While Nigerians and the world are waiting with expectation for a new economic roadmap from President Buhari, it is pertinent to remind the President of his ‘Next Level’ promise to improve the living standard of Nigerians and move the economy out of tottering recovery. The delay in constituting a cabinet in his first term was alleged to have partly contributed to the economic recession. The unlikely consequences of the 2015 general elections accounted for capital flight, as investors moved their investments from Nigeria in anticipation of likely electoral crisis.
While the delay lasted the Emefiele-led CBN took charge but the volatility of the world price of crude oil, Nigeria’s major income earner nose-dived and the economy got thoroughly bashed. Economy predators did not also help, they collaborated to wreck the economy and Godwin Emefiele became the scape-goat. Global economic protectionism, the BREXIT, and in particular, the unending trade war between United States of America and China made the CBN came up with the suspension of 41 items to resolve the challenges facing the economy.
Godwin Emefiele gauging the temperature and architecture of the trade war between two economic giants and their allies’ and likely consequences it would have on global economic growth and stability came up with some home-grown policies to secure and protect Nigeria’s fragile economy.
Economic nationalism did not start today or with Donald Trump. Nigeria in 1972 under General Yakubu Gowon (rtd), the former Head of State promulgated the Nigerian Enterprises Promotion Decree a.k.a Indigenization 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. It must be noted that, the policy was predicated on a very strong conviction of political and economic nationalisation. The policy was later reviewed by the Murtala/Obasanjo regime in 1977. It was a radical policy politically initiated to set the stage for greater participation of Nigerians in the ownership, management and control of the productive enterprises in Nigeria. It was envisioned to enhance the industrial development of the country by encouraging foreign investment in intermediate and capital goods production. Unfortunately, we missed the dream and successive administrations lost the vision and Nigeria drifted away from economic realities.
The appointment of Emefiele in June 2014 revealed the true health situation of the economy with inflation almost hitting the roof and the only revenue earning product for the country, crude oil, had its international price plummeted uncontrollably. The local currency, the Naira, was worst hit by the enterprises of currency speculators and round-tripping held sway, and embarrassingly, the economy became dollarized. It thus became obvious that if something drastic and decisive was not done Nigeria might be put up for economic colonisation.
It took the initiative of Godwin Emefiele after devaluing the currency twice, to embrace import substitution policy targeted at the goods draining the reserves and responsible for job loss, the 43 items that can be locally produced. Nigerians knew the consequence of that action. Economic predators went up in arms, but Godwin Emefiele stood his ground. He only sought the support of well-meaning Nigerians. That was Emefiele’s protectionist agenda designed to drastically reduce imports and encourage local production and create jobs. At the heart of the policy was the desire to spur domestic economy which had been swallowed with warped taste for foreign goods and enhance production of suspended items he has eventually increased to 43, and promised to suspend more if the need arises.
This policy also seeks to discourage dumping of sub-standard goods which were flooding the Nigerian markets. To ensure that a vacuum was not created, the CBN came up with the Anchor Borrowers’ Programme, Investors and Exporters Window, Youth Entrepreneur Development Programme (YEPD), Real Sector Support Fund Facility (RSSP) and Accelerated Agriculture Development Scheme (AADS) (this not to mention the N220bn MSMEDF, ACGS, SMECGS etc.) and importantly, his own brand of economic nationalism – Produce, Add Value and Export (PAVE). However, all these efforts, to Emefiele’s detractors, are ‘unforgivable sins’.
The voodoo economists have come again as they swarm on Godwin Emefiele in the days of economic adversity. One of them wrote in a national business daily newspaper of Monday 10th June, 2019, ‘’Emefiele: A central bank governor in politician’s image”. Eventually, this is a piece put together and apparently doing the job of paymasters. For the writer to have said that President Buhari reappointed Emefiele because he pursued, almost without reservation, the President’s statist and illiberal economic agenda, including propping up favoured sectors, notably agriculture and manufacturing, with billions of Naira; protecting these sectors from international competition through high tariffs, exchange control and outright import bans; feeding Buhari’s deficit-financing by extending massive overdrafts to his government, and of course, like Buhari, not wanting to kill the Naira, so, instead of liberalising the foreign exchange market and allow the Naira to adjust to its true market-determined level, he is operating different foreign exchange windows and foster different exchange rates, which distort the economy and discourage investors”. I wondered if this writer, a Nigerian, who claimed to be a visiting fellow at the London Business School of Economics is not on Tramadol or Codeine to be so dazed and blind to Godwill Emefiele’s commendable strides at the CBN and how he has helped put the economy back on its feet. He made some mundane comments that betrayed the disappointment of his payers who were apparently unhappy and disappointed with Emefiele’s reappointment. I think Emefiele himself knew that his reappointment would re-energise the economic predators, reason he said on his reappointment that ‘the road ahead would be rough’. These disillusioned adversaries always come in different shapes, colour and sizes. As they failed to effect change at the headship of the Bank and have the Naira floated, they have resulted to name calling, blackmail and mudslinging.
Maybe the writer, because of his deluded grandstanding forgot that in 2008/09 the world economic crisis changed the way countries relate with each other and since then countries have embraced trade protectionism as tool to resolve negative perceptions and shocks in their respective countries, and Nigeria is not an exception. If no one had the guts to do it in the past, Emefiele should be commended on his policies which are evident and has helped gave fresh breath to some hitherto comatose industries, particularly agriculture and manufacturing, which were the mainstay of the Nigeria economy in the more buoyant years of the 1950s/70s. With Cocoa, South West was built, Palm Oil and rubber built Mid-West region, Coal built South East and the Groundnut pyramids built the Northern region.
The global uncertainties arising particularly from US hiking of interest rates and the trade war with China has impacted negatively not only on the Nigerian economy but most developing economies. And if not for the steeled patriotism of Emefiele who was able to weather the storm, despite these challenges to grow the reserves from $23bn to $45bn with a spate of 4 years is no mean achievement. Anchors Borrowers’ Programme currently has over 925, 000 farmers enrolled, with over 10millions jobs created (direct and indirect). The effort revolutionized rice production.
The Investors and Exporters’ Window created by Emefiele which detractors have labelled ‘special window’ for the favoured has attracted over $50bn investments into the country within a spate of three years and inflation rate brought down from 19 per cent to about 11.8 as at May 2019.
The ‘politician central bank governor’ has been able to rally commercial banks chief executives to support his vision in growing the economy by setting aside 5% of their annual profit to finance agriculture and the real sector to created jobs and wealth. He also erected a tripod structure to enhance financial inclusion strategy of the CBN, the NIRSAL, Bankers’ Committee and NIPOST 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.
The on-going trade imbroglio between the US and China is assuming a worrisome posture and only God knows when it would end. Thus, most of Emefiele’s policies are geared to step up production of goods and services with export potential to further appropriate the gains of the Currency Bilateral Agreement with China.
The ‘politician CBN Governor’ has succeeded in achieving unbroken 3-year stability in the foreign exchange markets and has encouraged foreign direct investments (FDI) into Nigeria.
Cynics have started; they are irritating distractions whose trademark is ‘pulling him down at all cost’ syndrome. They always get paid to do these dirty jobs for a mesh of porridge, but unfortunately, they have gotten themselves a match in Godwin Emefiele.
*Onyeabuchi writes from Abraka, Delta State.
