Boniface Chizea, a Management Consultant, writes that the tenure of the Governor of the Central Bank, Godwin Emefiele has so far been impactful and apolitical, thus achieving stability of exchange rate and appreciation of the nation’s foreign reserves …
Wednesday September 10, 20014 is a date that is important in the life of the Governor of the Central Bank and I suspect the life of Nigerians as Godwin Emefiele marks his first hundred days in office. It is a period of time in leadership and management during which as the morning shows the day, it is possible to begin to profile anybody’s tenure. And I must say without any fear of contradiction that the journey has been good so far. Godwin Emefiele has so far been able to make the Central Bank apolitical. The Governor as should be expected and should be preferred has not made one political related statement to the best of my knowledge. In fact as we predicted he has not granted any interview the media and we predicted that much.
The Governor has already established a rapport with the President which is as should be expected as he must be seen to be complementing the efforts of the fiscal authorities particularly this President as he continues to pursue doggedly his revolutionary and far reaching transformation agenda. It is on record that in this respect that the Central Bank under Emefiele’s watch recently launched the Micro, Medium and Small Scale Enterprises (MMSE) 220 billion Naira fund to boost the contribution of this important and dominant sector of the economy to the economy and to optimize their job creation potentials. The President in support of this initiative recently inaugurated a council to guide efforts in this regard under the chairmanship of no less a personality than the Vice President signaling the importance which the President rightly and perceptively attaches to this sector of the economy. As the President observed on the occasion of the inauguration; a survey conducted by the Federal Office of Statistics in 2010 indicated that there are 17.2 million MMSE enterprises in the country which account for the employment of 32 million Nigerians. And that if each one of these businesses employ just one additional person we would be adding 17 million jobs making considerable dent on the problem of unemployment in the country which has been seen by most informed compatriots as the cause of most of the anti- social behaviors prevalent in the economy not forgetting even the ravaging insurrection in our economy.
The Governor has also gotten involved in attempt to provide funding for the gas sector. As it is common knowledge what has affected the realization of the potential inherent in the power sector which the President has unleashed during the successful privatization of the power sector is the inadequate supply of gas to drive the turbines. It would appear that the details in this respect are still in the works to be activated in the shortest possible time. There is therefore no doubt that the President must be saying to himself that he made a good decision in making this appointment. Congratulations Mr. President for this appointment and for many other well informed and perceptive appointments you have so far made.
It is also all quiet with the legislators. All that talk about revisiting the Organizational structure of the Central Bank with the view to make a provision for a Chairman of the Board of the Central Bank outside the Governor contrary to received wisdom and best practice in this regard are things of the past. Even when the Governor decided to sanitize the operations of Bureau De Change in the country to block the leakage of foreign exchange which they perpetrate as they operate as usual the operators rushed to the legislators to come to their assistance; the Governor engaged with the legislators and left them with promises and assurances that they would partner with the Governor to ensure that he is not impeded as he discharges the responsibility of his office. Even the operators have been pacified as many of their members; over two thousand surprisingly met the new capital requirements and even those that were unable to do so were still left to continue to operate except that access to official foreign exchange was now denied. It must be borne in mind that operating without foreign exchange allocation from official channel is the common practice in most other jurisdictions. By adopting this approach the fear that the policy will lead to layoffs worsening the unemployment situation was put to rest and all concerned are at peace. Even as the Governor did not have any choice but to change the Executive Management at MINT due to lack of harmony and consequent lack of productivity he appointed a Managing Director from the middle belt and an Executive Director from the North. There was no body from Delta Ibo in that appointment which is bucking the trend on such matters in our collective experience.
The Bankers’ Committee recently under his watch returned notionally some charges on remote on use ATM. On the fourth withdrawal using third party ATM a charge of N 65 Naira applies. There were so many outcries from compatriots who would want to eat their cake and have it. Who would complain about inadequate availability of these machines and the quality of service particularly network related shortcomings but would not want to make any contribution towards the desired solution? Some of us are of the view that the Governor and the Bankers’ Committee were pulling their punches in this respect because the charge should have been returned on all such withdrawals as compatriots have a choice.
The Governor had a soft landing on his debut Monetary Policy Committee meeting. The full complement of the membership of this body was present and there was unanimity of views as the decisions were taken and reported. There were those who expected that the Governor could have seized the opportunity of this meeting to twinkle the interest rate albeit notionally to keep fidelity with his promise that he would work to reduce the level of prevalent interest rates in the economy. But we must empathize by recalling that because the Governor served notice during his confirmation hearing that he would work to reduce the rate of return on fixed income securities that there was immediate run with foreign investors offloading their investments almost causing instability. We recall the blazing headlines when this development was reported in the popular media:’ when rhetoric confronts reality.’ It would therefore behoove the Governor to exercise some due care, bid his time and approach such matters sequentially and in a gradualist well considered manner. The Governor has since responded by informing all concerned that the issue of the reduction of interest rate is a long term project asking all concerned to exercise some patience.
We would want to bring to the attention of the Governor some of the promises he made as part of the agenda he unfolded for the Central Bank. He promised that the data on unemployment will be part of the complement data that the MPC would consider in preparation for its deliberations. We remember raising issues regarding the fact of the difficulty in having such data updated as required. Borrowers not requiring not more than N 50,000 only would be able to do so without collateral even if this will be done under some cooperative arrangement. The black list of serial bad debtors is also still being awaited and no doubt would happen in due course as that would have the effect of returning sanity amongst such borrowers in the greater interest of the health of the banking system. We also recall that in the memo we did to welcome the Governor that we did draw attention to the work on the Financial sector Strategy 2020 on which we were engaged as consultant on Quality Assurance reminding the Governor to revisit this study to further the desire to deliberately craft the preferred future structure of the financial architecture in Nigeria leading to making Nigeria the financial hub of Sub Saharan Africa. The country has enjoyed relative stability of the exchange rates and as a matter of fact for a short period the Naira even appreciated against the dollar and the reserves which had dwindled have witness recently some accretion. We give full marks to this Governor for his efforts so far while we continue to join our prayers for God’s guidance as he continues to grapple with the enormous challenges of the Office.