Emefiele: Portrait of a Misunderstood Reformer

Obinna Chima

 The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, can be described as the proverbial cat with nine lives considering the storms he has weathered in the past eight years. From the circumstances surrounding his first appointment by former President Goodluck Jonathan and his nomination for a second term by President Muhammadu, up till this moment, Emefiele remains a reformer who is mostly misunderstood.

Indeed, Emefiele who survived all the darts thrown at him when the present government took over in 2015, is faced with a similar situation today, as persons who might be eyeing his position in the incoming administration are doing everything possible to put him down, despite the reforms he had championed at the CBN. All they want is for members of the public to focus on the challenges associated with the recent naira redesign policy which some persons attempted to politicise, ignoring the tremendous impact of the the Anchor Borrowers’ Programme, how Emefiele led the private sector to support the government in the fight against COVID-19, the targeted credit facility, financial system stability, among other laudable initiatives of the central bank.

The CBN Act of 2007 charges the banking sector regulator with the overall control and administration of monetary policy. Although the four key objectives of the CBN includes to ensure monetary and price stability; issue legal tender currency in Nigeria; maintain external reserves to safeguard the international value of the legal tender currency; promote a sound financial system in Nigeria; and act as banker and provide economic and financial advice to the federal government, the central bank under Emefiele has continued to perform major developmental functions, focused on all the key sectors of the economy.

It is worthy to note that when Emefiele assumed office at the CBN in 2014, he carried with him the burden of high expectation as the institution then was going through a turbulent time, considering the manner in which his predecessor left office. Then, there was significant decline in the price of crude oil which led to acute capital flow reversals and forex shortage. The impact was quite severe, forcing the economy to go into a recession. The development then necessitated bold reforms as well as forced the central bank to throw in different unorthodox policies from the CBN to lift the economy out of recession. About eight months after he was reappointed for a second term, the economy suffered similar fate. This time around, the disruption was occasioned by the COVID-19 which came into the country in 2020. The pandemic once more exposed the economy’s weak underbelly, necessitating response from the government.

The Emefiele-led central bank once more acted swiftly, almost when the first case broke out in the country by unveiling a raft of measures to moderate the impact of the virus on households, businesses as well as the economy.

Measures such as an extension of the moratorium on the apex bank’s interventions programmes, interest rate reduction, creation of a N100 billion targeted credit facility; N100 billion health sector intervention facility and N1 trillion for the manufacturing sector, strengthening the central bank’s Loan to Deposit Ratio (LDR) policy and regulatory forbearance, were all introduced to save the economy.

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.

Also, as part of efforts to stimulate infrastructural development across the country, the Emefiele-led CBN, working with the fiscal authorities also established a N15 trillion infrastructure development company (Infraco).

Today, the central bank’s interventions aimed at stimulating production and productivity across the real sector showed that between January and February 2023, N12.65 billion was disbursed to three agricultural projects under the Anchor Borrowers’ Programme, bringing the cumulative disbursement under the Programme to N1.09 trillion to over 4.6 million smallholder farmers cultivating or rearing 21 agricultural commodities on an approved 6.02 million hectares of farmland across the country.

Interestingly, total repayments under the Anchor Borrower Programme is presently at 52.39 per cent of total exposure and the central bank has continued to reiterate its commitment to its developmental mandate of stimulating access to finance for the real sector.

Some of the commodities that have received support under the Anchor Borrowers’ Programme include rice, wheat, cowpea, millet, maize, cotton, fish, soya bean, poultry, cassava, groundnut, ginger, sorghum, oil palm, cocoa, sesame, tomato, castor seed, yellow pepper, onions, and cattle/dairy.

The programme which was introduced by the Emefiele-led CBN has contributed significantly to increased national output of focal commodities, with maize and rice peaking at 12.2 million metric tonnes and 9.0 million metric tonnes in 2021 and 2022, respectively, as the Acting Director, Corporate Communications, CBN, Dr. Isa Abdulmumin made us to know recently. According to the CBN spokesman, the programme had also helped to improve the national average yield per hectare of these commodities, with productivity per hectare almost doubling within the eight years of the Programme’s implementation.

Additionally, the central bank has also released the sum of N23.70 billion under the N1 trillion Real Sector Facility to eight new real sector projects in agriculture, manufacturing, and services. Cumulative disbursements under the Real Sector Facility currently stands at N2.43 trillion, disbursed to 462 projects across the country, comprising 257 manufacturing, 95 agriculture, 97 services and 13 mining sector projects.

Under the 100 for 100 Policy on Production and Productivity (PPP), designed to fast track productive activities in priority sectors, the central bank has also supported a lot of local manufacturers. It has released N3.01 billion under the Nigerian Electricity Market Stabilisation Facility (NEMSF-2) for capital and operational expenditure of distribution companies (Discos) aimed at improving their liquidity status and aid their recovery of legacy debt, with the cumulative disbursement under the facility at N254.39 billion.

The central bank has also been promoting financial inclusion through its cashless policy.

The recent drive for cashless by the CBN which was followed by the redesigning of the naira was faced with some opposition because it was perceived to be targeted at some politicians. This, Emefiele had explained was not true, maintaining that the central bank was purely focused on its mandate.

Undoubtedly, the benefits of going cash-less are numerous and remain the best option for any country as has been seen globally. For instance, if Nigeria must address the current gale of insecurity, corruption and economic sabotage among other actions of some privileged elites who continued to take advantage of a dysfunctional system to short-changed the country, it must embrace evolve to a cashless society.

It is also necessary in the fight against inflation in Nigeria, which has stubbornly remained at double-digits. Also, the cash-less policy has led to a reduction in banditry and kidnappings which were rampant in the recent past.

 With the cashless policy, people can easily pay their bills online, shop and schedule transactions and manage all the finances using their laptops or smartphones.

Going cashless not only eases one’s life but also helps authenticate and formalise the transactions that are done. This helps to curb corruption and the flow of black money which results in an increase of economic growth. Also, the cost of printing and transportation of notes would be reduced.

But just like the Minister of Labour and Employment, Chris Ngige aptly noted, implementation of such a policy comes with challenges and resistance.

“The cash crunch is part of the cashless policy. It was the implementation that ran into a hiccup, it was not smooth; so the CBN is trying to smoothen it out. But that doesn’t take away the fact that you are trying to do a cashless policy in such a way that the volume of cash in circulation would not be what it used to be.

“They said it was about N3 trillion and they want to cut it down. Cutting it down is part of that cashless policy. Some of us that travel abroad, when you bring out cash, people would be staring at you as if you are coming from Mars, because they are not used to people bringing out cash.

“If you are bringing out huge cash abroad, you are either a drug peddler or you are not doing clean business. In fact, they regard anybody bringing out cash as somebody doing money laundering. Since the cashless policy commenced, there have been temporary relieve we have gotten from banditry, from kidnapping and people asking for N50 million cash to release kidnapped victims.

“All those have abated. So, it is not a bad policy. It is the implementation; it should be done gradually. There is no way we would go back to the old way, where people carry N100 million cash and bring it into the market. Cash should be for low volume and low value transactions,” the minister said in a national television.”

He noted that vote-buying reduced drastically during the 2023 general election because there wasn’t cash to induce voters.

Therefore, it is expected that as the CBN drives the cash-less revolution, Nigerians must give it the required support for the overall benefits of the country.