High hopes as Godwin Emefiele takes over as CBN Governor

As his term as Governor of the Central Bank of Nigeria (CBN) commences on Wednesday June 4 2014, there is a widespread expectation in industry circles that Mr Godwin Emefiele’s calm nature among his other qualities would make him a more effective boss at the apex bank than his predecessor, Mallam Lamido Sanusi.
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Virtually all the industry stakeholders that spoke with Daily Newswatch argued that although Sanusi introduced several measures that impacted positively on the banking sector, he probably would have been credited with more achievements if he had a personality that was similar to Emefiele’s.

According to them, central bank chiefs all over the world are usually, calm, conservative individuals who, because of the likely impact of their comments on the markets, are measured in their pronouncements. They added that unlike Sanusi who openly admitted to having a love for controversy and often appeared to go out of his way to court it, Emefiele would, like typical central bankers, steer clear of controversies and focus on the regulator’s core mandates of checking inflation and ensuring exchange rate and financial system stability.

For instance, a top official of a leading new generation bank, who did not want to be named, cited Emefiele’s tenure at Zenith Bank which, according to him, ended without him being linked to any major controversy.

The official said, “Given all the needless controversies that Sanusi got himself embroiled in, the coming of Emefiele will be a breath of fresh air at the CBN. He has the right temperament, qualifications and the track record to bring stability to the central bank, which is what the CBN needs at this time.”

Also commenting on his expectations of Emefiele as CBN Governor, a management consultant and former banker, Mr Patrick Ikeobi, said, “The CBN is the sort of institution that has the skilled personnel that would guide whoever is appointed as its governor. As it is Emefiele already has an excellent track record in banking, has headed one of the biggest banks in the country, so somebody like him understands what the job entails and should perform well. Sanusi was also an experienced banker before his appointment but in his own case, he came in with an agenda to deal with certain persons he perceived to be the problems of the sector. It was this attitude that was responsible for some of his excesses.”

He noted that unlike Sanusi who was widely believed to have actively lobbied for the job, there is no evidence that Emefiele solicited for it.

In a recent chat with Daily Newswatch, Diamond Bank’s Executive Director/Chief Financial Officer, Abdulrahman Yinusa, also spoke on his expectations of Emefiele. According to him, “He is somebody that is in the industry and so we hope that all of that experience that he has, being a player in the industry, he will bring to bear on the job. I will like to agree with commentators who say that there is likely to be more stable regulatory environment. I think we need it. This is because the first job of a central bank is actually price stability and financial sector stability. Those are the primary roles of a central bank. So if people feel that the gentleman taking over is going to promote that stability, this is good for the industry.”

Indeed, a report by a national daily last week found that stakeholders’ main expectation of the incoming CBN governor is that he should strive to ensure stability in the system by continuing with the implementation of policies introduced by his predecessor.

The newspaper quoted one of the stakeholders as saying that, “I think what I would say to him, is to take a good look at what his predecessor in the office has done and take the good ones. What I would say about the outgoing governor is that he has introduced sound risk management practices in the system. I think he has brought in some level of discipline in the system, so my advice to him is that he should stick to that, he should give some sense of stability to the system. We have seen a lot of policy summersault under the outgoing governor, maybe he should try to let things stabilise a bit before he starts introducing a lot of changes.”

Analysts point out that Emefiele is likely to continue with some of the major policies introduced by the CBN under Sanusi’s leadership because of the active role that the Bankers’ Committee played in the formulation and implementation of such policies. A notable example is the cashless policy which under Sanusi, had taken off in Lagos, the Federal Capital Territory (FCT) five other states, and is scheduled for implementation nationwide as from 1 July.

As Chief Executive Officer of Zenith Bank, Emefiele reportedly played a leading role in the implementation of this policy and is known to be highly committed to it.

Similarly, the incoming CBN boss served as chairman, Biometrics Subcommittee of the Bankers’ Committee on the $50 million biometric project which was inaugurated by Sanusi on February 14 this year. The project aims at building a central database of bank customers in the country. Having spent valuable time taking part in conceiving this project, it is unlikely that Emefiele would allow anything to hinder its implementation.

Further evidence that he will also adopt Sanusi’s stance of stoutly defending the naira even in the face of calls in some quarters that the currency should be devalued was evident at Emefiele’s Senate confirmatory hearing when he disclosed that he was strongly opposed to a devaluation of the naira as such a move would have a “devastating” impact on the economy.

As he put it, “This is an import dependent economy; devaluation is not an option.”

He stated that the decline in foreign-exchange reserves was due to a “speculative attack” and promised to take measures to support the naira.

According to him, “I am aware that the core mandate of the Central Bank of Nigeria is to achieve the monetary and price stability. Another core mandate of the CBN is to ensure that we have a strong naira and build strong foreign reserve. We are also expected to ensure that we have a strong financial system in Nigeria. We would ensure if approved, that whatever monetary policy decision that would be taken would be those that would improve the level of employment in Nigeria because we know that employment is very important. We know today that we have an employment emergency in Nigeria. And we must ensure that whatever decisions we take at the CBN in the Monetary Policy Committee (MPC) would be those that would lead to improvement in the level of employment in Nigeria.

He added that the regulator under his leadership would ensure that it works with the manufacturing companies to ensure that we improve on their level of production and by extension, ensure that we improve and achieve economic growth in Nigeria,” he added.

A profile of the incoming CBN helmsman released by Zenith Bank showed was appointed GMD/CEO of the bank in August 2010. Until then he was the Deputy Managing Director of the bank, having been appointed into that position in 2001. Emefiele had also been on the bank’s management team since inception and has held various management positions in the bank, including serving as the Bank’s Executive Director in charge of Corporate Banking, Treasury, Financial Control and Strategic Planning.

Until he took over as Group Managing Director, Emefiele was directly responsible for all the Group’s local subsidiaries, Treasury and Correspondent Banking, and Multilateral, Conglomerates, & Private Banking. He also had responsibilities for direct supervision of majority of the bank’s branches in Lagos and Northern Nigeria.

Emefiele has over 26 years of banking experience and holds a B.Sc and an MBA in Finance both from the University of Nigeria Nsukka. Before commencing his banking career, he lectured Finance, Bank Management, and Insurance at the University of Nigeria and University of Port Harcourt respectively. He is an alumnus of Stanford University, Harvard and Wharton Graduate School of Business where he took courses in Negotiation, Service Excellence, Critical Thinking, Leading Change and Strategy.”

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