February 26, 2024

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The CBN: Searching For a New Proven Governor

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CEM OPINION, FINANCE | By way of a snap post-mortem, the nine-(9)-year tenure of the suspended Governor of Central Bank of Nigeria (CBN), Mr Godwin Ifeanyi Emefiele, CFR, aptly described by Google search as a “Nigerian politician, economist and banker”, is one buried in the practice of voodoo banking. His stint at CBN, according to informed financial experts, is best associated with guinea-pig financial engineering, typifying irrational approach to macro-monetary problem solving. The unprofessional handling of the recent cash swapping, and the abysmally failed Naira redesign program, are part reasons for passing the judgement.

Borrowing extensively from Nairametrics’ recent article on “Godwin Emefiele’s Legacy: Controversial policies and economic scepticism”, our opening propositions are well founded, without ambiguity, in that Emefiele’s tenure as Governor has been marked by controversial policies, including his approach to monetary policy and inflation control, maintenance of multiple exchange rates, and allegations of corruption and exploitation in the financial system. The Governor’s involvement in partisan politics, questionable policy decisions, and lack of accountability, have equally raised concerns about the integrity of the CBN and its regulatory responsibilities. Invariably, it could be said that his tenure, more than any other ones before him, has brought the Apex Bank to disrepute, odium and negative brand equity among critical stakeholders both locally and globally. The picture is so sordid that the new President, Asiwaju Bola Ahmed Tinubu needed to call for a house cleaning exercise of the Regulatory Body at his Inauguration address with a view to ensuring its sanctity.

In a broader perspective to the characterisation of the Governor’s era, Laolu Akande, the spokesperson for the immediate past Vice-President of the Nation, Prof Yemi Osibajo contextualized Emefiele’s troubling time on integrity deficiency, succinctly positioning:
“It was about time the CBN Governor faced suspension and investigation. All people of goodwill and those who value integrity, irrespective of political leanings would be thankful for this development.”
“Emefiele was given a long rope but he failed to redeem himself. His shenanigans and the colossal damages he perpetrated at the CBN was to the utter detriment of the Nigerian people, ” he tweeted recently.
On the whole, a number of factors combined to give the suspended CBN Governor a negative scorecard, capable of eroding confidence and goodwill in the Institution he represented. And going forward, there are ample lessons to imbibe in searching for his successor, the new CBN Governor.

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Taking off from the prism of integrity quotient, the prospective CBN Governor must necessarily not lack in integrity, emboldening his past and present conducts. This is essentially factual because in the face of all odds, one of the guiding principles of Warren Buffett (even at an advanced age of 92), a foremost American business magnate and investor (with net worth values of over $117 Billion) plays up realistically: “Integrity holds intelligence and energy together, or everything crumbles.” In other words, professional skills, proficiency, creativity, diligence, exposure, brilliancy, pedigree, etc, matter in assigning corporate responsibility but nothing compared to possession of ethical values and principles of non compromises in managing a sacred Institution like a Central Bank. Indeed, as a Bank of last resort, its helmsman must live above board, ensuing every form of financial inducements that can upturn the stability of the financial system. As corollary attributes, the Exchequer (as the Governor is addressed in other climes) must exemplify trust, honesty and integrity, even as banking is built round those concepts. This, partly, entails openness, accountability and transparency on the part of the occupier of the sensitive post. It is totally unacceptable to have a personality with vested interests (a second majority shareholder in a Bank) as the CBN Governor. He will surely corrupt the Institution to his advantage, and not ensuring level playing grounds for his peers in a competitive environment.

Following closely on the issue of integrity, and as extrapolated from Emefiele’s calamitous tenure, the aspiring CBN Governor must develop repugnance for overt political tendencies, ensuring neutrality at all times. The CBN, as an Institution playing critical role in harmonising fiscal and monetary policies, must not mix up its roles with open politics. It amounts to an aberration when a CBN Governor openly declares interest in running for the presidential position of the Country while still in service. Surely, such miscalculated step will polarise the system, and divert from the core objectives of the Institution.

In searching for a new CBN Governor at this stage of a house cleaning exercise, thorough care must be taken to seek out an expert with insider-knowledge dynamics of the banking industry, as well as the regulatory wherewithal. Though a rare combination of attributes to find, it serves the system efficiently/productively if a perfect fit is deliberately sieved among the avalanche of expertises available, and used.

Essentially too, given the enormous responsiblities of a Central Bank to the overall management of the Nation’s economy, the search for a new Governor must take cognisance of the proven skills, training, experience and exposure of the prospective candidate. For an independent Institution that should specialise in the control of money supply, the conduct of monetary policy, supervision of the financial system, management of the legal tender, and engendering macroeconomic stability in a country like ours, a “trial-and-error” CBN leadership will definitely slow down a new Government desirous of accelerated progress and growth.
The highlighted responsibilities, partly meant to stabilise the nation’s currency, keep unemployment low and prevent inflation, are critical calls for a financial technocrat of long standing (and not for a neophyte at all).

A search for a new CBN Governor must also consider the likely global ratings of the intending candidate vis-a-vis pedigrees of established interface (relationships) with international organisations like the World Bank, the International Monetary Fund (IMF), the World Economic Forum (WEF), Credit rating agencies, and others. The country is perceived positively among the global financial community if the right choice is made.

In conclusion, it is sufficient to emphasize that in a search for a new helmsman for the CBN, conscious efforts must be devoted to seeking proven skills for monetary and macroeconomic management, unblemished integrity scorecards, abhorrence of partisan politics, pragmatic understanding of Nigeria’s fiscal and monetary peculiarities, genuine concerns for global acceptability of the candidate, among other set criteria. And truthfully, the country is blessed with such experts both locally and internationally.

Eddy A. Ademosu, a former president of the Association of Corporate Affairs Managers of Banks (ACAMB), is a foremost Brand Reputation Consultant and Financial Communication Strategist

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