Emefiele’s Detention: Experts Raise Concern Over Economic Impacts

Economic experts have raised fears that the continuous detention of the suspended governor of the Central Bank of Nigeria, Godwin Emefiele may cause a set of distrust in the country’s financial system.

Mr. Emefiele is currently being held in detention for over 30 days by the State Security Service (SSS) for having a shot barrel gun and live cartridges with expired licence.  

Professor of economics at University of Benin Hassan Oaikenan said failure of the authorities to provide a watertight case against Emefiele and his removal from office could create a cobweb of distrust over the financial system and cause panic and fear to rip through the system, causing a possible hurricane of investments’ reversal out of Nigeria’s ailing economy.

Professor Oaikhenan said, “Not unexpectedly, the way Emefiele was removed and detained (in the manner of a common criminal) would further dent whatever remains of the credibility of the financial sector in particular and the economy in general, considered against the background of the strategic importance of the Central Bank in every country and its economy.

“It has the potential to create a huge crisis of confidence for the country’s financial sector before serious minded foreign investors and foreign financial institutions, with the potential adverse implications for the rating of the economy by rating agencies. The cost and consequences of the crisis of confidence so created and the poor rating that it could engender will only manifest with the passage of time!”

The Nigerian economy is already lying comatose, with serious and genuine foreign investors having left the country in droves and progressively over the years, given the hostile business in the country, as evidenced by the country’s consistent poor showing in several key indicators of the soundness of an economy, such as ease of doing business, country competitiveness indicators, corruption perception index, etc. 

Oaikhenan said having left in their good numbers, the genuine and serious-minded investors have largely left the Nigerian economy for scavengers, masquerading as foreign investors!

Also, professor of financial market in Nasarawa State University, Keffi, Joseph Uwaleke said the rule of law should apply in handling the issues around Emefiele and his stewardship at the CBN. “This is the minimum expectation from investors and foreign development partners who monitor events in the country’s financial system.”

Some experts say with Emefiele’s removal as head of the CBN, many lenders and investors (foreign and local) would become imperilled.

In that same regard, chief executive officer, Dairy Hills Limited said the rule of law is one of the most important metric foreign investors use as a tool to measure the ease of doing business, and grounds for which to deploy capital into a country.

He therefore said that the federal government needs to understand that every single thing it does is a signal to international investors on how issues on ‘’fair hearing’’, ‘’fundamental human rights’’, “equality before the law’’ and ‘’independence of the judiciary’’ is situated.