Godwin Emefiele

By Zayyad I. Muhammad 

The Central Bank of Nigeria (CBN) has been in the news for both good and bad reasons since President Bola Ahmed Tinubu’s administration was inaugurated a little more than a year ago.

From Godwin Emefiele’s dismissal and subsequent arrest to the unprecedented devaluation of the Naira, the controversial transfer of staff from Abuja to Lagos, the firing of 26 out of 29 directors, the revelation of the theft of $6.3 million from the CBN vault during Emefiele’s tenure, and the intense pressure on the Olayemi Cardoso-led management to restore normalcy, the CBN has never faced such a tense and tumultuous period in recent memory.

Who is to blame? The CBN Governor, Olayemi Cardoso, and his four deputy governors? President Tinubu’s sudden decision to float the Naira? Emefiele’s evident recklessness and partisan politics? Or the entire political and economic system

Cardoso and his four deputies have résumés and experience comparable to professionals worldwide. However, critics argue that, despite his experience as a commercial banker, Cardoso lacks the expertise of a central banker. They also contend that his previous role as Tinubu’s commissioner for Economic Planning and Budget could influence his performance, suggesting he might view the CBN Governor’s position as merely a form of patronage.

The CBN reached its lowest point during the Emefiele era when its regulatory and stabilizing functions became intertwined with politics and business interests. Court documents revealed that on February 8, 2023, four individuals stole $6,230,000 in cash from the CBN. Additionally, the Federal High Court in Lagos recently ordered the final forfeiture of properties valued at N12.18 billion linked to Godwin Emefiele.

The developments (above) indicate that Emefiele’s successor will encounter significant challenges. Nevertheless, the primary role of a central banker is to ensure stability during crises, focusing not only on critiquing past actions but also on delivering effective results that positively impact the economy and its citizens.

Cardoso and his team are currently grappling with several challenges: the instability of the Naira, public perception of the CBN, and widespread belief that Bureaux De Change operators wield undue influence, while the CBN has struggled to establish a mutually beneficial operating framework with them. The reality is that Cardoso’s ‘by-the-book’ approaches have not yielded [the] desired results. Although the CBN has managed to achieve some consistency in forex supply and clear the backlog of dollars owed to airlines and other foreign investors, the transfer of staff to the Lagos office and the dismissal of 25 out of 29 directors and additional staff must be considered in the context of policies initiated as far back as the reign of Lamido Sanusi.

Regarding dismissing directors and senior staff, how can Cardoso be expected to work effectively with individuals deeply influenced by Emefiele’s actions? Even in the military, police, and paramilitary forces, such restructuring is not uncommon, where hundreds of generals can be retired simultaneously, and the world moves on.

It’s also important to commend Cardoso and his team’s collaboration with the Nigeria Economic Summit Group (NESG) and other stakeholders to enhance the business environment. Such efforts are crucial for the CBN to build trust, ensure price stability, and implement effective monetary policies that prevent economic instability and improve foreign exchange rates and inflation.

On the other hand, why hasn’t the CBN been able to restore the Naira to its actual value against the dollar? The biggest mistake we make in Nigeria is sometimes applying global theories and laws to our unique system, which operates differently from other countries. These theories and laws succeed elsewhere because they strictly adhere to the principles and standards that support their effectiveness. However, CBN’s attempts to elevate the Naira to its expected value have consistently defied conventional economic laws and theories.

Cardoso and his team should consider adopting a strategy that combines established economic laws and theories with innovative approaches. One of their critical assets could be neighbouring countries such as Cameroon, Chad, Republic of Benin, Equatorial Guinea, and Niger Republic, along with other West and Central African nations, as well as Nigeria’s agriculture and manufacturing sectors. These countries import significant quantities of agricultural and manufactured goods from Nigeria, making them prime targets for the CBN’s efforts to strengthen the Naira.

A proactive step would involve the CBN collaborating extensively and effectively with governments of border states to establish well-structured international free-zone markets at border points. These markets would exclusively transact in Naira for all Nigerian products sold there. This approach could incentivize businesses from neighbouring countries to prefer purchasing goods in Naira due to its low-cost advantage, thereby increasing demand for the Naira.

Furthermore, the CBN must address one of its weakest points: inadequate public relations (PR). There is a pressing need to enhance its PR strategy because most of the public perceives the current CBN management as solely on a vendetta mission to discredit anything associated with Emefiele and engage in political maneuvering rather than recognizing its efforts to rectify systemic issues.

The Cardoso team must acknowledge that despite being a strategic institution, the CBN is susceptible to being viewed like any other Nigerian government entity. Therefore, the CBN must establish and maintain a robust PR program that informs the public about its activities and portrays the institution as independent from political influences despite being overseen by politicians.

Part of the CBN’s PR strategy should involve revitalizing and restructuring its commendable agricultural programs, which were previously undermined under Emefiele’s tenure. Cardoso should seize this opportunity to lead the relaunch of these programs and engage with the public to demonstrate his commitment as a genuine central banker, focused on economic stewardship rather than engaging in political vendettas.

Zayyad I. Muhammad writes from Abuja via zaymohd@yahoo.com.

By Sani Bello Hamza

Nigeria is a country naturally blessed with abundant resources, fine and reliable crude oil, thriving agriculture, resilient youth, and a hardworking population. Yet, its citizens are trapped in third-person-induced hardship and suffering. The citizens of the country are unable to cater for their needs and their immediate families.

The tragedy of Nigeria can be succinctly summed up in the cliche “Nigeria, so rich and so poor.” The country is prosperous, and yet its citizens are impoverished.

Someone may ask how that is possible. We know Poverty and abundance cannot be placed on the same table.

It is possible because the leaders are not driven by passion to lead but greed to accumulate wealth from public confers. Politics is now a get-rich-quick scheme and not an avenue to serve. The gap between the upper and lower classes is irreparable, and the middle class suddenly disappears.

Those in the upper class are living extravagantly because the country’s leaders have turned the country’s treasury into their account; they withdraw at will without recourse to explanation or auditing.

It is now a norm that politicians live outside their monthly or annual allocations. They rake public funds for personal and family usage.

This is happening in a country where over 20 million children are out of school, and 84 million are living in multidimensional poverty–out of its 200 million population.

While growing up as kids, we heard, and we are still listening, of the Abacha loot. And, recently, the Diezani saga and the Emefiele Brouhaha. The former CBN Governor is under investigation for whisking away with 89 trillion Naira stamp duty charges deducted from the accounts of Nigerians.

In 2022, when Hon. Gudaji Kazaure, a former member of the House of Representatives, was on air exposing the menaces and how the former CBN governor, his deputies, and other political appointees milked the Nation’s Treasury and walkway with a whooping sum of 89 Trillion Naira; we made a joke of him and thought it was a tale of the moonlight or a fictive movie.

The former lawmaker claimed that former president Buhari appointed him and others to investigate and recover Stamp Duty and other bank charges deducted from Nigerians’ accounts.

He said his committee uncovered 89 trillion Naira that was unaccounted for and unremitting to the federation account,courtesy of Emefiele and his deciphers.

The report generated mixed reactions among Nigerians; some of us believed the allegations were true, and others felt the lawmakers were trying to blackmail and tarnish the image of the CBN Governor. A renowned journalist argued it was impossible as Nigeria does not have such a huge amount in its Treasury. Others went ahead to question Hon. Kazaure’s mental health. Interesting!

After almost a year of Hon. Kazaure’s Brouhaha, President Bola Ahmed Tinubu inaugurated a special presidential committee headed by special investigator Jim Obazee to probe the activities of CBN and other affiliated institutions.

The committee submitted a report to the president in which the chief investigator recommended prosecuting Emefiele and 13 others for gross financial misconduct and mismanagement.

According to the report, the committee found 593 bank accounts located in the UK, USA, and China that the former governor used to illegally keep Nigeria’s wealth. The committee also discovered 543.4 million pounds kept in UK Banks.

The most shocking revelation of the investigation is not the uncovered 593 bank accounts but the purported Naira redesign, which subjected innocent Nigerians to untold hardship and led to the winding up of many businesses. The committee found out the activity was neither the CBN board recommended nor the president approved it. Contrary to section 19 (1) of the CBN Act. Emefiele acted on the advice given to him by Tunde Sabiu, former President Bubari’s chief protocol officer. The redesign was purely intended to frustrate the political ambition of some politicians and prevent them from attaining their desired offices.

There was also a payment of 6.23 million dollars from the CBN vault to unknown foreign election observers whose identity is still unknown, apart from the 1.3 billion Naira paid as legal fees on the Naira redesign and related cases.

This is just a part of the investigation, as the committee has not obtained the Stamp duty-related documents. I’m sure there will be more shocking revelations in the coming days/months.

Nigeria has suffered dramatically from recalcitrant public servants, and the country is too fragile to bear another burden. A thorough investigation should be carried out with expertise and dexterity. The president should make sure those involved in this inhumane act face the wrath of the law and are prosecuted accordingly.

Hon. Gudaji Kazaure has been vindicated, and it’s time to prosecute Emefiele!

Sani Bello Hamza is a Law student at Ahmadu Bello University Zaria. He writes from Zaria and can be reached through his email: sanibellohamza@gmail.com

By Baffa Kabiru Gwadabe

Over the past few months, Nigeria has been suffering from continuous depreciation of its currency, the naira. The naira has depreciated from barely ₦600/$ in the last three months to ₦1,300/$ today, the 27th of October 2023. This is enormous, considering the loss of value by more than 120%. Many are worried, including my little self, about this development. But the recent propositions of solutions by many provoke such a write-up.

It is good to start with some questions concerning the crisis. What is happening? What went wrong? Who is to blame? What are the ways out? What will be the lasting solutions?

The above questions may not be provided with answers, as many out there know the answers already. The focus should remain on some best practices or exchange rate regimes to hinge on. Let me start with some highlights on the developments in Nigeria’s foreign exchange market.

In 1971, when the Gold Standard was abolished under the Bretton Woods System, several foreign exchange rate management regimes were pursued in Nigeria and other parts of the world. These include the independently adjustable peg, crawling peg, independent peg, collective exchange arrangement, dual exchange and floating regimes. IMF member countries practice six (6) other exchange rate regimes, which were later compressed into three (3) regimes to include pegs, limited flexibility, and great flexibility. These were later decomposed into fifteen (15) regimes, mainly from 1975 to 1998 (see Mishkin, 2007).

All those regimes were adopted unevenly by the IMF countries. This means they practice one or more of the regimes based on their choices and persuasions. By 1999, the IMF proposed eight (8) different exchange rate regimes. They include separate legal tender, currency boards, conventional fixed (pegged against a single currency or basket of currencies or other commodities like gold), pegged within horizontal bands, crawling pegs, crawling bands, managed floating and independent floating (see Mishkin, 2007).

Still, these interchanging regimes continued in Nigeria depending on the available foreign reserves, capital inflows and current account balances. Nigeria’s forex crisis worsened in the 1980s when the US economy pursued Nigeria to devalue its currency by 10% and other scenarios. However, some attention will be given to the last ten years or so, particularly the administration of President Muhammadu Buhari or the reign of Godwin Emefiele as the CBN Governor (2014 – 2023). Some reflections would also be made on earlier antecedents before the Buhari’s and current administrations.

Nigeria has pursued two dominant exchange rate regimes: the Retail Dutch Auction System (RDAS) and the Wholesale Dutch Auction System (WDAS). The RDAS is an exchange rate regime introduced in Nigeria in 1987. It focuses on buyers (end-users or customers) of Forex (USD) to bid for the prices, and the marginal bidder is supplied with the quantities by the CBN through authorized dealers. Under the RDAS, the inept dealers are supplied less, while the highest bidders are penalized for rent-seeking and invitation for depreciation. 

The WDAS, on the other hand, is an exchange rate regime targeted at maintaining the gains of the RDAS and the continued liberalization of the forex market. The WDAS came into operation in Nigeria in February 2006 and allows authorized dealers to buy forex on their accounts rather than on behalf of end-users. Also, the authorized dealers are carefully watched by the CBN, and the dealers are also allowed to trade in the interbank forex market. During that time, the CBN pursued other special interventions of forex sales to Deposit Money Banks (DMBs) and direct sales to licensed Bureau de Change (BDCs). The CBN further mandated that DMBs increase Business Travel Allowance (BTA) and Personal Travel Allowance (PTA) from $2,500 and $2,000 to $5,000 and $4,000 per quarter, respectively. All these policies were sustained in positive directions as the naira continued to appreciate by 2.6%, 8.7% and 5.8% for 2006, 2007 and 2008, respectively.

However, at the beginning of 2009, there was an observed forex policy reversal and the reintroduction of RDAS to reduce capital outflows and depletion of foreign reserves. The interbank trading segment was suspended. This was followed by sales restriction of forex to oil companies and government agencies and sales of forex to BDCs. But towards the end of 2009, the CBN called for recapitalization of BDCs in what they call ‘Class A’, while those that did not recapitalize are called ‘Class B’ BDCs. Both ‘Class A’ and ‘Class B’ BDCs can bid a maximum of $1 million and $250,000 respectively.

Similarly, by 2016, Nigeria’s forex market was further liberalized. During the period, the average naira-dollar exchange rate was N197/$ at the interbank window, representing a depreciation of 18.7% (as the exchange rate was N160/$ before 2016). However, one worrying thing remains: the premium between the interbank and BDC sections was about 41.5%. After this, some other forex regimes were still embraced under the administration of President Buhari and Godwin Emefiele. For instance, forex primary dealers (FXPDS) and non-FXPDS were introduced into the forex market in 2017.

In addition, longer-term derivatives like forwards trading from 1 to 3 months tenor and up to 2 years were introduced. The exchange rate was relatively stabilized at averages of N231.76/$ and N351.82/$ at interbank and BDCs, respectively. This has created many arbitrage opportunities for those with access to the interbank rates to continue to worsen the forex market. Such a trend continued for 2020, 2021, 2022 and until 2023. For instance, as of March 2023, the official rate was N462/$, while in the black market, it was an average of N750/$. 

The sacking of Emefiele as the CBN Governor and the appointment of the acting CBN Governor, Mr Shunobi, in June 2023, where the latter tried to close the gap and arbitrage opportunities, moved the official rate from N474/$ to N664/$. With the appointment of substantive CBN Governor in September 2023, Mr Cardoso, the apex Bank, moved on with complete deregulation of the forex market, and this has led to incessant depreciation of the naira to a historic level of N1,300/$. However, it now appreciates an average rate of N1,000/$ and other rates depending on information and locations.

The next thing to talk about is the proposed solutions to the lingering naira-dollar crisis. However, it is important to note that the CBN’s recent and previous exchange rate policies are floating in nature or simply deregulating the forex market, and this is counterproductive as it has not provided the desired results, especially recently. This is because floating regimes are usually for export-dominant countries such as China, the United States, Japan, Germany, India, Russia and Saudi Arabia, among others, as argued by the Mundell-Fleming model. Nigeria is a predominantly import-dependent economy. As such, depreciations affect inflationary levels in the first round (exchange rate pass-through to inflation) and at the ‘second-round’, popularly known in the current literature as the ‘second-round effect’.

To end this submission, the CBN needs to do one or two things to exit from the naira-dollar crisis, and these include:

(1) Invite a small but huge ‘Conference of the Parties’ (COP) to deliberate and take appropriate decisions for implementation immediately;

(2) Under the COP, dollarization with its components; official dollarization, unofficial dollarization, partial dollarization, etc should be reviewed;

(3) Hard-peg exchange rate regime should be deliberated;

(4) Managed-floating regime should be discussed;   

(5) Most importantly, sources of the forex demand pressures must be exposed.

Baffa Kabiru Gwadabe wrote from Bayero University, Kano, via bkabirugwadabe@gmail.com.

By Abdurrahman Muhammad

An Islamic human rights organisation, the Muslim Rights Concern (MURIC), has called on men of the Department of State Services (DSS) to set the former boss of the Economic and Financial Crimes Commission (EFCC), AbdulRasheed Bawa, free or charge him to court. 

Making the call on Thursday, 17th August, 2023, was the Executive Director of the Muslim Rights Concern (MURIC), Professor Ishaq Akintola. 

The full statement reads:

“Abdul Rasheed Bawa, former chairman of the Economic and Financial Crimes Commission (EFCC), has been in detention since 14th June 2023 without any explanation whatsoever. 

“This is contrary to the letter and spirit of Section 36 of the 1999 Constitution of the Federal Republic of Nigeria, which guarantees fair hearing in compliance with the judicial principle of audi alterem partem (i.e. hear from both sides to a case before taking a decision). Nigerians are yet to hear from the former EFCC boss. Neither have they heard from his lawyers.

“There should be no detention without trial in a democracy. It stands in contradistinction to Section 41 of the 1999 Constitution of the Federal Republic of Nigeria, which says inter alia, ‘Every citizen of Nigeria is entitled to move freely throughout Nigeria and to reside in any part thereof…’.

“Article 7(b) of the African Charter on Human and Peoples’ Rights also stipulates the right to be presumed innocent until proven guilty by a competent court or tribunal. To that extent, therefore, it must be assumed that Bawa is innocent.

“MURIC demands that he should be set free or brought to court where his charges will be read to him. He should also be allowed to see his lawyer, his personal doctor and key members of his family.

“If Godwin Emefiele, who traumatised all Nigerians for months, could be arraigned in court twice since his arrest, we wonder what special crime Bawa committed to have warranted his indefinite detention. Could it be because the former CBN governor has access to a bottomless pit of foreign and local currencies and he could therefore engage the best lawyers in the land while Bawa, a young aspiring Nigerian, cannot afford lawyers’ huge fees?

“MURIC, therefore, demands the enforcement of Allah-given fundamental human rights of AbdulRasheed Bawa. He should be set free or arraigned before a court of competent jurisdiction where he can be granted bail. 

“Our vision of Nigeria is that of a land where every man or woman is free from institutional, societal and individual coercion, a land where tyranny, oppression, injustice as well as political and socio-economic marginalisation become history.”

By Ahmad Deedat Zakari

The suspended governor of the Central Bank of Nigeria, Godwin Emefiele, has arrived at the Federal High Court sitting in Lagos for trial. 

The former apex bank boss arrived at the court premises around 9:20 am for trial on the allegations of unlawful possession of firearms. 

He is to stand trial on two counts charge of possessing a single-barrel shotgun (JOJEFF MAGNUM 8371) without a license.

Trouble began for Emefiele on June 9th, when he was suspended by President Bola Ahmad Tinubu to allow investigations into his activities as governor of the apex bank. 

Emefiele was arrested upon his suspension and has been in the custody of the Nigerian secret police since June.

By Uzair Adam Imam

The Department of State Services (DSS) Thursday said that it has charged the suspended governor of the Central Bank of Nigeria (CBN) to the court.

This was coming as a response to the order by a Federal High Court sitting at Maitama in Abuja which it ordered that Emefiele should either be released or charged to court.

Recall that in a judgement delivered by Justice Hamza Mu’azu, the court held that Emefiele’s continued detention without trial, amounted to a gross violation of his fundamental right.

Responding, Peter Afunanya, DSS spokesperson, said, “Sequel to an Abuja High Court Order of today, 13th July, 2023, the Department of State Services (DSS) hereby confirms that Mr Godwin Emefiele has been charged to court in compliance with the Order.

“The public may recall that the Service had, in 2022, applied for a Court Order to detain him in respect of a criminal investigation.

“Though he obtained a restraining order from an FCT High Court, the Service, however, arrested him in June, 2023, on the strength of suspected fresh criminal infractions/information, one of which forms the basis for his current prosecution.

“The Service assures the public of professionalism, justice and fairness in handling this matter and indeed the discharge of its duties within the confines of the law,” he added.

By Uzair Adam Imam

A Federal High Court sitting at Maitama in Abuja has ordered the Department of State Services (DSS) to release the suspended Governor of the Central Bank of Nigeria (CBN), Godwin Emefele, from detention.

The court order on Thursday asked the DSS to, within seven days, release Emefele or charge him to court as his continued detention is tantamount to a breach of his fundamental human rights.

In a judgement that was delivered by Justice Hamza Muazu, the court held that Emefiele’s continued detention without trial, amounted to a gross violation of his rights.

He added that since allegations against the embattled suspended CBN Governor contained bailable offences, the DSS ought to grant him administrative bail, pending his prosecution.

The judge was quoted to have said, “Though I am in sympathy with the Applicant (Emefiele), my sentiment will not go far to deliver judgement by granting all the reliefs sought by the Applicant.

“The Applicant has not shown that his arrest, detention and investigation were unlawful.

“However, I am concerned that the application is not without merit. The Applicant is entitled to a fair hearing.

“At this point, the continued detention of the Applicant cannot be justified in the absence of any charge against him.

“At the very least, justice demands that Applicant should be released on administrative bail.

“Consequently, I hereby male an order, directing the Respondents to, within one week, charge the Applicant to court or release him on administrative bail,” the court held.

By Muhammadu Sabiu

President Bola Tinubu has approved the suspension of Godwin Emefiele, the governor of the Central Bank of Nigeria. 

Willie Bassey, Director, Information Office of the Secretary to the Government of the Federation, said in a succinct statement on Friday night that it is in response to an investigation being conducted by his office and upcoming financial sector reforms. 

According to media sources, Emefiele has been instructed to immediately transfer control of his office’s operations to the deputy governor (Operations Directorate), who would serve in that capacity until the inquiry and changes are complete. 

Recall that there were many controversial policies that were introduced by the apex bank under the leadership of Mr. Emefiele. One of the policies that brought about the change of the Nigerian currency was seen by many people as an effort against the candidature of Bola Tinubu during the last general elections. 

By Ahmad Deedat Zakari

Barely seven days before the expiration of his final tenure, President Muhammadu Buhari launched the long-awaited Dangote Refinery in Lagos. The newly commissioned refinery is the first private-owned oil refinery in Nigeria. 

The President was flanked by many dignitaries from within and outside Nigeria during the unveiling. He described the refinery as a ‘game changer’ for the country’s economy. 

“This clearly makes this event a notable milestone for our economy and a game changer for the downstream petroleum product market not only in Nigeria but the entire African continent,” He said.

The accomplished businessman and owner of the refinery, Alhaji Aliko Dangote, gave the welcome remark at the unveiling ceremony.

He thanked President Muhammadu Buhari for his support and said he was his source of inspiration at times he felt like giving up. 

He also appreciated the Governor of the Central Bank of Nigeria, Godwin Emefiele, for ‘moving mountains’ in the course of the project. 

The billionaire also revealed that the first product of the $12 billion facility “will be in the market before the end of July, beginning of August this year”.

“Beyond today’s ceremony, our first goal is to ramp up production of the various products to ensure that within this year, we’re able to fully satisfy our nation’s demand for higher quality products,” he said.

The Dangote Petroleum Refinery and Petrochemical is the largest single-train refinery in the world and has a capacity of 650,0000 capacity a day.

 By Muhammadu Sabiu  

Senator Shehu Sani, a lawmaker and social critic, projected that Godwin Emefiele, the CBN governor, will be powerless after President Muhammadu Buhari leaves office. 

After Buhari leaves power on May 29, Sani, in a tweet on Saturday, compared Emefiele’s situation to a “Zebra in the hands of Tigers”. 

The tweet reads, “When Baba is gone, Emefiele will be like [a] Zebra in the hands of Tigers.” 

Recall that Bola Ahmed Tinubu, who is thought to have been badly affected by the monetary policies initiated by Godwin Emefiele, was declared the winner in last Saturday’s presidential election. 

Many believe that the CBN initiated its naira redesign policy to cripple Tinubu’s chances of winning the election, as this could not be unconnected to Senator Shehu Sani’s tweet.