Entertainment & SocietyEmefiele @ 60: The Passionate Central Banker In Turbulent Times

Emefiele @ 60: The Passionate Central Banker In Turbulent Times

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August 03, (THEWILL) – Mr Godwin Ifeanyi Emefiele, Nigeria’s 10th indigenous Central Bank Governor, turns 60 on Wednesday August 4, 2021. He will walk into his expansive office in Abuja, and attend to other matters on this day in the mood of a fulfilled man. This is amid the raging storm in the nation’s foreign exchange market which occurred only eight days earlier when he announced the ban on the sale of forex and issuance of new licences to the Bureau De Change (BDC) operators.

Since then, Emefiele has been lambasted by critics for what they called deliberate moves to worsen an already bad situation. But this passionate and patriotic central banker, as he has been described in reputable cycles, means well for the nation and the economy.

He deserves more than 60 accolades on this special day of his as the bell tolls for his landmark birthday. His coming on board as CBN Governor first in June 2014, and reappointed in June 2019, brought hope and calm to an economy that witnessed two recessions under his watch.

Glo

Upon his appointment in June 2014, Emefiele unveiled his ten-point agenda, which spelt out, unambiguously, his plan to make the CBN more people-focused, in a well-attended world Press Conference in Abuja.

At that event, Emefele left no one in doubt as to the priority of his policy thrust – development finance to create jobs and attain financial stability. He said he was committed to create “a central bank that is professional, a central bank that is apolitical, and people-focused. A central bank that spends its energies on building a resilient financial system that can serve the growth and development needs of our beloved country.”

He did not fail to deliver. Emefiele doubled his resolve to prepare the economy for an eventual shock. Eventually, this occurred through the 2016 recession and the 2020 COVID-19 which also brought its own recession. At both times, Emefiele showed he was prepared for the challenge that his calling demands. Thankfully, the solid foundation on ground proved he was ready for the job he knows how best to do.

Overlooking the scathing criticism from some analysts who argued that the CBN governor had acquired renewed energy to push the Bank beyond its monetary policy mandate by delving into issues beyond what the CBN Act (2007) provided, Emefiele and his team remained committed to the patriotic goal of ensuring economic stability, through the Bank’s several intervention programmes.

Among the interventions was the famed Anchor Borrowers’ Programme (ABP) which brought unusual reform to Nigeria’s agricultural sector. The result was a boost in productivity beyond expectation. The ABP saw the farmers, the millers, the off-takers and others actively involved in the value chain.

The Bank under Emefiele introduced 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 the others. The aim was to offer the needed support to enterprises with huge potential for job creation, conservation of foreign exchange, backward integration as well as financial inclusion.

The CBN in collaboration with the Bankers’ Committee, has created several other intervention initiatives to boost the GDP through massive job and value chain enhancement. These include: The Agri-Business/Small and Medium Enterprises Investment; Youth Entrepreneurship Development Scheme (YEDP); The Creative Industry Financing Initiative (CIFI); The Accelerated Agricultural Development Scheme (AADS); The National Collateral Registry (NCR), among the others.

Like the stitch that saved nine, the CBN’s robust interventions saved Nigeria’s economy from crumbling under the ravaging COVID-19 pandemic which brought global health and economic challenges. The apex bank stood up to be counted. One of the striking measures taken by the Emefiele-led team to mitigate the adverse impact of the pandemic on households and businesses was the Mobilisation of key stakeholders in the Nigerian economy through the CACOVID alliance. This led to the provision of over N27 billion in relief materials to affected households, and the set-up of 39 isolation centers across the country.

Other initiatives include: A one-year extension of the moratorium on principal repayments for CBN intervention facilities; Regulatory forbearance granted to banks to restructure loans given to sectors that were severely affected by the pandemic; Reduction of the interest rate on CBN intervention loans from nine to five per cent.

The CBN also initiated the strengthening of the loan-to-deposit ratio (LDR) policy, which resulted in a significant rise in loans provided by financial institutions to banking customers. This was strictly enforced and erring banks sanctioned. As a result, loans given to the private sector have risen by over 21 percent over the past year. There was also the creation of a N100 billion Target Credit Facility (TCF) for affected households and small and medium enterprises through the NIRSAL Microfinance Bank.

Emefiele’s leadership created the N100 billion intervention fund in loans to pharmaceutical companies and healthcare practitioners intending to expand and strengthen the capacity of our healthcare institutions; it also created a research fund designed to support the development of vaccines in Nigeria; and a N1 trillion facility in loans to boost local manufacturing and production across critical sectors.

Also, in line with its desire to stimulate the economy to boost employment across different sectors, the CBN has introduced initiatives such as the Intervention Facility for the National Gas Expansion Programme; the Solar Connection Intervention Facility; and the CBN Facility Homes Financing Initiative. The N220 billion MSME Fund received renewed drive.

The CBN has approved the licensing of more Payment Service Banks (PSBs) to promote a strong and credible payment system as well as deepening financial inclusion. Recently, Emefiele 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 have unfettered access and utilisation to such foreign currency proceeds, either in forex cash or in their domiciliary account.

The CBN’s role in the establishment of the N15 trillion Infrastructure Company, (InfraCo) Fund, an independently managed fund set to drive a self-sufficient economy and to revolutionise infrastructural development in Nigeria, has been applauded by the public. The InfraCo Fund is to close national infrastructural gaps and provide a firm basis for increasing national economic development.

The ban on importation of 41 items through the official forex window generated huge controversy and was criticized by a large section of the business community. But the motive was for the interest of the economy. Indeed, Emefiele challenged all those who claimed they had the capacity to produce the affected items to show up for the CBN’s support in the areas of machinery and working capital. This was part of the proactive measures of the CBN in safeguarding the international value of the Naira, frustrating the activities of speculators and dealing with noticeable failures in the market mechanism which could lead to further depreciation of the Naira.

Of concern to the Bank, and indeed the economy, was the fact that the currency speculators held sway across various social strata and held on to huge dollar deposits, in anticipation that the Naira would further decline in the face of scarcity of the ‘greenback’. These economic saboteurs built an unholy fraternity with the BDC operators who Emefiele recently described as agents of graft: “They have turned themselves away from their objectives. They are now agents that facilitate graft and corruption in the country. We cannot continue with the bad practices that are happening at the BDC market.”

While unfolding his second term plans in June 2019, Emefiele reiterated his commitment to drive financial inclusion with the new vigour that would facilitate access to financial services to 95 per cent eligible Nigerians by 2024.

“Put succinctly, our priorities at the CBN over the next five years are the following; First, preserve domestic macroeconomic and financial stability; Second, foster the development of a robust payments system infrastructure that will increase access to finance for all Nigerians thereby raising the financial inclusion rate in the country; Third, continue to work with the Deposit Money Banks to improve access to credit for not only small holder farmers and MSMEs but also consumer credit and mortgage facilities for bank customers. Our intervention support shall also be extended to our youth population who possess entrepreneurship skills in the creative industry.”

Reports have shown that alternative payment systems thrived beyond expectation even during COVID-19 and the 15-months land border closure.

It will be recalled that Emefiele had restated his resolve to fight inflation to a single-digit point through time-tested policies that would not create hiccups in the economy. Although this appeared a tall order, the downward trend in inflation rate in the three past consecutive months up to June 2021, points to the fact that the Bank is toeing the right path. This is in line with Emefiele’s declaration in June 2019:

“Our ultimate objective is to anchor the public’s inflation expectation at single digits in the medium to long run. We believe a low and stable inflationary environment is essential to the growth of our economy because it will help support long term planning by individuals and businesses,” he said.

Emefiele might have made history as the only CBN Governor to be reappointed for a second term since the return to democratic rule in 1999 and one that experienced two recessions, his seven years records at CBN, a 63-year-old institution in Nigeria’s 61 years of Independence, offer good reasons for Emefiele to be celebrated as the true people-focused CBN governor. Indeed, he piloted the affairs of the Bank in the most turbulent weather, yet achieved the ultimate altitude of greatest stability. Emefiele deserves more than 60 cheers.

About the Author

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Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

Sam Diala, THEWILLhttps://thewillnews.com
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

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