It was 1,460 days on June 4, 2018 since Godwin Ifeanyi Emefiele assumed office as the governor of the nation’s apex bank. It was a time the nation was preparing for its 2015 general elections, with the attendant economic uncertainty, particularly as the financial sector was bedeviled by forex crisis.
Not minding his 10-point agenda to reposition and put the economy on a path of sustainable growth, quite a number of global exogenous factors also exposed the vulnerability of the Nigerian economy. Consequently, Nigeria’s gross domestic product (GDP) declined, which culminated in recession in 2016. Inflation was almost 19% and the Naira exchanged for N525/$1 in March 2017.
The economy at the time was challenged by the continued downslide in the international price of crude oil, Nigeria’s major revenue earner, snowballing into foreign exchange crisis. No excuse to the enterprise of currency speculators, bettors and their accomplices (local and foreign), who waged unrelenting war against the Naira. The foreign reserves were at its lowest ebb and the economy was in the doldrums.
And just like the former military president, Gen. Ibrahim Babangida said during his reign that Nigeria economy had defied all economic theories, Godwin Emefiele may have wished he was not picked for the job at the time. He was vilified and harassed, yet remained firm and dogged.
Assessing his four years in office, one can be confident to say that, today, Emefiele can be adjudged to have managed the economy well.
Giving insight into what would be his mission at the apex bank, he came up with a 10-point programme to spend his energy and resources to build a resilient financial system that would serve the growth and development needs of the people using development bank strategies as the fulcrum of his policy to drive the economy. Not only that, Emefiele committed himself to creating ‘a central bank that is professional, apolitical, and people focused …’ This mission may have been propelled by his determination to bequeath a sound economy to Nigerians. This conclusion is apt because Emefiele did not only inherit a battered economy, but one with high interest rate, high unemployment rate and negative growth.
Determined to leave a mark, he redesigned the Bank’s monetary policy architecture to suit the needs of the economy. He modified the Agriculture Credit Guarantee Scheme (ACGS), Commercial Agriculture Credit Scheme (CACS), the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), Small and Medium Enterprise Credit Guarantee Scheme (SMECGS) and created the Anchor Borrowers’ Programme (ABP) among many other initiatives he enunciated.
Confronted by the volatility of oil prices and absence of economic diversification, he adopted a home-grown therapy leveraging on demand management strategy through restriction of forex to some 41 items that can be produced locally. This did not go unchallenged by vested interest groups culminating in JP Morgan delisting Nigeria from its Government Bond Index. However, the decision has helped to reduce drastically Nigeria’s import bills from an average of about $5.5 billion to $1.9 billion by mid-2017. Also in June 2016, the CBN came up with a new framework for foreign exchange, creating Financial Market Derivative Quotation (FMDQ), a platform through which exchange rate would be market-driven to arrest the despicable enterprise of speculators.
With a programme to build a sound economy through the Bank’s development finance initiatives, Emefiele intervened in critical sectors of the economy like power, aviation, agriculture, etc. The Anchor Borrowers’ Programme designed by the Bank in conjunction with some state governments and some private sector groups has gulped about N55.52 billion as support to over 250, 000 small-holder farmers. This was aimed at providing them with prerequisite training, tools and funds at single digit interest rate to enable them improve the cultivation of rice, cassava, maize, cotton, wheat, palm oil and soya bean. In the past two years of the programme, it has created, directly, about a million jobs and, indirectly, over 2.6 million jobs. And to tap into the resourcefulness of the youths, the CBN governor unveiled Youth Innovative Entrepreneurship Development Programme (YIEDP) in conjunction with some commercial banks.
Over a year ago, precisely on April 21, 2017, the Investors and Exporters Window, code-named I&E, was introduced to rein in the forex crisis. It became an instant recipe for the troubled forex market and within few months of its operation attracted over $54 billion into the economy. The Window has enhanced transparency in the market and has helped to sustain forex availability to end-users. More importantly, the Window restored investors’ confidence in the economy.
Emefiele’s strides include his strive to ensure MSMEs’ improved access to credit. He worked with International Finance Corporation (IFC), an affiliate of the Bretton Wood Institution, the World Bank, to sponsor a Bill on Collateral Registry. Today, the Secured Transactions in Movable Assets Act, also known as Collateral Registry and Credit Reporting Act, is a law in the country, courtesy of the understanding of the National Assembly.
Another initiative, PAVE (Produce, Add Value and Export), is an underlining philosophy of Emefiele, with the intent to urge Nigerians to ‘produce what we consume and consume what we produce’. In summary, the objective is directed at Nigerians to take their destiny of solving the macroeconomic challenges in their hands.
The CBN governor may have been misunderstood in the early days of his regime at the Bank; however, his strides, commitment and forward looking approach have endeared him to local and international investors. Even, President Muhammadu Buhari recently, and on different occasions, alluded to the CBN governor’s effectiveness as the main reason why he has retained his office despite the fact that he was appointed by his predecessor.
The president said he wanted Emefiele to help his administration revive the economy and put it on the path of sustainable growth.
Emefiele has also been honoured at home and abroad with awards acknowledging his patriotic and professional roles in steering the affairs of the economy and helping to ease Nigeria out of economic recession with innovative monetary management tools.
– Abdukadir Samsudeen is a post graduate student of the University of Maiduguri.