Anytime the Governor of Central Bank of Nigeria (CBN) retained benchmark interest rate at 14 per cent, and he has done it for many months, he received a mix of cheers and boos, some of them very harsh.
A popular economist who usually reviewed the decisions on television called the rates retention a “do-nothing” decision, which was taken by some to mean cluelessness.
Opposition against Emefiele had, indeed, heightened in September last year to earn him the label of “stubborn Governor” when he ignored the advice of Finance Minister Kemi Adeosun to reduce monetary policy rates.
A day before the MPC meeting, Mrs. Adeosun, apparently voicing the concern of manufacturers, urged the CBN to consider cutting the 14 per cent benchmark interest rate to support government’s stimulus plan to borrow cheap funds locally, and to bail out the economy.
For a man who was seen by some of his fierce critics as a wimp, Emefiele was expected by them to take the advice hook, line and sinker. They must have been disappointed. In a unanimous decision, MPC left the prevailing rates unchanged, signaling a lack of consensus in the government’s economic team on the best way to guide the economy out of recession.
“That is the stubbornness of a clueless man,” an economic commentator had said then. “The man is just stubborn. Don’t also forget the 41 items he has continued to restrict forex access to.”
In fact, some people had expected Emefiele to be fired after that time. Clueless or stubborn, Emefiele stayed on.
Managing interest rates and inflation requires delicate balancing because of their inverse, see-saw, relationship.
The “do-nothing” story was to change last September. With the economy out of recession and the rate of inflation dropping for the seventh consecutive month to 16.01 per cent in August, the comment of the highly respected economist was widely expected. “It is the same do-nothing decision, but it appears to be working,” he had confessed. The reward for focus and perseverance!
Louder and more visible commendations for the CBN came soon after that.
Encouragingly, the current re-assuring image of Emefiele is a sharp contrast to the subdued version he took to Plot 33, Abubakar Tafawa Balewa Way, Abuja, on June 3, 2014 to start the plum job of Governor of the Central Bank of Nigeria.
Before the trip to Abuja, he served as Chief Executive Officer and Group Managing Director at Zenith Bank Plc, a very high profile job in one of Nigeria’s flagship private enterprise.
Despite the remarkable success of the bank, he served under the towering image of Mr. Jim Ovia, which somehow eclipsed Emefiele’s fine qualities. Mr. Ovia is the founder of the bank where he also worked as CEO until 2010, when he transferred into the chairman role.
In Abuja, where Emefiele replaced the current Emir of Kano Emir Muhammadu Sanusi II (Sanusi Lamido Sanusi), he had walked into the shadows of another towering image of a bright and vocal economist and banker, who had left in controversial circumstances. And in a storm!
Emefiele is a relatively quiet person; this quality prompted oppositionists to hastily conclude that the Jonathan government had opted for a pliable governor, offered by his supporters.
Who is Godwin Emefiele?
He is from Ika South Delta State, but a Lagos boy. He was born in Lagos, Nigeria’s commercial capital, where he began his primary school education at Government Primary School, Victoria Island, formerly Ansar-U-Deen Primary School, Igbosere, Lagos. He continued at Maryland Comprehensive Secondary School, Ikeja, Lagos. People raised in Lagos are noted for their street-smarts and so Emefiele couldn’t be a pushover. Observers say he is much tougher than he looks.
He proceeded to the University of Nigeria, Nsukka where he obtained his Bachelor of Science Finance & Banking (Second Class Upper). To that he added an MBA as the Best Graduating Student in Finance at the same university.
He went on to deepen his knowledge of Macroeconomics at Oxford University having obtained various qualifications and executive education studies in Negotiation, Strategy, Leadership, Critical Thinking, Delivering Value/Profit from Harvard University, Stanford University and University of Pennsylvania, Wharton Business School. Before he became Group Managing Director of Zenith Bank, he had served as the Executive Director in charge of Corporate Banking, Treasury, Financial Control and Strategic Planning of Zenith Bank Plc. The new Governor of the Central Bank of Nigeria has over eighteen years of banking experience.
He has some teaching experience as a lecturer at the University of Nigeria Nsukka, and University of Port Harcourt, respectively where he lectured Finance and Insurance before he finally decided to go full-time.
The CBN Governor
Emefiele, therefore, couldn’t have been a wrong choice for the top banking job, but barely a year after his appointment another storm made a landfall at the CBN headquarters. Questions were raised about the bank’s role in the movement of monies for the Jonathan’s campaign. The storm has calmed down now, but while it raged Emefiele was calm, focusing rather on his work. He is said to be a workaholic.
Asked why he looked slightly emaciated at the recent IMF/World Bank meeting in the US, a source close to him explained jocularly:”The Governor needs deliverance from two sources. One, the demon of work. Two, the demon of no rest. Your observation was correct.”
His family may be uncomfortable with those demons but a fragile economy in need of painstaking care needs them.
Another Emefiele advantage is his devotion and patriotism, which he wears silently in his green ties. He wears no other colour these days. The source explained it more directly this time:”The green ties are a symbol of patriotism. It keys into his philosophy that the nation comes first and the welfare of the ordinary Nigerian should underpin public policy.”
The mix of all of those Emefiele qualities, including “stubbornness” is paying off now. As an immediate example, the restriction on 41 items has engendered domestic production and consumption reducing dependence on the imported items; employment generation, improved domestic capacity and conservation of foreign exchange.
Generally, the CBN’s forex policy has stabilized the exchange rate, even though the desired expectation has been to have one rate; increased forex liquidity; provided easy access to forex for capital and raw materials importation; availability of forex to MSMEs; ease of payment of tuition fees, medicals, BTA/PTA, etc; and boosting the capital market.
For his efforts, recognition came for Emefiele in the US during the last IMF/World Bank meeting where he was awarded the Forbes 2017 Best of Africa Innovative Banking Award.
President of Forbes Customs Emerging Markets, Mark Furlong, said the award was in recognition of Emefiele’s courage and determination in using monetary policy to ensure financial stability in Nigeria.
The Buhari “award”
However, for all his green ties, the commendation that may excite Emefiele most is the veiled one from President Muhammadu Buhari. It came in the President’s October 1st address to the nation: “With respect to the economy, the Government has remained pro-active in its diversification policy. The Federal Government’s agricultural Anchor Borrowers Programme, which I launched in November 2015, has been an outstanding success.
The Anchor Borrowers Programme is one of the CBN’s key intervention programmes.
A job done well attracts more work. The President again disclosed that: “A new presidential initiative is starting with each state of the Federation creating a minimum of 10,000 jobs for unemployed youths, again with the aid of CBN’s development finance initiatives.”