ANALYSIS: Will Buhari give Emefiele a second term as CBN governor?

ANALYSIS: Will Buhari give Emefiele a second term as CBN governor?
March 06
12:18 2019

Joseph Sanusi. Charles Soludo. Muhammad Sanusi II. Since the return of democracy in 1999, no governor of the Central Bank of Nigeria (CBN) has served two terms. Is Godwin Emefiele about to be the breaker of the CBN tenure jinx?

Appointed by former president Goodluck Jonathan on June 3, 2014, Emefiele will end his tenure as CBN governor in less than three months from Wednesday.

TheCable understands that the president has been duly informed, but as a former general who has learnt one or two things from Sun Tzu, Buhari is best at keeping his cards to his chest and watching speculations run riot in Africa’s biggest economy. After all, Tzu said: “Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.”

Rumour mills have been very busy second-guessing the next line of action of President Muhammadu Buhari. They have even come up with a list of possible replacements for Emefiele, suggesting that he has received a letter asking him to go “in two weeks”.

While Buhari may want to fall like a thunderbolt and shock Nigerians with his move on the leadership of the CBN, TheCable highlights what the past four to five years mean for Emefiele’s chances as second term CBN governor.


Jonathan handed over to Buhari, who went to retain many key appointees

Only a few top shots survived the administrative purge that came with change in government from the Peoples Democratic Party (PDP’s) Goodluck Jonathan government to the All Progressives Congress (APC) leadership of Muhammadu Buhari.

Of those few, Solomon Arase, former inspector general of police; Yemi Kale, statistician general of the federation; Joe Abah, director general, Bureau for Public Sector Reform; and Emefiele, easily come to mind.

These few have shown that Buhari is not entirely against the appointees of a previous government as seen in Nigerian politics before 2015. As long as value is presented, Buhari does not mind keeping a Jonathan appointee in office.

QUICK FACT: Buhari is the first Nigerian president since 1999 who did not reshuffle or fire any member of cabinet for four years.


Yemi Kale is serving a second term

If we have learnt anything from Buhari’s many interviews and acts of office, it is clear that the president prefers steady trusted hands than new untested ones — no matter the level of experience they bring to the table.

Speaking in an interview with THISDAY, Buhari gave us an insight into how his experience has shaped his decision-making process. He explained why he has not changed any of the service chiefs despite their “disappointing” performance.

“I have been a governor, I have been a minister, I have been a head of state, I came back, I tried to come back to this office three times but lucky on the fourth time,” Buhari had said.

“I am measuring the options critically, when you have a case of emergency, if you don’t wait for an appropriate time to do it, then you create competition within the service, there are so many ambitious people waiting, only one man can be chief of army staff in the army, only one man can be the inspector-general of police”.

While one may say this is a security matter, and service chiefs appointments are not measured in terms, we have found that Buhari prefers continuity to change, when it comes to matters of appointment.

Elias Mbam: As the chairman of the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC), Mbam served out his term in November 2015, less than a month after Buhari unveiled his ministers. Rather than change Mbam, Buhari preferred him as a steady hand at the helm of the revenue mobilisation team.

Yemi Kale: In 2011, Goodluck Jonathan appointed Kale as statistician-general of the federation, taking over from Rasaq Sanusi. Kale served out his five-year term in 2016, and was expected to be replaced by Buhari. But the president renewed his appointment after a period of silence and speculation.

Uchechi Orji: Orji was appointed by Jonathan in 2012 as the Managing Director of the Nigeria Sovereign Investment Authority (NSIA). Also after a five-year tenure, Buhari was expected to replace him in 2017, but the president renew his appointment for another five-year term.

 Segun Awolowo: This was a special case. Segun Awolowo’s tenure as executive director of the Nigerian Export Promotion Council (NEPC) came to an end in 2017. He continued in office, following Buhari’s silence.

Boss Mustapha, the secretary of the government of the federation (SGF), then issued a memo dated December 4, 2017, stating that all head of MDAs, whose tenure had expired should hand over to the most senior director. Awolowo eventually handed over before he was re-appointed by President Buhari.

Buhari has replaced some other heads of MDAs at the expiration of their tenure, but he has also given renewed terms to many.


Buhari and Emefiele seem to get along just fine

Exchange rate regime: Following a fall in crude oil prices from 2015 through to 2017, Nigeria experienced a currency crisis which forced the CBN to an attempt devaluation of the naira. But the president opposed the idea, saying he will “not kill the naira”. CBN under Emefiele managed to hold the currency for 16 months while depleting reserves as oil prices hit a record low of $27 per barrel.

Eventually, the CBN devalued the local currency to mirror the realities in the local economy. The naira fell from 197 per dollar to 283 per dollar on the first day of what was called a “managed” float of the naira. The local currency went as high as N520 per dollar. It was a tough time for Emefiele’s CBN.

The former Zenith Bank CEO introduced policy suites to mitigate the problem in the FX market, restoring the naira from 520 per dollar to 360 on the regular. And for the first time in Nigeria’s recent electoral history, the naira has been stable before, during and after a presidential election.

While we have the official CBN N305/$1 rate and N360/$1 rate — the CBN claims Nigeria does not operate multiple exchange rate regime. In all these, the president and the CBN governor align on the management of the exchange rate system. A plus for Emefiele.

Buoyant Reserves: When Buhari took office, Nigeria’s foreign currency reserve was at $29 billion. Following the crude oil crash, the reserves went as low as $23 billion territory in October 2016.

Less than two years after, with the aid of crude oil and shrewd management, the Emefiele-led CBN had doubled the foreign reserves, bringing it to $47.6 billion in May 2018 — the highest since the oil crash.

Rice farming policy: Did you get the news? Nigeria is now the highest producer of rice in Africa. This definitely did not happen overnight. Following the shortage of forex to import rice, and other farm produce, the CBN and the federal government flagged off the Anchor Borrowers Programme (ABP) to make finance available for smallholder farmers, especially rice farmers.

The poster boys for that policy are the Kebbi rice farmer, who have gone a long way in delivering on LAKE Rice, Olams, and many other rice brands popular in Nigeria today. The CBN says it has disbursed at least N120 billion for these farmers, who make a large chunk of the number of people Buhari flaunts as employed by his government.

Many ministers, including the minister of agriculture and the minister of power, works and housing have claimed that Buhari has employed millions of farmers through the ABP. Emefiele would be smiling.

Politics of Everything: Emefiele, while speaking at the annual bankers’ dinner of 2018, said he is not a politician and would not be light on those who play politics with CBN policies.


“I am not a politician, but people should be very mindful when they open their mouths to say what is untrue because we would come out as central bank to attack it particularly if you use data incorrectly,” Emefiele had said.

Fortunately for him, one of Buhari’s opponents was one of those who spoke ill about CBN policies — and Emefiele did not spare Atiku Abubakar, former vice-president.

In an interview with Bloomberg, Atiku had said Emefiele has not pursued the right policies as CBN governor, stating that he would change the governor — if he is elected president.

Emefiele was quick to desecrate Atiku’s economic plan, describing it as a road to perdition.

“It will certainly lead to capital flight, lead to massive depreciation or devaluation of the currency and ultimately to currency crisis in Nigeria and I think we should all know that it is a road to perdition to ever go in that direction,” he had said.

In government, politics trumps everything, and in this regard, Emefiele seems to have done just fine, in fighting Buhari’s enemy. After all, the enemy of my boss is my enemy.


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