withdrawals accrue to banks alone;

introducing a broad spectrum of financial instruments to boost specific enterprise areas in agriculture, manufacturing, health, and oil and gas, are rightly bring the desired results.

Meanwhile, industry stakeholders who spoke with our correspondent on Sunday night expressed delight at the move, saying Emefiele’s re-appointment will enhance stability in monetary policies.

The President, Association of Bureaux de Change Operators of Nigeria (ABCON, Alhaji (Dr.) Aminu Gwadabe, over the weekend, said the Investors and Exporters (I&E) Forex Window introduced by the CBN under Emefiele is having positive impact on the Forex market and should be sustained because of the stability it has brought to the market.

He said the government should pay more attention to promoting ease of doing business, lifting private and public enterprises and creating jobs for the people.

According to Gwadabe, there is a need for fiscal restructuring by ensuring that states become more efficient in revenue generation and less dependent on federal allocations.

“Government should focus on things that create jobs especially through small and medium enterprises by creating opportunities for them to have easy access to funds”, he said.

Gwadabe said the BDCs have over the years, remained a potent monetary policy tool for exchange rate stability.

The sector, he added, has helped the government in creating over 30,000 jobs for Nigerians, thereby reducing the unemployment rate in the country.

“The BDCs have continued to make foreign exchange available to the critical retail end-users thereby deepening forex access in the country.

The BDCs have also been enhancing price discovery and transparency in the foreign exchange market”, he said.

President, Civil Society Group, COCSG, Etuk Bassey Williams, lauded the governor of the apex bank on his adoption of some revolutionary policies that helped to stabilise the economy and sustain the value of naira throughout 2018.

He said the continued churning out of initiatives by the apex bank no doubt produced the desired results.

Bassey Williams noted that the efforts of the CBN governor to boost the availability of forex to end users through the banks’ retail outlets as well as the reduction of the tenor of its forward sales from the hitherto maximum cycle of 180 days to not more than 60 days from the date of the transaction.

According to him, “Measures aimed at strengthening the value of the Naira against the US dollar in the overall interest of the economy and Nigerians as a whole under Emefiele’s leadership has been remarkable as since February this year, the pumping of money into the forex market has significantly strengthened the naira against the dollars to close at N380/$1 at the parallel market last month.

“Also, aside direct sales to BDCs, fuel importers, airlines, manufacturers, agriculture sub-sectors have continued to benefit through the retail-Special Secondary Market Intervention Sales, SMIS, at a marginal rate of N310/$, has continued to help stabilise our economy and boost the nation’s GDP.”

The coalition also commended Emefiele for boosting the Federal Government’s local investment, following the CBN’s keeping of the Monetary Policy Rate, MPR, at 14 per cent as well as leaving the Cash Reserve Requirement, CRR, unchanged at 22.5 per cent and Liquidity ratio at 30 per cent, adding that they massively influenced growth and development and hence should be lauded.

The coalition praised the CBN on its steadfast relationship with other stakeholders through numerous special interventions and operations, emphasising that resultant effects have impacted positively on the economy.

Industry experts, however, believe that during this time of economic challenge and opportunity, Emefiele is who Nigeria needs as head of the CBN particularly because of his understanding of the Nigerian economy, it pragmatism and banking practices.