A look at Emefiele's 7 years as CBN Governor
The four key objectives of the Central Bank of Nigeria (CBN) are: to ensure monetary and price stability; issue legal tender currency; maintain external reserves to safeguard international value of the legal tender currency; promote a sound financial system in Nigeria; and act as banker as well as provide economic and financial advice to the Federal Government.
Therefore, the first measurement of whether the apex bank has delivered on its mandate is to look at how well these four parameters has fared.
Specifically, the CBN Act of 2007 charges the banking sector regulator with the overall control and administration of the monetary and financial sector policies of the Federal Government.
When Godwin Emefiele assumed office as the 10th indigenous Governor of the Central Bank of Nigeria in June 3, 2014, he made known his desire to lead a CBN that spends its energies on building resilient financial system that can serve the growth and development needs of the Nigeria economy.
Coming to the table with almost three decades of banking experience, Emefiele unveiled a 10-point agenda, which spelt out his plan to make the CBN more people-focused.
He said the Bank's policies and programmes would be geared towards supporting job creation and fostering inclusive growth, in addition to key macroeconomic concerns such as inflation and exchange rate stability.
An unrepentant optimist about the potential of Nigeria and its citizens, Emefiele, in the past seven years, worked closely with the country's fiscal authorities, to ensure economic stability in Nigeria with its intervention in critical sectors of the Nigerian economy.
To put this into context on Friday, June 4, 2021, Emefiele told Journalists at the final inspection tour of Dangote Fertilizer plant that concerning his seventh year as CBN governor, "I give thanks to God that we are here to serve the country.
"And I feel happy that one of those projects we have nurtured together with the bankers; the $17 billion project where the foreign and local banks contributed close to $10 billion while the Dangote industries contributed the rest as equity is becoming a reality.
"For me today, it is a dream came true because a few years back, some foreign investors doubted it when I told them about."
Some experts termed this people-oriented policies 'Economic Nationalism'. This has dominated every discourse in recent time where CBN's activities are discussed.
Incidentally, President Mohammadu Buhari announced in his inaugural speech that he will create 100 million jobs in the next 10 years. To some analysts, this is in line with CBN programmes.
Economists refer to Economic Nationalism as an economic policy perspective favouring government intervention in the market process to correct market failures and promote general welfare of the people.
Such interventions can be aimed at a variety of political or economic objectives, such as promoting economic growth, increasing employment, raising wages, raising or reducing prices, promoting income equality, managing the money supply and interest rates, increasing profits, among others.
This phrase did not start today or with Godwin Emefiele and former US President Donald Trump. Nigeria in 1972 under the former Head of State General Yakubu Gowon (Rtd), promulgated the Nigerian Enterprises Promotion Decree also known as indigenisation decree. The aim of the policy was to create opportunities for Nigerian indigenous businessmen; maximise local retention of profits and to raise intermediate capital and goods production.
Unfortunately, successive administrations lost the vision and Nigeria drifted away from economic realities to the point that almost every conceivable thing is imported as value added production became dead.
Emefiele assumed the mantle of leadership of the Central Bank of Nigeria in June 2014, and was almost immediately confronted by high inflation, falling oil revenue, value-eroding local currency as speculators and round-trippers held sway. Embarrassingly, the economy became 'dollarised.'
The CBN, under Emefiele's leadership, came up with new strategies to navigate the Nigerian economy through hurdles such as the challenge of foreign exchange inflow, the exchange rate, the economic recession, stagflation, financial inclusion and the gap in the value chains of majority of crops in Nigeria.
The astute banker saw the situation as peculiar, and initiated peculiar policies with a little touch of conventional economic theories.
The policies enunciated under Emefiele towards promoting price and monetary stability, exchange rate stability, financial system stability, as well as efforts to spur growth through development finance interventions is exactly what Economic Nationalism entails.
The organised labour is interested in the entire architecture, mainly because all these are geared towards promoting the welfare of Nigerians through job creation and increased local productivity.
According to the labour leaders, these policies are employment spinning, especially in the agriculture and textile industries. The bailout fund to states helped to offset salary backlogs. The items designated not eligible for foreign Exchange (forex) has curbed massive importation and allowed local manufacturing to grow via Import substitution.
In spite of scathing criticism from some analysts who argue that the Bank has gone beyond its monetary policy mandate by delving into developmental issues, which indeed the CBN Act (2007) as amended, recognises, Emefiele and his team at the CBN have remained committed to the patriotic goal of ensuring economic stability, through the Bank's numerous interventions.
In the eye of some analysts
To a public policy analyst, Mr Innocent Onyeabuchi, the Anchor Borrowers' Programme (ABP) of the apex bank revolutionised rice production, as it currently has over 925, 000 farmers enrolled, with over 10 million jobs created (direct and indirect).
The Investors and Exporters' Forex Window created by Emefiele attracted over $50 billion investments into the country within a spate of three years.
Onyeabuchi further said the central bank governor' has been able to rally commercial banks' chief executives to support his vision in growing the economy by setting aside five per cent of their annual profit to finance agriculture and the real sector to create jobs and wealth.
In what he termed a tripod structure erected by the CBN to enhance financial inclusion strategy, Onyeabuchi commended the bank in his recent article.
By this, the CBN is promoting the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL). The Bankers' Committee and NIPOST agreed to establish the national microfinance bank in 774 local government areas of the country to make cheap and sustainable credit at single digit interest rate available to the economic active but poor rural dwellers, particularly the farmers and petty businesses.
Some industry watchers have also concluded that restriction on the 43 items is Emefiele's own protectionist agenda designed to drastically reduce imports and encourage local production and create jobs, in line with Global economic protectionism like the BREXIT, and in particular, the unending trade war between United States of America and China.
According to Onyeabuchi, it has encouraged foreign direct investments (FDI) into Nigeria and importantly, Emefiele has coined his own brand of economic nationalism – Produce, Add Value and Export (PAVE).
In agreement with Onyeabuchi, General Secretary of the National Union of Textile Garment and Tailoring Workers of Nigeria (NUTGWTN), Comrade Issa Aremu at an interactive session in Lagos stated: "There is availability of local rice in Nigeria. The argument of CBN concerning the 43 items is tenable. Why should we make scarce foreign exchange available for people to import products that we can produce within the country? For us today, that has protected a lot of jobs.
"I think we should commend the CBN and encourage the apex bank to continue in its good job. We have to support CBN because if Nigeria can produce those 43 items locally, our factories will recover. Already, about 2.8million jobs have been created through the CBN (ABP) interventions. "You can imagine if we replicate that in other sectors like Textile and others. Emefiele has a way of interacting with stakeholders and taking ideas from such interactions into consideration, so he is a comrade," Aremu said.
He, however, advised that the country, through CBN should work towards a single-digit inflation rate, saying the CBN should be supported by all and sundry to revive the comatose manufacturing sector of Nigeria.
"I must say that the re-appointment of the CBN governor for second term is commendable. From the day he assumed office as the governor of CBN, his goal has been to have a monetary policy that will improve production and create jobs. For us, you can agree with me that if there are no companies, there will be no workers and if there are no workers there cannot be a union."
Specifically, the CBN, within the period, has, among other bold actions, inspired the rice revolution through its famed ABP, which has led to a near zero importation of rice into the country. The governor has also been at the fore of pushing for a diversification of the country's revenue base with emphasis on agriculture and small businesses. Emefiele equally pushed through measures geared at reducing the huge sums spent by the country on importing items such as fish and rice, which went as high as N1.3 trillion a year.
In the course of Emefiele's tenure as governor, the Bank has also introduced critical interventions such as the Nigeria Electricity Market Stabilisation Facility, NEMSF, the Nigerian Bulk Electricity Trading-Payment Assurance Facility, NBET-PAF, the Presidential Fertiliser Initiative, and the Shared Agent Network Expansion Facility, SANEF, among others, to directly support enterprises with huge potential for job creation, conservation of foreign exchange, import substitution as well as financial inclusion.
Equally desirous of promoting a strong and credible payment system as well as deepening financial inclusion, the CBN has approved the licensing of more Payment Service Banks (PSBs). Only recently, the CBN governor announced measures aimed at deepening the foreign exchange market, providing more liquidity, and creating more transparency in the administration of Diaspora remittances into Nigeria. With this move, all beneficiaries shall have unfettered access and utilisation to such foreign currency proceeds, either in forex cash or in their domiciliary account.
Also, Emefiele announced an extension of the moratorium on the apex bank's intervention programmes. He sued for interest rate reduction, creation of a N100 billion targeted credit facility; N100 billion health sector intervention facility and N1 trillion for the manufacturing sector. Some other measures included strengthening the central bank's Loan to Deposit Ratio (LDR) policy and regulatory forbearance.
President Muhammadu Buhari did not hesitate to recommend Godwin Emefiele for a second term in office, a rarity, considering that the CBN governor was appointed by a previous administration with different political leaning.
Other Emefiele-led intervention
As part of efforts to stimulate infrastructural development across the country, the CBN, working with the fiscal authorities also established a N15 trillion infrastructure development company (Infraco).
In addition, Emefiele was also instrumental to the formation of the private-sector-led Coalition Against COVID-19 (CACOVID), which was able to mobilise billions of naira and has immensely supported the country's COVID-19 fight by setting up healthcare facilities across the country as well as in distributing palliatives to states.
The health sector facility provided loans to pharmaceutical companies to expand/open their drug manufacturing plants in the country and also for hospitals and healthcare practitioners to expand/build health facilities.
In all, the CBN recently disclosed that 585,593 beneficiaries have received N462.722 billion as at May 28, 2021, from its various intervention schemes.
A breakdown of this showed that from January 2021 to date, N157.517 billion has been disbursed for 29 real sector projects under the Real Sector Support Facility- Differentiated Cash Reserve Requirement (RSSF-DCRR).
Also, from January 2021 to date, N26.008 billion has been disbursed for 10 projects under the COVID-19 manufacturing intervention schemes, while N255.992 billion have been disbursed for 78 projects under the CMIS from January 2020 till May 28, 2021. A total of 91 healthcare projects have also been funded to the tune of N97 billion under the Healthcare Sector Intervention Facility (HSIF) as at May 28, 2021; just as the sum of N111,706,807,536.11 have been disbursed by the CBN under Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) to 29,023 beneficiaries as at May 28, 2021. In the same vein, in line with its desire to stimulate output growth, the sum of N3, 198, 911, 438.20 have also been disbursed under the Creative Industry Financing Initiative (CIFI) to 341 beneficiaries as at May 28, 2021, while the sum of N253, 447,787,865 have been also been so far been disbursed under the targeted credit facility to 548, 345 beneficiaries as at May 28, 2021. The central bank recently announced that the Monetary Policy Committee has approved the raising of the targeted credit facility from the N300 billion it was increased to in March this year, to N400 billion.
Also in line with its drive for youth empowerment, the sum of N3, 004, 5555,000 have been disbursed under the Nigerian Youth Investment Fund (NYIF) to 7,057 beneficiaries as at May 28, 2021, while the sum of N85, 190, 160, 367.80 have been disbursed under Micro Small and Medium Enterprises Development Fund (MSMEDF) to 746 beneficiaries as at May 28, 2021 and the sum of N6 billion have been disbursed under SANEF to 14 beneficiaries as at May 28, 2021.
Furthermore, the sum of N173, 419,822.07 has been disbursed under the Youth Enterprise Development Fund (YEDF) to 67 beneficiaries as at May 28, 2021. YEDP disbursement by geo-political zone showed that for the South-west, 39 beneficiaries got N98, 570,852.07; North-central, 11 beneficiaries got N28, 805, 740; and for the South-east, eight beneficiaries received N22, 050,000. In addition, for the South-south, six beneficiaries received N16, 023,230; the North-west had two beneficiaries which received N4, 970,000 and the North-east had one beneficiary which got N3,000,000 A breakdown of the N100 billion healthcare facility also showed that applications have so far been received for 222 projects valued at N177.424 billion. Out of the 222 projects, 91 projects, that is 41 per cent of total HSIF valued at N97.444 billion have been approved and disbursed as at May 28, 2021 among others.
Need to do more
Although, a herd of experts and policy analysts have criticised the apex banking sector regulator on the grounds that it is entering areas that are meant for other government ministries and that the best way to solve a problem is not to throw money at it, others have equally agreed that the CBN has achieved a lot of positives that deserve commendation.
It is said to him whom much is given, much is expected, the Emefiele-led CBN would have to redouble its efforts in the area of price stability as well as do more to boost forex flows in order to guarantee exchange rate stability and boost the external reserves which presently are at $34 billion.
This is because with inflation at 18.2 per cent as of May 2021, it leads to income redistribution and brings about weak purchasing power.
Likewise, rising prices neutralise the money that one earns from investments. That is, inflation is effectively the reverse of compound interest.
That is why CBN needs to continue to take steps to see that inflation returns to single-digit. In addition, the monetary authorities must continue to work with relevant fiscal authorities to lower the rate of unemployment in the country presently put at 33.3 per cent.
Emefiele is a recipient of the prestigious Zik Prize for professional leadership as well as several other awards from leading Nigerian and international media organisations, for the role he has played in the financial stability and economic growth of the country. Indeed, optimists are expectant of more awards for the banker.
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