As the Naira continues its downward turn against the dollar, publisher Newsday Newspaper Chief Edet Isong has called for the sack of the Central Bank of Nigeria Governor Godwin Emefiele. According to him the CBN Governor has plunged the Nigerian economy into an unprecedented tumble and made life wretched for Nigerians. This evidently isn’t the change that citizens voted for. There has been consistency in the poor management of the country’s forex and the fluctuation of the Naira on daily basis since Emefiele became governor. Many businesses have either been crippled or collapsed as a result of his poor handling of the economy, none of his policies have lasted for two weeks and he is yet to take proactive measures to stabilize the exchange rate and forestall inflation and unpredictable currency valuation system. According to financial experts the current decline will be persistent and there is currently no solution in sight.
Godwin Emefiele as a disaster to the change Nigerians long for and the most incompetent CBN governor ever who has supervised the devaluation and denigrating of the naira from One Hundred and Fifty Seven Naira to Three Hundred and Forty Five Naira to a dollar as at February 17 2016.
Severally the Apex bank has defended its actions by stating that it strives to save the economy from hijackers but contrary to this the CBN has with its many frivolous, harmful policies and decisions caused untold harm and hardship to the nation and her citizens.
It is open knowledge that Apex banks across the globe usually brace up their currencies if inflation causes apprehension or alternatively allow a devaluation to weaken importations and encourage exports. Nigeria, on the contrary through the Central bank appears to be set on accomplishing mutually an uncompetitive conversation rate and an increase in inflation. Many investors are understandably alarmed at the damage wreaked on the economy by the CBN under her Governor wondering how much more damage he would wreck before shown the way out.
For starters, instead of allowing the naira to devalue, the central bank is trying to defend it by blocking imports of certain items and refusing to release foreign exchange for their import. With the slump in oil prices Nigeria’s major stay, the Naira has been hit hard. The official exchange rate has slumped to about 345 naira per dollar. The black market rate, a more precise measure, is higher.
Godwin Emefiele, governor of Central bank, defended this action with the excuse that “Nigeria cannot attain its true potential importing everything; as such foreign reserves must be safeguarded to stimulate local production. This list of unlisted items randomly selected includes Indian incense, toothpicks, wire rods, rice and tinned fish as well as indulgences such as private jets. The big question would be, does Nigeria produce enough of these items to carter for the nation? And talk about jets, restrict custodians of our economy from flying them and watch them fizzle out of circulation.
Furthermore, as fallout of a meeting of Bankers Committee a week before, the Central Bank On the 13th of Aprillast year, disseminated a bill that “with immediate effect,” the withdrawal limit from Naira debit cards abroad will be reduced to $300/day to a total of $50,000/year from a stand point of: $900/day and $150,000/year.
To further push home this almost slavery coated decision, Union Bank Managing Director/Chief Executive, Emeka Emuwa who was one of those in attendance at that meeting spoke at the April 13th press briefing. In his words, “We realise that people were using the cards in a manner they were not expected to use them. There were some arbitrage going on, and in order to continue to support the stability in the foreign exchange market. So it was agreed at the committee that the limit would be reduced for the use of the naira debit cards. You will still have, as a customer, unfettered access to your dollar account (cards) but for the naira cards, the limit will be reduced to a judicious level.”
It came as a shock and height of irresponsibility that citizens who were clients of these banks had no say in this matter which took immediate effect from the date of the briefing. Was it lawful for the apex bank to have taken such a hasty and drastic decision against Nigerians? One begins to wonder if the fall in the Naira was really the people’s fault or could it be that as insinuated in certain quarters, the last presidential campaign of dollars rain had led to a crash in Naira.
Central banks are not supposed to and should not individually establish exchange rates. Also, the dollar amounts held by CBN are part of Federation Account (FA) allocations, which it wrongly gotten. It is erroneous to handle such procurements as external reserves and much worse as Central Bank’s external reserves. Federation Allocation dollar allocations constitute a large proportion of the economy’s total forex supply and the CBN’s action slanted forex supply and demand link with the result that dollars flow uni-directionally from the apex bank to the forex market. That is awkward. Ordinarily, the reverse is the case.
At the appointment of Emefiele from Zenith Bank as Governor CBN, there were several outcries that more policies that would favor banks to the detriment of the people would begin to surface. True to these outcries Emefiele’s regime has been one of wide-eyed extortion, ripping off and frustration of people at the slightest opportunity. If it wasn’t withdrawal limits it was cash transaction limits, charges for notifications, charges to transfer, charges to receive, charges to replace ATM cards; an outrageously endless list of extortions.
Considering the deep-rooted monetary and fiscal policy tumbles following maneuvers of the Central Bank of Nigeria, its impulsive inconsistent policies in the wake of the drop in global oil prices, and ensuing weakening of forex reserves and pressure on the Naira, which has sent the Nigerian economy nose-diving, it is virtually vain to expect that CBN Governor, Godwin Emefiele can stop the country from total economic collapse. As he seems to have lost focus and over and again portrayed poor judgment. The Central Bank of Nigeria has botched the alignment of monetary policy with government’s fiscal policy, causing a free-fall of the economy.
His actions which have been critical to the survival of the Nigerian economy have largely been based on trial and error as the crisis engulfing the nation continues to deepen. It is most appropriate and timely that he be sacked and a man or woman competent for the job brought in to save our economy. The longer he stays as chair of the Apex bank the more disservice this administration will be doing to Nigerians.
Within saner climates you are charged next to nothing and even rewarded to keep your money in the bank. Perks peck at you for every transaction you make but in Nigeria the reverse is the case. There is a conscious collusion for you to reward the banks for banking with them.
Emefiele has continued to draw absurd connections between massive CBN deficit disbursement and a strong naira when he should have comprehended that excess naira supply puts plunging weight on the naira. Under his watch, credit from banks has become so expensive in a money market with excess naira liquidity when no commodity should be more expensive when supply exceeds demand.
For the Governor to blame others for the state of the economy simply is self-indictment proving that he lacks the strength of character to actualize CBN mandate conducting himself not as one who provides economic and financial advice to the federal government; but as an agent of commercial banking benefits. And as someone rightly put it a fish out of water who, burdened by inferiority complex, and borne out of personal inadequacies, takes dictation from political godfathers.
Despite blaming the fate of the Naira on global indices in commodity prices including oil, Emefiele’s struggles at steadying the economy, has been dull. He doesn’t seem to get it that Central Bank’s jinx of excessive fiscal shortfalls replaced for oil earnings is the bane of Nigeria’s economic under-performance. Policy recommendations of the CBN have been punctured with obscurities and battered by macroeconomic instability, high inflation, high interest rate, dwindling naira exchange rate, dragging real sector, high unemployment and rising poverty. The Nigerian situation far exceeds a fall in global oil prices. This ineptitude of a man saddled with exclusive fiscal obligation by his actions and indecisions plunging Nigeria into a realm of financial gloom is sign of cluelessness.
As the situation exceeds breaking point with investigation unfolding from the arms scandal, that Emefiele authorized payment of billions in hard cash to the National Security Adviser. He must be sacked otherwise Nigeria will awake to a dawn of one thousand naira to a dollar.
By Ndi Bassey
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