Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has come under heavy censure in recent weeks. Not that the multiple awards-winning central banker is new to scathing darts from critics. Indeed, he has always been pelted by outsiders, and in most cases, financial management illiterates who blame him for every economic woe.
But as it has turned out in some cases, Emefiele’s most acerbic critics are those forex crooks, whom he has been able to largely checkout of their illicit forex trade.
Some are contractors, who lost out in certain contracts within CBN. Then, there is another powerful tribe of forex grifters who source forex from CBN at official rate for the importation of specified critical items, only to make a detour and sell the forex at the parallel market, or in some instances, use same to import other fast-selling items, other than what they sourced the forex for.
There had been cases of some business people who sourced forex from CBN to import machinery to boost the primary sector, but ended up using the forex to import rice, wheat, maize and other items that can easily be produced locally.
Before the arrival of Emefiele at CBN, several camps of vested interests have farmed out different departments of the CBN as their personal estates. A forex-for-import racket had taken hold of the nation’s apex bank. Forex racketeering was rife. Nigerians outside the loop of the financial sector could not notice this because of the windfall of forex earnings coming from crude oil sales. They did not notice that, to keep the naira afloat, all that the pre-Emefiele CBN was doing was to pump extra dollars into the system, just to defend the naira and shore up its value.
All through those years, crude oil sold for above $100 per barrel. It was easy to deploy forex to fund the importation of virtually every item, from the serious to the ridiculous. How do you defend the practice of sourcing forex from CBN to import toothpick, rice, wheat, and just about anything including those things Nigeria has profound comparative advantage to produce locally? It’s an aberrant national lifestyle, which has over the years hurt the economy and insidiously cankered her value fabric.
By 2013, before Emefiele ever knew he would be heading the CBN, Nigeria imported more than 5.3 metric tonnes of rice from Thailand annually and this dug a $260 billion hole in the nation’s treasury every year. Several billions in dollars was also spent importing other grains and produce. Nigerians must never forget that it took the arrival of Emefiele at CBN to put a stop to this profligate lifestyle. He had the courage to ban forex funding of the importation of over 40 items. His argument was that all of them could be produced in Nigeria. It was a masterstroke to preserve scarce forex, especially with the global crash in the price of crude oil.
Looking back, Emefiele has done more good to save the Nigerian economy than any CBN governor. Because of savings from the ban on forex to fund importation of those over 40 items, Emefiele was able to guide Nigeria out of two recessions faster than most developed nations. These were recessions caused by global slump in crude oil price and much later by the Covid-19 pandemic, both of which were no fault of the CBN. In the face of this, some Nigerians still called for his scalp. Wrong, very wrong.
Yet, if critics of Emefiele pretend not to understand the pressure he bore and the courage he showed in closing the forex door to importation of items that can be produced locally, do they not also notice the positive impact of the Anchor Borrowers’ Programme (ABP), launched in 2015, which gave extra wings to the nation’s entire agri-business value chain. Courtesy of the ABP, the same products imported using scarce forex are now being produced in commercial quantity in Nigeria.
When Nigerians blame Emefiele for all the ills of the nation and even for his perceived political hustings, they should do well to remember that he has the historical challenge of managing the CBN at a time Nigeria’s main source of cash, crude oil, crashed to less than $20 per barrel of crude in the international market, yet he steadied the ship through the treacherous turbulence.
Besides the ABP, other such initiatives by CBN include the Agriculture Credit Guarantee Scheme (ACGS), Commercial Agriculture Credit Scheme, Agriculture Support Scheme, Nigerian Incentive-Based Risk Sharing in Agricultural Lending Programme (NISRAL) and Interest Draw-back Programme. These represent Nigeria’s major forward movement in economic diversification.
Emefiele, to his credit, has tinkered with all manner of policies to save the naira. All of this is to build a buffer around the naira. But this seems to infuriate some persons who prefer a free floating of the local currency.
Emefiele, more than any CBN governor, has defended the naira just to protect the future of Nigeria. He has shown courage, dared the forex grabbers and frustrated the smugglers. Above all, he has returned the nation to agriculture, such that locally produced agricultural produce, now form a huge part of our menu and have become a greater part of the raw materials for the nation’s primary sector.
To properly situate Emefiele’s place in the nation’s monetary and price stabilisation history, it’s imperative to interrogate his actions and inactions within the context of global economic indices in the last seven years. His arrival at CBN was followed by global economic headwinds, especially the crash in price of crude oil which represents about 95 percent of Nigeria’s export revenue. This triggered a major shock for the Nigerian economy, leading to a 13-month recession in 2016.
In comparison, the average price of crude oil from 2010 to 2014 was over $100/barrel, but it crashed to as low as $20/barrel. Despite these storms, Emefiele’s deft management of the monetary policies helped to support governments at all levels, including executing capital projects and running overhead costs. When you consider that many oil producers like Kuwait, Russia, Angola and Brunei, had longer lasting recessions of between of 20 – 60 months with worse socio-economic outcomes, Nigerians would appreciate the magic of Emefiele.
Even in the face of the 2020 Covid-19 pandemic, with its attendant lockdown, which plunged global economies into recession, Emefiele was able to mitigate the damage in a manner that made Nigeria’s economy perform better than the economies of some western nations including the United States, United Kingdom and the European Union.
Emefiele should be left alone to do his tasking job at CBN, rather than this new pastime of some persons, particularly fifth columnists, to lump him as one of the muddlers of Nigeria’s filthy political waters.
***Ahmed Sirajo writes from Kano.