Lessons from Emefiele’s CBN
NO one should doubt the magnitude of what Nigerians are going through today under Bola Tinubu presidency.
The economy has almost collapsed. The latest report from the National Bureau of Statistics (NBS) shows that the Gross Domestic Product (GDP) has fallen to as low as 2.74 percent. Living cost hike is brewing nationwide revolt. Protesters are looting truckloads of foodstuff in some states. Insecurity is squeezing everyone to a corner. An unprecedented period of discontent is looming if things don’t change for the better. Nothing destroys a nation’s economy and even the human spirit as lies and lying, deceit and deception. That’s what happens when a leader and the political class live in denial . Indeed, when a leader lacks coherent ideas to move his country forward, and blame others for his own failure to take responsibilities, the country suffers. That’s why there’s big trouble in the land.
In the conspiracy-soaked witch-hunt against the former Governor of the Central Bank of Nigeria Godwin Emefiele, no false theories, no layer of plots and vendetta have been left unturned to deal decisively with the man, his family and business associates. The script is like this: if one plot fails, try another. And they are coming in torrents. Despite multiple court orders debunking some of the allegations and granting him bail, government’s agencies are bent on pinning everything that has gone wrong with our economy on Emefiele. The spin isn’t quite sticking, but it’s growing in intensity every passing day. It’s like a do-or-die moment to nail Emefiele on the cross at all cost. On Feb 8, the Economic and Financial Crimes Commission(EFCC), declared Emefiele’s wife, Margaret, and three others, wanted for money laundering. They were alleged to have conspired with Emefiele to “convert huge sums of money belonging to the Federal Government”, and thereby committed felony”.
Also, a few days ago, Senate President GodswillAkpabio flew off the handle during a Thanksgiving event in Koroma, in Tai Local Government Area, Rivers state. He said, without evidence, that Emefiele’s financial crime “is so bad that government is unsure what to charge him with, whether for illegal possession of firearms, printing notes without income”… As a lawyer, SenAkpabio ought to know that the matter is still before a court of competent jurisdiction, and therefore subjudice. Which is why the Nigeria Bar Association(NBA) has cautioned him about his utterances. Can Akpabio really cast the first stone? Emefiele’s lawyer has gone a step further by suing Akpabio, claiming N25bn in damages for defamation. And, now, comparing the CBN under Emefiele and the current one, and the impact on the macroeconmic policies, the outcome is clear. Undoubtedly, the economy has paid a higher price and taken harder hits.
Nothing positive has been achieved n the macroeconmic/ monetary fronts. The naira free fall continues, with its consequential damages in all strata of the economy. But they are blaming it all on Emefiele. Is that why President Tinubu has not found his footing in nine months of his presidency? Emefiele may have made some mistakes, no doubt, but the current obsession to blame everything that has gone wrong with the economy has become this government’s occupational disease. The government’s blame-game is distracting it from fixing the economy, which is one of the reasons why Tinubu claimed he wanted to be President . Last week, the Senate said it would probe the N30trn Ways and Means(W&M) that the CBN under Emefiele granted the federal government during the administration of MuhammaduBuhari. Ways and Means, it must be explained, is a loan facility used by the Central Bank of any country to finance the government in times of temporary budget shortfalls subject to limits imposed by law. There’s no evidence that Emefiele contravened Section 38 of the CBN Act 2007 regarding W&M advances. Of course, the main target of the probe is Emefiele, not Buhari. This is another storm cloud that will likely evaporate under close scrutiny.
A trove of documents on the CBN website last year on the bank’s Development Finance activities under Emefiele detailed how he successfully managed interventions in different sectors of the economy. The lessons therefrom is for the discerning mind to judge. Clearly, CBN interventions in the real sector, for example, is to achieve a variety of economic targets, such as the need to address the issue of financial exclusion and create easy access to credit and give impetus for development of priority sectors and segments. Under Emefiele’s tenure, this was evident during the outbreak of COVID-19 in 2020, and the gap that existed then between demand for investment and the availability of domestic resources.
In total, the CBN under Emefiele supported 255 real sector projects, of which 174 were financed under the Real Sector Support Facility Cash Reserve Requirement, comprising 87 light manufacturing projects, and 40 agro-based projects. Anybody familiar with the functions of the apex bank, will understand the reason behind CBN’s programmes in the real sector, that is, to stimulate affordable and sustainable finance to priority sectors and segments of the economy, particularly in agriculture, manufacturing and Micro, Medium and Small Enterprises(MSMEs). Concessionary interest rate allows for transition in the economy from predominant primary production to manufacturing. This provides for low-cost and long-term funding for enterprises within these sectors that are involved in large-scale processing and secondary production activities. In the agric sector and the Anchor Borrowers’ Programme(ABP), data from the CBN show that a total of 4,590,039 smallholder farmers cultivated 6,135,150 hectares of 21 agricultural commodities and properly financed across the 36 states and the Federal Capital Territory (FCT) through 23 participating financial institutions. The commodities include: cassava, cocoa, cotton, fish, groundnut, maize, soya beans, sorghum, ginger, cowpea, castor seed, wheat, among others.
The CBN’s ABP under Emefiele reportedly contributed over 2.4 million metric tons of rice paddy annually, 1,126,736 mttonnes of maize production, as well as the cultivation of 1,413,930 metric tonnes of cassava and the domestic production of its derivatives – ethanol, starch and sorbitol. History advises to always look at the ‘message, and not the messenger’. That’s one of the lessons of CBN under Emefiele. As part of its strategic response to moderate rising food prices that is causing protests across the country, CBN during Emefiele’s tenure released 190,000 metric tons of maize directly to feed millers from the Strategic Maize Reserve. It contributed to the huge increase in the average food output growth rate to 26.44 percent, from the average 9.96 percent .
These are verifiable facts available at the CBN. Compare that to what government’s tepid response to the present hunger in the land. State governments say they are yet to receive the 102,000 metric tonnes of grain purportedly released from the Strategic Maize Reserve for distribution nor the purported N30bn that SenAkpabio claimed each government has received from the federal government to alleviate the present hardship. Beyond that, under the Commercial Agricultural Credit Scheme(CACS), the CBN during Emefiele’s time ably financed the expansion of agriculture operations with 67.6 percent of recorded financed projects. It also acquired more equipment, resulting in a progressive decline in Nigeria’s major food import bill from $3.23bn in 2014 to $0.59bn in 2018. This represents 82 percent decline in total import bill. Of particular interest are rice and wheat import bills which, according to data from the CBN, decreased by 98 , and 95 percent, respectively, between 2014 and 2018.
There were also reports of improvement in milling capacities of domestic rice companies which rose significantly due to the increase in many integrated rice mills to 72 between 2016 and second quarter of 2023. Milling capacities across the states reportedly increased from 329,000 Mt tonnes to 3 million mttonnes in the same period. If this government has not jettisoned everything that has the signature landmarks of Emefiele, perhaps the hike in cost of essential food items would not have arisen to this unbearable level, beyond the income of average Nigerians. As one cleric told Tinubu last week, ‘you said it’s your turn, now save Nigerians from hunger’. Even Emefiele’s harshest critics commended the role of the CBN under his leadership on youth empowerment.
Besides, Emefiele as CBN Governor introduced the ‘Creative Industry Financing Initiative’ with relaxed access requirement for entrepreneurs and investors in the fashion industry, information technology, movies and music production. A takeoff seed of N12.5bn was provided for the Nigerian Youth Industrial Fund(NYIF). Under this intervention, disbursements were made to over 7,000 beneficiaries, comprising 4, 411 individuals and 2,646 small business owners across the country, just as the bank’s Entrepreneurship Development Centre initiative trained no fewer than 18,000 people and created about 37,000 jobs in the process.
Perhaps Emefiele’s ‘sin’ could be that he did much more than was expected of him as CBN Governor. His impact was felt beyond the scope and limits that his critics imagined .
I think that was the point that the former Deputy Governor of the CBN Prof. Kingsley Moghalu made last year when President fired Emefiele. If that was the man’s Achilles’s heel, it was a character flaw with good intentions. But we cannot deny that the intervention of the apex bank under his leadership in the beleaguered power sector value chain was a remarkable accomplishment. A total of 1,403.3 MW of power supply was financed under the bank’s Energy Infrastructure schemes, designed to produce 944.3MW. It was also meant to moderate domestic production cost, improve industrial capacity utilisation, enhance competitiveness, and ultimately, lead to employment opportunities and poverty reduction. Today, poverty index in the country has exceeded 2022 NBS figure of 133 million. This is about 63 percent of the nation’s population. Altogether, Tinubu’s administration unhealthy fixation on Emefiele is not helpful to the economy. It is hampering growth and discouraging investors, especially when its own economic policies have gone awry. All the obsession with Emefiele may unwittingly make Emefiele’s tenure at CBN look like a ‘Gift of God’ in comparison to that of his successor, DrOlayemi Cardoso.