Recently, the Governor of Central Bank of Nigeria, CBN, Mr. Godwin Emefiele got some sticks. Strangely, the flaks came from an eminent group, the Nigerian Economic Summit Group, NESG. Emefiele’s ‘crime’ was that he was perceived to be pushing for immunity for himself in a revised bill passed by the National Assembly. The bill sought to amend the Banks and Other Financial Institutions Act, BOFIA, now in its 29th year of life. This is as strange as it’s perplexing, even disturbing.
Yet, as it turned out, the jab at Emefiele was not from the full house of NESG. Some Board members of the Group issued a press statement to discredit the CBN Governor on the COVID-19-induced activities of CBN and on his perceived plot to shield himself from any form of litigation with an immunity clause. However viewed, the actions of NESG are unfounded and their anger misplaced for very obvious reasons.
The issue of immunity embedded in Acts setting up agencies which dominate the nation’s fiscal management ecosystem is not novel. It’s as old as the agencies themselves. Acts of parliament setting up the Securities and Exchange Commission, Central Bank of Nigeria, AMCON, NDIC and BOFIA all have immunity clauses which framers of such Acts in their wisdom deliberately enshrined to give protection to the agencies and their leadership against frivolous litigations.
The immunity clause is therefore not new and could not have been sponsored by Emefiele or his proxies. It is firmly operative and cited in Section 53 of the extant BOFIA. Emefiele was appointed as CBN governor in 2014 by Goodluck Jonathan. The immunity clause in the extant BOFIA and other Acts setting up allied agencies in the financial space predates his appointment. The only difference is that whereas it sits at Section 53 of the extant Act, it’s moved to Section 51 of the amended bill. It’s by far older than Emefiele’s tenure as CBN governor. It’s therefore a sore point of bewilderment why a body as enlightened as NESG would feign ignorance of such age-long provision which is not peculiar to Nigeria. Reserve banks in some developed and developing jurisdictions have had to be insulated by their respective governments essentially to free them up from legal frivolities and much more to ensure they are not bullied by powerful individuals, agents of state and corporates from performing their core duties of monetary policy management.
Given the high-profile status of the Board of NESG, it’s difficult to understand their motive and intendment. It gets more worrisome when they had to recourse to media lynching of the CBN governor. They could still have effectively communicated their grouse to Emefiele via more discreet channels. But whatever their intent, the premise of their argument is negated by its own hollowness. It’s stripped of logic in a manner that tends to mischief.
The nation’s economy is in the straits. At a time like this, consensus-building and strategic synergies are key to survival. I do not envy Emefiele. He runs the apex bank at the most challenging moment. But he has shown both gumption and capacity to pull through the fog. He’s our own Allan Greenspan, the iconic central banker who managed the United States Federal Reserve from 1987 to 2006, a good five terms spanning 19 years. Greenspan was nominated by Ronald Reagan (Republican) but retained by Bill Clinton (Democrat) before he eventually bowed out under another Republican government of George W. Bush. He was famed as the consensus man. He had a mastery of winning the consensus of Federal Reserve Board members. Greenspan had the mis(fortune) of serving under very severe economic climate aftermath of the global stock market meltdown of 1987. But he weathered the storm.
In a sense, Emefiele’s trajectory as Nigeria’s number one Central Banker mirrors the Greenspan story. He’s been CBN governor under three extremely harsh phases of the nation’s economy: When the economy slipped into recession in 2016; when crude oil prices plummeted drastically in the global market and when COVID-19 pandemic tore through the earth rendering national economies comatose. Yet, in all of these phases he has guided the economy from total collapse, ensured a healthy external reserve and more significantly made targeted interventions in agriculture and manufacturing in the most telling manner. He does not deserve purloining, he deserves plaudits.
Emefiele is a rare Nigerian, fated to history. He broke a voodoo cycle of extreme partisan politics. He remains the only CBN governor in modern Nigeria history to be appointed by a ruling political party and not just retained but reappointed by another political party. Appointed by the then ruling PDP government in 2014, he got his mandate for another term renewed by the ruling APC government of President Muhammadu Buhari. Other appointees of the former PDP government never got lucky. They were booted out, some shooed out of office ahead of their statutory terminal dates.
Not so, this Emefiele. And it’s not about having a luck charm. It’s about capacity and competence. President Buhari has found in Emefiele a devoted crisis manager. Obviously, Emefiele saw ahead of most Nigerians. As far back as 2015 he was vocal in pushing for a culture of saving for the rainy day. Then, crude oil earnings were still comparatively good. He wanted the excess crude cash saved. But the powers that be especially the governors through the Governors’ Forum demanded vehemently for the sharing of the money. Of course they had their way. Less than 12 months later in May, 2016, the nation’s economy drifted into recession.
To attack Emefiele is to attempt to ignore how his interventions and tough decisions have saved the nation’s economy from total collapse. When in June 2015, he placed over 40 items on ‘not-valid-for-forex’ list, many did not see the wisdom in that masterstroke. Today, not only did the policy reduce the asphyxiating pressure on our external reserve, it also helped to truly diversify the economy by encouraging local production of some of the banned items especially the big money guzzling ones like rice. We now eat home-grown rice. Through the Anchor Borrowers’ programme, Nigerian farmers have been empowered. The nation’s agriculture value-chain enhanced. And it’s thanks to this programme that at the peak of the global lockdown when nations restricted export and import that Nigerians still could access a major staple like rice.
Perhaps, it might just be that Emefiele’s fiscal frugality and prudence especially his strict control on who gets forex, as against the old order of forex bazaar for all, has earned him criticisms. This beggars belief. Yet, even if it is, he should count it as the price for good corporate governance in a society that is long inured to the contrary. But he must keep his eyes on the ball because the auguries of yet another round of denigration are still looming on the horizon. He should not be fazed by this asinine unreason nor bow to the bullying mob.
He should be acknowledged as a CBN governor who favoured subsidy for production as against subsidy for consumption. This is basic development economics and I just wonder why certain persons are not comfortable with it.