Globally, central banks (CBs) are described as the supreme monetary authority and heartbeat of the economy, saddled with the responsibility of regulating financial and macroeconomic stability. The first central bank in the world is the Swedish National banks (Sveriges Riksbank), which was established in 1668.
Since inception, central banks have taken up the central task of formulating monetary policies and reforming banking sectors to boost financial conditions and reduce vulnerability.
Basically, the CBs adopt monetary policy instruments such as money supply and interest, targeted at price stability (inflation) and the reduction of unemployment in any economy. Unlike the U.S Federal Reserve which was established in 1913, the Central Bank of Nigeria (CBN) was established by the CBN Act of 1958 and swung into full operation on the 1st of July, 1959.
CBN’s Governors and five-year tenure – Specifically, the regulatory objectives of the CBN include maintaining external reserves of the country, promoting monetary stability, sound financial environment, and acting as a banker of last resort and financial adviser to the Federal Government.
Since the establishment of CBN, a total of eleven (11) Governors have been at the helm of affairs of the institution. Note that each of the CBN Governors introduced their unique policy reforms and measures. However, apart from Alhaji Abdulkadir Ahmed, most of the other CBN Governors spent only 5 years (or less) single tenure in office.
The first CBN Governor was Roy Pentelow Fenton (1958 – 1963). Other CBN Governors that came after him include:
- Alhaji Aliyu Mai-Bornu (1963 – 1967)
- Dr. Clement Nyong Isong (1972 – 1975)
- Mallam Adamu Ciroma (1975 – 1977)
- Mr. O. Ola. Vincent (1977 – 1982)
- Alhaji Abdulkadir Ahmed (1982 – 1993)
- Dr. Paul Agbai Ogwuma (1993-1999)
- Chief (Dr.) Joseph Oladele Sanusi (1999 – 2004)
- Prof. Chukwuma C. Soludo, (2004 – 2009)
- Mallam Sanusi Lamido Sanusi, (2009 – 2014)
- Mr. Godwin Emefiele, (2014 – To Date)
From Soludo to Emefiele, how the economy has performed – The news about the reappointment of the current CBN Governor, Godwin Emefiele, has taken Nigerians by surprise, amidst earlier reports of his possible replacement with another potential candidate. While some Nigerians regarded the news as a good move from the Presidency, others are sceptical of Emefiele’s reappointment because they’re not quite impressed with his first tenure in office.
Note that this will be the first time in many decades that a CBN Governor will be returned to serve another five years.
As earlier stated, most CBN Governors in the past typically spent a single tenure of 5 years or less. This is why many people did not see Emefiele returning for a second term.
To join the debate, a cursory look at the performance of the most recent CBN Governors became extremely important.
Prof. Chukwuma C. Soludo (May 2004 – May 2009) – The most strategic reform under Soludo’s era as the CBN Governor was the banking sector reform in 2004. Upon assumption of office, Soludo pushed for the recapitalisation of commercial banks from a minimum capital base of N2bn to N25bn.
Analysis of the data obtained from the CBN shows that the Nigerian economy grew an average of 6.46% in 4 years under the era of Soludo. This shows that the Nigerian economy recorded accelerated growth under the Soludo’s era. Specifically, 4 years average inflation stood at 11.23%, while the exchange rate of the naira was an average of N126.30 per dollar for nearly 4 years.
Furthermore, the 4 years average of monetary policy rate (MPR) under Soludo was 11.87%, with an average lending rate of 19.29%.
However, the Soludo’s tenure ended with a reported Northern Oligarchy putting pressure on the then President Umaru Musa Yar’Adua to install someone from the North as CBN Governor. Sources confirmed then that the North complained of being deprived of CBN‘s exalted position. Consequently, Sanusi Lamido replaced Soludo.
HRH Sanusi Lamido Sanusi (2009 – 2014) – The former Governor inherited Soludo’s banking sector reforms and further rejigged the existing banking structure and entire financial system in the country. Some highlights of Lamido’s era are listed below:
- The economy grew by a 4 year average of 6.05%
- Inflation was on a 4 years average of 11.04%
- Exchange in 4 years was an average of 154.74/$
- 4 years average inflation stood at 9.44%
- Highest MPC was 12%
- Average 4 years MPC was 12%
- Average 4 years lending rate was 9.44%
- Savings rate 4 years average was 2.12
However, former President Goodluck Jonathan controversially sacked Sanusi and replaced him with the current CBN Governor, Godwin Emefiele.
Godwin Emefiele, (2014 – To Date) – By law, Emefiele’s appointment is meant to expire next month. However, the announcement of his reappointment makes it the first time a CBN Governor will be running two terms in office since the advent of Democracy in 1999. Earlier today, Nairametrics highlighted the positive and negative effects of Emefiele’s reappointment.
Below are the highlights of the performance of the Nigerian economy under Emefiele’s watch:
- The economy grew at a 4 year average of 0.95%
- Inflation was a 4 year average of 12.68%
- The exchange rate was a 4 years average of 264.66/$
- MPC was an average of 12.82%
- Highest MPC was 14%
- Savings rate was an average of 3.38%
- Lending rate in 4 years average 12.82%
In the meantime, reactions have continued to trail Emefiele’s reappointment. Whether this is a good or bad move by the Presidency, the Nigerian economy might just get what it has bargained for.
NNPC opens bid for repairs of pipelines and depots on a finance and operate basis
The project is expected to be operated on a public-private partnership basis.
The Nigerian National Petroleum Corporation (NNPC) declared open on Tuesday, August 11, bids by interested private investors to repair the pipelines and depots that are serving the refineries.
These pipelines, built almost 4 decades ago, are very critical in the successful movement of crude oil to the country’s 3 refinery complexes located in Port Harcourt, Kaduna and Warri, and the subsequent movement of the finished petroleum products to the consumers.
The pipelines, which according to NNPC are in dire need of comprehensive repairs, have experienced years of incessant theft and vandalism as well as ageing.
This project is expected to be operated on a public-private partnership basis as the bidders are expected to finance and execute the project, then operate for an agreed number of years before transferring back to the NNPC. In other words, the bidders for the extensive repairs of these pipelines would have to finance them independently and operate for a defined period in order to recover their investment costs with throughput tariffs.
It must be noted that this model is similar to the one that had been in place by the state oil giant for the refineries. The NNPC had also announced plans to get private investors to invest in the repair of the 3 refineries on a repair and operate basis, as they do not want to be involved in the management of these refineries.
The NNPC Group Managing Director, Mele Kyari, had said that the ultimate plan for these refineries was to allow it to run on the LNG model, where the shareholders would be free to decide on the fate of these refineries going forward.
The refineries, which have only run sporadically, were shut down by NNPC earlier this year while awaiting repairs and upgrade. These 2 projects are expected to be handled separately according to information made available on Tuesday.
In addition, the new pipelines would need intrusion detection systems, as well as deep burial, to stop theft or vandalism. The deadline for the submission of these bids is due by September 18.
WTO Job: Okonjo-Iweala reveals how to resolve the rift between US and China
Mrs Iweala revealed how she hopes to resolve the rift between the United States of America and China.
As the jostle for the top job at the World Trade Organization (WTO) becomes more intense, the Nigerian candidate, Ngozi Okonjo-Iweala, has disclosed some of her plans for the institution. The former Nigerian Finance Minister recently had an exclusive interview with CNBC Africa.
Speaking during the interview, Mrs Iweala revealed how she hopes to resolve the rift between the United States of America and China, the 2 biggest economies in the world, especially as regards trade issues. She also noted that part of her vision is to build a trade institution where there is greater trust among its members. She also stressed that the WTO, at this critical time, is needed to ensure that trade and global markets remain open.
On healing the rift between the US and China, Okonjo-Iweala admitted that it is going to be challenging and not be easy. She said:
“Well this is not going to be easy, if it was easy, it could have been done a long time since. So it would be very challenging but it is not an impossible job. It is very clear that both the US and China have been helped and benefitted from the multilateral trading system in the past. Hundreds of millions have been lifted out of poverty. They have experienced shared prosperity in the economies and their countries.’’
The Nigerian candidate pointed out that it is important to remind the US and China of this shared prosperity. She then disclosed that she would listen to both countries to find out what really are the issues causing distrust among them. She said that she will not want to be involved in the larger political problems, but will rather separate the trade issues and focus on them and build this trust.
Going further on how to settle their rift, Okonjo-Iweala said, “You need to begin to find areas where there can be confidence-building and trade. Building trust is not talking about it, you have to have areas where both can work together and agree and we have a golden opportunity in the fisheries subsidies negotiations that are going on now because the US is a party to it, China is a party, the EU, all other members.’’
“It is a multilateral negotiation, so if they can sit around the table with others to negotiate this and have a successful outcome, that is one thing that will be shared in common between the 2. So that will begin to build confidence. Then reaching out both in the US and in China to talk to the policymakers, go where the decisions are made, talk to congress also in the US and begin to show the benefits of the system again.’’
She also said they will look at reasons why they need to work together because their rift may be causing negative externalities for other members. She is of the opinion that exposing all of these, working with them, and listening carefully will begin to build confidence.
She believes that while achieving this will be difficult, focusing seriously on trade issues can create room for a breakthrough.
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US hands over 200 ventilators to Nigeria
The US Ambassador to Nigeria said USAID and Nigeria will work very closely over the next couple of weeks.
The United States of America, on Tuesday, August 11th, handed over some 200 ventilators to the Federal Government of Nigeria. This was disclosed by the Federal Ministry of Health via its Twitter handle, following the handover ceremony in Abuja.
The US Ambassador to Nigeria, Ambassador Mary Beth Leonard, at the handover event, explained that the ventilators are compact & portable & can be easily mobilized to reach those patients with the most severe symptoms of COVID-19.
The US Ambassador to #Nigeria Her Excellency Ambassador Mary Beth Leonard at the handover event stated that "the 200 ventilators being transferred today are compact & portable & can be easily mobilized to reach those patients with the most severe symptoms of #COVID19". pic.twitter.com/4nSgYVoEHk
— Federal Ministry of Health, NIGERIA (@Fmohnigeria) August 11, 2020
Speaking during the handover ceremony, the Ambassador said, “Their arrival fulfills the commitment discussed between US and President Muhammadu Buhari earlier this year. Our support includes; training on the use & maintenance of this equipment, ensuring that the ventilators can address other respiratory illnesses in the years beyond.”
According to her, the United States Agency for International Development (USAID) and Nigeria will work very closely and energetically over the next couple of weeks, with the Presidential Taskforce on COVID-19, to bring these ventilators across each of Nigeria’s states & the Federal Capital Territory.
“The United States has been pivotal in supporting Nigeria’s membership in the ‘Every Breath Counts’ Coalition. Nigeria is now one of 2 countries in Africa to have an “oxygen roadmap” that seeks to fight against pneumonia, hypoxemia, & now COVID-19,” she stated. She then added that as the U.S. Ambassador to Nigeria, she remains proud of the strong friendship between the two countries.
The Backstory: Last April, Nairametrics had reported when the Minister of Information, Lai Mohammed, said that “President Donald Trump assured that the United States stands in solidarity with Nigeria in this difficult time and promised to send ventilators to support the country in its fight against the pandemic.”