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With the rate the Naira is falling against major currencies such as the dollar and pounds, many Nigerians are upset and their anger is righteous and justifiable.
Anyone not angry about the exchange rate and the stagflation we are in needs to be re-examined. The economic outlook is indeed bad, hence the search for a scapegoat.
This article is not to make excuses for Emefiele because he too has courted some of the controversies surrounding him . He that fetches ant infested wood invites lizards to a feast. When Emefiele allowed his name to be dragged into partisan politics as a potential APC presidential aspirant, he unwittingly invited the dirt thrown at him.
The position of the CBN governor whose duty it is to regulate the monetary policy and stabilise prices is that which should not be partisan. This is why great minds like Allan Greenspan who served as the Secretary of US Federal Reserve for 16 years survived four presidents that included Democrats and Republican presidents. Emefiele in his eight years as CBN governor was appointed by a PDP-led administration and reappointed by the current APC-led administration. That ought to have informed him to steer clear from politics. The justification or drawbacks of that misadventure however is a topic for another day.
Should Emefiele be crucified because of the falling Naira and rate of inflation which currently stands at 19.6 per cent? The answer may be ‘Yes’ and ‘No’ depending on where you stand and particularly your understanding of the current currency and economic crisis.
But before we crucify Emefiele, here are some of the reasons for our economic and currency woes, and most of the reasons are outside the control of the CBN and not caused by Godwin Emefiele.
For instance, it is not the fault of Emefiele that oil prices plummeted twice between 2016 and 2021.
It is verifiable that none of our three refineries are functional and consequently we are expending dollars to fund importation for oil we can ordinarily refine locally.
It’s not the fault of the CBN and Emefiele that we are paying nearly six trillion Naira in oil subsidies which automatically wipes out any gains we would have made from crude oil sales. For a fact, CBN in nearly one year, has not remitted a dollar to the Federation Account and 80 per cent of our forex earning is dependent on oil and gas .
If NNPC is reporting zero profit, where do we expect to get the dollar from to fund our insatiable appetite for imports of good and services ?
It’s not the fault of the CBN that our education and health sectors have collapsed while we spend billions of dollars to promote medical and education tourism. We are expending over $50bn in those two sectors alone.
It’s not the fault of the CBN or Emefiele that our fiscal authorities are not in sync with our monetary policies and interventions.
Monetary policies are by no means a magic jujitsu. The monetary policy and fiscal policy must correspond to deliver desirable objectives. Can we in all honesty fail to hold our fiscal authorities unaccountable while we crucify those responsible for our monetary policies?
Mind you, I am not asking those that want Emefiele’s head on the chopping board to leave his head. After all he is the CBN governor and should be able to weather the storm. But before crucifying him, kindly understand the basic issues of why we are in this mess, because he is not the reasons for our currency crisis and economic collapse. When I read Kola Amzat’s list of great CBN governors where he ranked Emefiele as the worst, I shrugged because he failed to factor in the time and seasons those that deserved his honourable mention supervised our monetary policy and what interventions they made and the fiscal responsibilities and authorities in place that they had to contend with. The honourable mentions by Amzat in his treatise were Alhaji Aliyu Mai Bornu, the first indigenous CBN governor, Clement Nsong, Ola Vincent and Adamu Ciroma who he only nominally listed. Others were AbdulKadir Ahmed, whose achievement he gave as “the longest serving CBN governor” and that of Joseph Sanusi as “the very industrious” and Chukwuma Soludo as “data and statistics savvy”; and of course that of Lamido Sanusi, as “banking sector reformer of note.” Indeed Nigeria has never lacked men of vision, ideas and exceptional qualities who have presided over the apex bank and registered bold footprints on the sands of time. But stating that Emefiele does not rank among them is deliberately subjective if not outright mischievous.
Comparisons of tenures or occupiers of offices are properly done by laying the key achievements and challenges side by side.
But what Kola Amzat did was just reel out names of former CBN governors and declare them as men with “admirable banking and financial skills, helicopter views on the economy” and declaring that Emefiele is not one. This sort of assessment, if it must be called one, is a lazy man’s job, though his main motive for writing the piece, which is the removal of Emefiele from office, could also be seen in plain sight.
In a rare feat, Godwin Emefiele is on his second term as CBN governor, having discharged his first term creditably and meritoriously. Not all the former CBN governors listed as most outstanding got reappointed. Emefiele’s reappointment by two different regimes is a reward for excellence, otherwise it would be reinforcing failure as Kola Amzat wants Nigeria to believe.
The CBN under Emefiele on record has defended the naira from the outset. Naira exchange for other world major currencies has been understandably problematic when juxtaposed against the global economy, which has taken so much beating in the last decade, ushered in by the recent global economic meltdown. Apart from factors already listed above , one can see why the naira is facing such challenges.
This is why we must also take into consideration our fiscal authority and responsibility and ask the right questions on whether the fiscal policies and responsibilities are supportive of our monetary policies. The two, I maintain must agree and be in sync to achieve desired objectives.
Also incurably defective is Amzat’s claim that the Emefiele era has caused so much pain, agony and tribulation for Nigerians and has succeeded in impoverishing Nigerians, as their purchasing power has continually remained on a downward trend. He even added that on account of the dwindling fortunes of the naira, many manufacturing companies have gone into extinction as if this is a trend that is just appearing on the scene or the making of the CBN. How do we blame Emefiele for our decades of consumption and rental economy instead of production economy.
The ignorance of Kola Amzat on the workings of the economy is apparent in all parts of his essay.The CBN is statutorily and primarily saddled with monetary policies and not with fiscal policies per se, which is directly related to the buoyancy of the economy. The purchasing power of citizens is not solely determined by monetary policies but to a lesser degree, in combination with fiscal policies. The purchasing power of citizens is essentially predicated on what money can buy and cannot be divorced from the availability of goods and services, which the CBN cannot control.
Take for instance dwindling agro products and food insecurity caused mainly by shrinking production of food induced by insecurity, which Emefiele and CBN can do nothing about. And yet the CBN has gone out of the way to intervene in food production through Anchor Borrowers Fund.
Kola Amzat ought to have first read the mandate and schedule of duty of the Central Bank and Federal Ministry of Finance before writing his piece. Otherwise, he would not have lumped together fiscal and monetary responsibilities and dumped both on CBN and Emefiele.
Definitively, Kola Amzat rightly noted that monetary policy is dealing with interest rates and other sets of actions designed to control a nation’s overall money supply. Also that monetary policy management ensures that CBN takes control when the money supply in the economy needs to be contracted or expanded and that is what the CBN is precisely doing with the defence of the naira.
