The Governor of the Central Bank of Nigeria, Godwin Emefiele, broke a 20-year-old record on Thursday when President Muhammadu Buhari sent a letter to the Senate for confirmation of his second five years tenure as head of the regulatory bank.
Not many people anticipated the reappointment of Emefiele by President Buhari for a second term in office considering both historical factors and speculations around the Presidency.
In March this year, there had been speculations that President Buhari had asked the CBN governor to proceed on terminal leave ahead of June 3, anniversary of the expiry date of his appointment.
The speculation was predicated on some unconfirmed obnoxious claims that every CBN governor is expected to proceed on a three-month leave ahead of the expiry of the tenure in office. Rumour also had it that the President was displeased with his performance and therefore would want to replace him with his own choice candidate.
In fact, there were rumours of key people jostling to replace the CBN governor within the rank of the ruling party after a successful prosecution of the general election and the need for the President to compensate them for their support.
However, there was no evidence that backed up such claims. Eventually, the speculation was debunked by both the Presidency and the regulatory bank’s spokesman, Isaac Okorafor.
From day one, Emefiele’s tenure has always been a subject of controversy, ranging from speculation that President Buhari had planned to dispense with his service shortly after the May 29, 2015 inauguration because of his link with the previous administration.
From the evidence that emanated from the country’s anti-graft agency on the $2bn arms scandal that involved the former National Security Adviser, Sambo Dasuki, the CBN governor was speculated to have been implicated and was on his way out.
The public claims by both the Economic and Financial Crimes Commission and President Buhari that the then government withdrew large sums of money in both local and foreign currencies from the regulatory bank without due authorisation also aided some of the speculations about possible short-lived tenure for Emefiele.
Again, came the currency crisis in 2016, which saw the naira depreciating rapidly to around N550 to the dollar in February 2017 and the attendant public outcry both against the government of President Buhari and the apex bank governor style of managing the economy.
Many Nigerians had called for the removal of the CBN governor to save the naira and the economy at large. The fact that the economy went into recession for the first time in 25 years did not help his case.
Like a cat with nine lives, Emefiele escaped the public anger and his job was secured. However, since April 2017, when the governor introduced the Investors’ and Exporters’ Foreign Exchange Window to help the country stem capital outflows and support the local currency, the naira has remained stable.
The governor’s direct intervention programme, Anchor Borrower Scheme, which extends credit to rice farmers in the North and other parts of the country has continued to endear him to the President and the ruling All Progressives Congress.
With the intervention scheme comes increase in rice productions and massive drop in foreign exchange spent on importation of the commodity. The rice success story has also rubbed off well on the government’s electoral victory at the last presidential election.
His tenacity in sustaining multiple exchange rates against all odds and criticism by the international financial institutions and analysts who had predicted woes for the local currency unless he reverses his policy has also stood him out.
The President and his kitchen cabinet regarded his unwavering support for agricultural sector through the initiative on rice and lately cotton growing as a plus to him and his contributions to the government’s success. The country has witnessed rapid growth in rice production within a short period thanks to the CBN support for the agriculture sector, which has also had a positive impact on the political support base of the government.
The exclusion of 41 items from the CBN foreign exchange allocation list has helped reduce pressure on the available dollars, conserve the country’s forex buffer and also provided some sort of equity for the government as a supporter of local content development and indigenous business growth.
I think the nomination of Emefiele for a second term falls in line with the President’s characteristic soft spot for loyalty and stable hands to help him realise his agenda for the country.
In spite of the subtle opposition within the ruling party against s second term for the CBN governor, the President was said to favour Emefiele because of his unwavering support for the government policy and his resistance against the International Monetary Fund and the World Bank’s calls for the devaluation of the local currency through the abolition of the present multiple exchange rate regime.
However, his reappointment for a second term in office is a clear signal that the government was not interested in any paradigm shift in policy direction at the CBN. It also means that the President is pleased with the governor’s present pace of monetary policy and would want the sustenance of the present regime.
The Bretton Wood Institutions have consistently called for the stoppage of the CBN direct intervention role in the economy, which they claimed has distracted the regulatory bank from its core role in the economy.
To be concluded
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