When Mr Godwin Emefiele assumed office as the Governor of the Central Bank of Nigeria, CBN, in June 2014, little did he know that he will enjoy another five-year tenure as the Apex Bank’s helmsman.
Following the expiration of his first tenure in 2019, having been appointed by the previous administration, President Muhammadu Buhari had renewed his tenure for another five years which is expected to terminate in June, 2024.
In fact, coming to office with almost three decades of banking experience, Emefiele unveiled a ten-point agenda, which spelt out his plan to make the CBN more people-focused.
There was no doubt about his desire to lead a Central Bank that spends its energies on building a sound financial system that can serve the growth and development needs of the Nigerian economy.
He had put in place policies and programmes 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 almost eight years has worked closely with the country’s fiscal authorities, to ensure economic stability in Nigeria with its intervention in critical sectors of the Nigerian economy.
Under Emefiele’s leadership, the CBN has come up with new strategies to navigate the Nigerian economy through economic 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.
In spite of seeming criticisms from some analysts who argue that the Bank has gone beyond its monetary policy mandate by delving into developmental issues, which 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.
Specifically, the Bank within the period, has, among other bold steps, inspired the rice revolution through its famed Anchor Borrowers’ Programme, 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.
The tenacious implementation of the Bank’s policy of restricting access to forex from the Nigerian forex market to some 43 items, has led to huge improvements in the domestic production of those items and a reduction in Nigeria’s import bill.
Pursuant to its developmental mandate, the CBN, either working alone or in collaboration with the Bankers’ Committee, has championed the establishment and implementation of various other initiatives all aimed at creating wealth and putting in place strong policies for creating jobs for the country’s growing youth population.
These include: The Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS); the Accelerated Agricultural Development Scheme (AADS); Youth Entrepreneurship Development Scheme (YEDP); The National Collateral Registry (NCR); and lately; The Creative Industry Financing Initiative (CIFI).
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.
Perhaps this might have been responsible for why President Muhammadu Buhari did not hesitate to recommend him for a second term in office, not minding that the CBN governor was appointed by a previous administration with different political leaning.
With the advent of the corona virus pandemic, COVID-19, came global health and economic challenges, which Nigeria was not immune to. However, like every other proactive Central Bank in the world, the CBN stood up to be counted. Some of the measures taken by the Emefiele-led team to mitigate the adverse impact of the pandemic on households and businesses included:
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 severally affected by the pandemic; Reduction of the interest rate on CBN intervention loans from nine to five per cent; Mobilisation of key stakeholders in the Nigerian economy through the CACOVID alliance, which led to the provision of over N27bn in relief materials to affected households, and the set-up of 39 isolation centers across the country;
strengthening of the loan to deposit ratio policy, which resulted in a significant rise in loans provided by financial institutions to banking customers. Loans given to the private sector, have risen by over 21 percent over the past year. Creation of N100 billion Target Credit Facility, TCF, for affected households and small and medium enterprises through the NIRSAL Microfinance Bank;
Creation of a N100 billion intervention fund in loans to pharmaceutical companies and healthcare practitioners intending to expand and strengthen the capacity of our healthcare institutions; Creation of a research fund, which is 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 recently 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.
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. Late last year, 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.
Even more inspiring is 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. The InfraCo Fund is to close national infrastructural gap and provide a firm basis for increasing national economic productivity and growth. Godwin Emefiele believes that the future remains very bright for the Nigerian economy.
He has consistently declared that the country possesses all that is required to cement her rightful place as the largest economy in Africa. He strongly believes that proactive steps on the part of stakeholders in the banking and financial system in supporting the growth of sectors such as Agriculture, ICT and Infrastructure, will strengthen Nigeria’s ability to deal with the challenges that have been brought on by COVID-19, and stimulate the growth of our economy.
The CBN Governor has also put in place strategies aimed at saving the Naira from further Devaluation as well as to cushion the impact of the drop in the supply of foreign exchange on the economy.
Some of these measures, according to Emefiele include, the introduction of demand management approaches to conserve the reserves and support the domestic production of certain goods; encouragement of manufacturers to consider local options in sourcing for raw materials by restricting access to FX on some items.
Additionally, the Governor said the CBN also established an Investors and Exporters Window (I&E), to allow for purchase and sale of Forex at prevailing market rate.
He said, “As a result of our demand management policy, the naira has remained largely stable at the I & E window, particularly since the discontinuation of FX allocation to Bureau De Change operators along with the convergence between the CBN and NAFEX rates.
“Banks are now able to meet the demands of their customers seeking forex for SMEs, school fees, medical and PTAs. Our current account deficit has narrowed significantly due to a surplus position in the goods account.
“The surplus position in the goods account is occasioned by a reduction in imports, increase in crude oil and gas export receipts, and improvement in remittances. Remittance inflows has been supported by our ‘Naira for Dollar’ scheme, and we have seen a surge in remittance inflows.”
The Governor said the initiative of the CBN tagged “PAVE’ an acronym of Produce, Add Value and Export, is expected to make Nigerians consume what they produce, add value to it, and even export the surplus.
“It is an initiative akin to South-East Asia’s much referenced export-led industrialization policy which changed the economic fortunes of countries such as South Korea, Taiwan, Malaysia and Singapore.
“PAVE is designed to be the key for fast-tracking a bucket of substitutes to Crude oil export. It encourages backward integration for the local production of select items,” he added.
The CBN Governor’s modest achievements could be traced to his humble beginnings when he said in recent interview that his parents recognized that the only way to brighten his chances for a better future was to provide him with a good education.
“I witnessed their toils as they struggled to pay my school fees, sometimes using proceeds from a small palm-oil plantation we cultivated in our hometown. I sympathised with their inability to sufficiently support me through those periods, despite all the luxuries that some of my peers had,” he said.
With their relentless reminders, Emefiele remained diligent and determined to accomplish his dream of becoming a leader in his chosen field of finance. With these same virtues, he joined the Nigerian-American Merchant Bank, an affiliate of First Bank of Boston, in 1987, and in 1990, joined Zenith Bank as a pioneer staff.
It is these same virtues that propelled him to become the Bank’s group managing director 20 years later, and then to be appointed the Governor of the Central Bank.
“If anyone had told my parents that the small palm-oil business they were running at our hometown would produce a Central Bank Governor, I am sure they would have laughed the person off,” he said.
“When I look back at some of my peers in school who focused on other things besides hard work and dedication to excellence, I see a different turn in their journeys through life. For this and many other reasons, I remain eternally grateful to God and to my parents for the principles they imparted in me,” Emefiele said.
