The Cen­tral Bank’s new helms­man

Daily Trust - - VIEWS -

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.

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