Nigeria’s CBN Governor Godwin Emefiele has been nominated by President Buhari for a second term in office. The CBN Governor was appointed by former President Goodluck
Jonathan following the sack of Sanusi Lamido Sanusi the current Emir of Kano.
Significance – Emefiele’s appointment makes it the first time a CBN Governor will be running two terms in office since the advent of Democracy in 1999. Professor Soludo and HRH Sanusi Lamido Sanusi only spent a term each respectively.
Potential consequences – Emefiele’s appointment comes with its positives and negatives.
Positives
- Stability in the banking system as he is likely to continue with his policies.
- This also suggests banks won’t be rattled anytime soon except they perform woefully like the defunct Skye Bank
- Continuing with the CBN developmental programs which will favour farmers and targeted SMEs.
- Exchange rate stability as a strategy is likely to persist provides oil price remains flat. The CBN Governor is not ready to float the naira fully.
- Policy implementation for FinTech will continue. The next four years might be the beginning of the end of brick and mortar banking.
- Continues with the policy on the ban of forex allocation for 41 banned items. This will be good news for local industries benefitting from the bank.
Negatives
- Just as some benefit from the banning of the 41 banned items, most will suffer from it. Industries that require raw material inputs included in the ban list will have to grapple with the obvious reality.
- Importers of goods and services listed on as banned items will also continue to face the impact of lost revenues. The trade industry has been in recession since 2016
- The Nigerian Stock Market is still reeling from the foreign investor apathy towards listed stocks. This is mainly because of the distrust they have for the management of the exchange rate.
- Independence of the CBN might be further eroded during his tenure. Critics have often cited frequent interference by the executive branch on activities of the CBN.
What next: Once his nomination is confirmed, Mr Emefiele will resume his second term starting in July 2019 and serve till 2024. He would have also served at least 3 Presidents (GEJ, PMB and the winner of 2022 elections).
Good for him