The Central Bank’s new helmsman
Last week’s confirmation by the Senate of Mr Godwin Emefiele has paved the way for the former managing director of Zenith Bank Plc to assume office as the next Governor of Central Bank of Nigeria when the term of its current substantive occupant, Malam Sanusi Lamido Sanusi, expires at the end of May.
Mr Emefiele will be taking office at a most critical and challenging time for the apex bank and its role as the nation’s financial regulator. This is not just due to the unfortunately turbulent and politicised circumstances under which he will begin his work. Since it commenced business on July 1, 1959, the bank has had to contend with many other daunting challenges associated with managing the fortunes of a developing economy.
The statutory functions of the CBN include the formulation, execution and monitoring of a cocktail of monetary policies to promote and maintain financial stability and economic development, and ensure sound and safe financial operating system for Nigeria. In recent years, these functions have been carried out in the face of systemic weaknesses such as inadequate management of financial resources, increasing dependence on imports and escalating associated bills as well as the economy’s weak export base.
Meanwhile the service delivery expectations of the CBN include improvement in the management of the interest rate regime, facilitation of adequate finances for agriculture and other real growth sectors of the economy, consolidation of banking reforms and expanding its mandate to focus on development issues. The new CBN Governor certainly has his duties cut out for him, even before his formal assumption of duty.
That is why Mr Emefiele’s disposition towards his tenure as the Governor of the CBN is of interest. Coming from one of Nigeria’s leading commercial banks, the new CBN chief with take office with an impressive pedigree of professionalism, experience and exposure to the variegated fields of finance.
The Central Bank operations in Nigeria have not always followed the straight-line approach. In fact, such has always demanded additional proficiency of the leadership of the institution, in understanding the political nuances of the nation’s leadership makeup, as well as the extent to which economic inequities can distort outcomes of policy prescriptions and permutations. This is a crucial area in which Mr Emefiele will have to devote serious attention to in order to make meaningful headway as head of the CBN.
It is instructive that the new helmsman has not started off with inquisition on the tenure of the man he will succeed, Malam Sanusi. Instead, he paid tribute to some of the banking reforms that Malam Sanusi introduced, and which have been nationally and globally acknowledged. It would be foolhardy to believe that the powerful institutional cleavages that had atrophied the sector, but which Sanusi shook and dismantled, have faded from the scene. It would take a wrong move, a moment of inattention, for the entire reform structure to unravel. Mr Emefiele must be watchful and guard against that happening. Several of the nation’s bank executives who helped themselves to depositors’ money, and were tried convicted, while others are awaiting their deserved chance to do time behind bars, constitute an eloquent legacy to the rectitude of Sanusi’s initiatives that his successor should sustain and improve upon.
However an area where the new CBN Governor will do well to steer clear of is the penchant of engaging in contentious politically charged public debates and utterances that might redound negatively on the apex bank’s core policy instruments. Although an occupant of such high public but sensitive position should feel unduly gagged, what needs to be said outside financial regulatory activities must be moderated to add value to public debate and as clarifiers.