The tenure of Godwin Emefiele as the Governor of the Central
Bank of Nigeria (CBN) left a lasting
impression on the minds of Nigerians,
albeit for both positive and negative reasons. Serving from June 2014 to June
9th, 2023, Emefiele held significant influence over Nigeria’s monetary policies
and, consequently, the overall economy. However, economic experts have
criticized his performance in achieving the critical objectives of the CBN.
The primary objective of the CBN is to ensure economic and
price stability, issue legal tender currency, maintain external reserves,
promote a sound financial system, and provide economic and financial advice to
the government. Unfortunately, Emefiele’s track record falls short in these
areas, according to the experts.
During Emefiele’s tenure, Nigeria experienced a significant
increase in inflation. The Consumer Price Index, which measures inflation, rose
by 241%, the highest compared to his predecessor Sarah Alabi, who had a mere 3%
during her short stay as CBN governor. In fact, Emefiele’s inflation rate was
the worst since 1999, with previous governors recording much lower figures.
Despite implementing measures such as consistent hikes in the Monetary Policy
Rate to combat inflation, the rate continued to rise under Emefiele’s
supervision.
Another setback during Emefiele’s administration was the
depreciation of the Nigerian Naira. The country witnessed a dual exchange rate
regime, with official and black market rates. Based on the parallel market
rate, the Naira depreciated significantly against the US dollar, going from
N167.2 in 2014 to N765.
An analysis of legal tender management under Emefiele’s
leadership revealed concerning trends. Demand deposits increased from
N5,884,873 to N20,498,1143, while credit to the private sector surged from
N16,927,983 to N44,100,132. However, currency in circulation decreased from
N1,496,742 to N2,379,072. Emefiele’s naira redesign policy, which aimed to
update the country’s currency, caused a scarcity of cash in the first half of
2023, leading to criticism and hardship for Nigerians.
The capital imported to Nigeria also faced fluctuations
during Emefiele’s tenure. From 2014 to 2016, capital imports dropped from $21
billion to $5 billion, followed by an increase to $24 billion in 2019, and
another drop to $5 billion in 2022.
Emefiele’s involvement in politics further tainted his legacy
as CBN governor. During the All Progressives Congress’ primary elections,
Emefiele sought to contest the presidential election, but he eventually fell
out of favor and returned to the apex bank. Nigerians heavily criticized his
decision to mix politics with his responsibilities as CBN governor.
Experts and professionals have voiced their concerns over
Emefiele’s performance. They argue that he failed in key monetary policies,
including curbing inflation, managing foreign exchange, implementing interest
rate regimes, and executing the naira redesign policy. His political
involvement has been viewed as a significant mistake.
In response to Emefiele’s shortcomings, Bola Ahmed Tinubu’s
administration made the decision to suspend him as CBN governor. This move,
according to some, was long overdue, considering the injurious impact
Emefiele’s policies had on Nigeria’s economy and its people. They believe that
Emefiele is the worst CBN governor in the history of Nigeria.
With the suspension in effect, the new government led by
Tinubu aims to swiftly implement key economic policies and restore trust in the
system. Efforts will be made to address subsidy removal and provide adequate
palliatives to the populace. Additionally, the administration plans to
implement an exchange rate policy to achieve convergence and prevent
profiteering and the continuous weakening of the Naira. These proactive
measures are seen as crucial for Nigeria’s economic recovery, and there is hope
that the economy will respond positively to the new administration’s policy
direction.
