CBN and The Emefiele Years, By Nik Ogbulie

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A phase of stable economic indices could be spotted in a review of the Nigerian economy in the last five years. From a spiralling recessionary session for an economy laden with over-flowing population and dwindling revenue out- reach, it is only a conservative management policy that can make a difference in such a way that the country can pull through. The story of Governors of the Central Bank of Nigeria (CBN) is one that flows with varying degrees of dissimilarities at all times, but with a common feature of incongruous assessment by various governments and the people they serve. Sometimes their performances are underestimated. Only on very rare situations and times have they gained accolades, good enough for what they represented in the real sense. is has been why the exit and succession matrix in the noble institution have not really reflected the roles they played at their own times. Their ambitions to surpass the humbling tasks may have been high, but gaps to fill had remained quite herculean, even in the face of politics, intrigues, corruption, nepotism, professionalism and raging controversies. Most of the time the will to continue to factor some more development objectives into their programmes is doomed by the enraging clamour for change, …Change that is always carried out without effective measurement or proper evaluation. It is only in Nigeria and few other countries and empires that change have remained slogans of some sort, in their Central Banking administration.

Three countries whose economies have made remarkable growth within a short period had continued to urge their Central Bank Governors to move on and continue to build on the progress perceived to have been their winning ways. What this means is that there are very close possibilities that economies can do far better when monitored and adjusted by an existing team of Central Banking technocrats than when an entirely new team comes in.

This may be why the advanced economies rarely change their Central Bank governors unless there are strong systemic issues or the helmsman strongly insists he wants to go for personal reasons. To a lot of such economies, the appointment of the Central bank helmsman has nothing to do with strict adherence to the constitutional or statutory term or time frame.

If that remains the case, there shouldn’t have been the existence of the outstanding superstars the world had cherished who have managed the economies of many strong countries like the USA, United Kingdom and Asia. To a lot of them, time or term is nothing when there are so much to cheer. Most of such economies have continued to earn grade A ratings from top institutions in the world.

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There are great similarities between
time spent on national and international economic management and performance. Janet Yellen, immediate past Exchequer of the US Federal Reserve made her five years tenure a year ago and was urged to remain, but she opted to leave on personal reasons. No proactive chieftain of an apex financial institution has been asked to leave just because of rotation, ethnicity and politics because he is seen to have been positioned to function in an institution seen as the common denominator in any economy.

Manuel de Jesus Bautista of Honduras and Fai_Nan Perng, who led the Central Bank of Republic of China (Taiwan) ruled their Central Banks for 20 years and everybody can see the great benefit of the continuity, as these countries have maintained the A grade in global economic rating, having kept an oat all the indices that should be kept under control.

Among global economists, Central banks change management is shifting from quantitative easing (QE) towards quantitative tightening and this can guaranty result-oriented continuity. The last year rating of the CBN by a global financial rating out t offered a good plus to it in spite of the various underlining issues in the Nigerian economy, indicating a focused management approach since exiting the 2015 recession. The very good rating of the CBN according to the global agency was based on, “ inflation control, economic growth, currency stability and interest rate management. Also considered seriously was the determination of the CBN to protect its independence in the face of political pressure and its skills in supervising financial institutions”.

The agency wrote as it eulogises Emefiele’s skills, “the Central Bank of Nigeria has held its benchmark interest rate unchanged at 14% for a second straight year as it seeks to hit its single-digit inflation target. The inflation rate declined to 11.2% in June, mainly due to a slower increase in food prices.

The economy is gradually pulling out of recession as a result of positive developments in the oil sector”. There are strong indications that the time is here for most of the persistently negative indices would soon be timed out, as they could no longer resist the continued applications from the apex bank.

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Many successful individuals and institutions build on the progress they have so far achieved in the desire to keep some enduring legacies that eventually become hallmarks of sustainable economic growth and development. In the history of the CBN, only four past governors have been able to keep legacies that have been the building blocks for economic growth initiatives. They are…Ekong, who managed the Nigerian economy from crisis point to a stability point. The other is Abdulkadir Ahmed, whose disposition and calculated professional balancing produced a most serene and respected CBN. Joseph Sanusi, who initiated the move to protect a nearly destabilized CBN, rose above expectation by clinching on the struggle for the Independence/autonomy of the CBN, which his successor followed to a logical conclusion. Then came Professor Chukwuma Soludo, whose thinking produced a radical consolidation formula that offered great fillip to banking sector management and a new impetus that threw up the financial sector into a mirage of innovations, ranging from structural transformations to electronic and cashless banking sector infrastructure and innovations. These have been the four builders of a consolidated Financial Enterprise in Nigeria.

One good benefit of having a core operational banker as a CBN governor has been reverberating in the affairs
of the apex bank since the Emefiele years. The concentration of stabilizing the rates regime, instituting strong regulatory framework and redefining the activities of non-bank financial institutions can be seen as the hallmark of economic stability in Nigeria today.

The fact that the Nigerian currency has been saved from galloping foreign exchange trends, and an almost fixed interest rate situations in spite of the very unstable revenue records are the ideals the current CBN management has fourth and won. As a matter of fact, Emefiele has built a bulwark against a somewhat haemorrhagic currency whose rate against the mediocre currencies within the emerging markets lost some 50 per cent within a fell swoop. Today, the Naira has maintained a stable rate since the last three years while the interest rates have continued to hover within a closed limit within the same period. The CBN used to be the Central Bank of Nigerian banks, but today it is seen as the Central Bank of the Nigerian economy, dishing out deals on unemployment, agriculture, SMEs, housing and what can be called a total concern for deep infrastructure transformation.

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With close examination and regulation of the rules of engagement in the market, changes can be predicted to the extent they remain friendly to transactions and investments, especially, with reference
to the encouragement of SMEs, services and control of market volatility. What this means is that, if this market stability holds sway in the next four years, the economy will continue to witness some remarkable growth as more productions have been taking place due to robust access to forex and controllable interest regime.

These are the building blocks to a new economy that target the domestic growth in productivity in the face
of dwindling revenue. It is on record
that there has not been a time in the history of Nigeria when the level of forex stability has been under such a control for a period of two years. Today, the gap between the official exchange rate and the black market rate has sporadically been closed, to the extent that illicit forex market is vanishing, as operators can no longer enjoy the very wide margin.

The fact that the rate of forex is higher is not the main concern of investors, but the control of its level of flexibility. The Nigerian economy can build on this continuity to achieve a more enduring record on every facet of its activities over a long time. In a situation where all indices contradict the essence of change, continuity becomes a raison d’etre. Political administrators are always seen to align with institutions that give them the stability
to deliver their promises.

As a matter of fact, the CBN has been a bold ally of the current Nigerian political leadership, and it shows in many professional ways where economic management has been scientifically streamlined. e Emefiele years can be seen to have been highly very strategic in delivery. By the next rating of global Central banks, the CBN will no doubt make a quantum leap. As a matter of fact, any astute manager of resources for a nation has no constituency for his chances to be deprived by mare permutations. Emefiele’s constituency is the Nigerian economy!!

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