By Boniface Chizea
CBN governor Godwin Emefiele today marks his first 100 days in office. The journey has been good so far. Emefiele has been able to make the Central Bank apolitical. As should be expected, he has not made any politics-related statement, to the best of my knowledge. In fact, he has not granted one interview to any news media; that much we had predicted. The governor has established a rapport with the President which is as should be expected as he must be seen to be complementing the efforts of the fiscal authorities, particularly this President. It is on record that in this respect that the Central Bank recently launched the Micro, Medium and Small Scale Enterprises (MMSE) 220 billion Naira fund to boost the contribution of the bank to the economy and to optimize job creation.
As President Goodluck Jonathan observed on that occasion, a survey conducted by the Federal Office of Statistics in 2010 indicated that there are 17.2 million MMSE enterprises in the country which account for the employment of 32 million Nigerians. And that if each one of these businesses employ just one additional person we would be adding 17 million jobs making considerable dent on the problem of unemployment in the country which has been seen by most informed compatriots as the cause of most of the anti- social behaviors prevalent in the economy not forgetting even the ravaging insurrection in our economy. The CBN is also involved in attempts to provide funding for the gas sector. It would appear that the details in this respect are still in the works to be activated in the shortest possible time. There is therefore no doubt that the President must be saying to himself that he made a good decision in making this appointment.
It is also all quiet with the legislators. All the talk about revisiting the organizational structure of the Central Bank in order to whittle down the governor’s powers contrary to received wisdom and best practice has evaporated. Even when the governor decided to sanitize the operations of Bureau De Change in the country to block the leakage of foreign exchange which they perpetrate as they operate as usual the operators rushed to the legislators to come to their assistance; he engaged with the legislators and left them with promises and assurances that they would partner with the governor to ensure that he is not impeded as he discharges the responsibility of his office. Even the operators have been pacified as many of their members — over two thousands of them – surprisingly met the new capital requirements.
Those that were unable to do so were still left to continue to operate except that access to official foreign exchange was now denied. It must be borne in mind that operating without foreign exchange allocation from official channel is the common practice in most other jurisdictions. By adopting this approach the fear that the policy will lead to layoffs worsening the unemployment situation was put to rest and all concerned are at peace. Even as the Governor did not have any choice but to change the management at MINT due to lack of harmony/productivity.
The Bankers Committee recently under his watch returned notionally some charges on remote on use ATM. On the fourth withdrawal using third party ATM a charge of N 65 Naira applies. There were so many outcries from compatriots who would want to eat their cake and have it. Who would complain about inadequate availability of these machines and the quality of service particularly network related shortcomings but would not want to make any contribution towards the desired solution? Some of us are of the view that the governor and the Bankers’ Committee were pulling their punches in this respect because the charge should have been returned on all such withdrawals as compatriots have a choice.
Emefiele had a soft landing on his debut Monetary Policy Committee meeting. The full complement of the membership of this body was present and there was unanimity of views as the decisions were taken and reported. There were those who expected that the governor could have seized the opportunity of this meeting to twinkle the interest rate albeit notionally to keep fidelity with his promise that he would work to reduce the level of prevalent interest rates in the economy. But we must empathize by recalling that because the governor served notice during his confirmation hearing that he would work to reduce the rate of return on fix income securities that there was immediate run with foreign investors offloading their investments almost causing instability.
I would want to bring to the attention of the governor some of the promises he made as part of the agenda he unfolded for the Central Bank. He promised that the data on unemployment would be one of the things the MPC would consider. I recall raising issues regarding the difficulty in having such data updated as required. Borrowers requiring no more than N 50,000 only would be able to do so without collateral even if this will be done under some cooperative arrangement. The black list of bad debtors is also still being awaited as that would have the effect of returning sanity in the greater interest of the health of the banking system.
The country has enjoyed relatively stable exchange rates and in a short time the naira even appreciated against the dollar and the reserves which had dwindled have witnessed some accretion. I give full marks to this CBN governor.
Dr. Boniface Chizea is the managing consultant, BIC Consultancy Services, Lagos.