Business
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A new helmsman takes over as governor of the Central Bank of Nigeria with a pledge to ensure a stable monetary policy during his tenure
| By Chinwe Okafor | Jun. 16, 2014 @ 01:00 GMT
GODWIN Emefiele, formerly managing director and chief executive officer of Zenith Bank Plc; has taken over as the new governor of the Central Bank of Nigeria, CBN, following the expiration of the controversial term of his suspended predecessor, Sanusi Lamido Sanusi, June 2. Emefiele, who takes over the affairs of the apex regulatory bank on a five-year first term, is saddled with the onerous task of keeping monetary policies in line with government’s fiscal policies. He is also expected to adopt a less controversial stance on issues in contrast to those of the highly politically vocal Sanusi.
During his screening before the Senate in March, Emefiele had pledged his commitment to monetary stability. “The core mandate of the CBN is to achieve monetary and price stability, ensure a strong exchange rate and build foreign reserves. We will ensure that we have a sound financial system in Nigeria. We will work hard to achieve macro-economic stability in the country where inflation rate will continue to come down. We will ensure that the interest rate continues to come down.
“During my tenure, whatever monetary policy decisions we take, will be those that will lead to improvement in the level of employment because employment is very crucial to national development,” Emefiele said. Bismack Rewane, chief executive officer of Financial Derivatives Limited, believes that keeping the naira exchange rate, which currently stands at N150-N160 to the US dollar, would remain a pesky knot for the new governor as such a monetary policy stance might not be sustainable for long due to the likelihood of increasing pressure on the naira in the months ahead.
While advocating a slight adjustment of the band to between N155-N165 exchange rate, he projected that possible decline in oil revenues, a minimum wage increase and upward review of the electricity price since it could not be supported at the current level, amongst other factors and their implications for price stability would necessarily compel the authorities to adjust the band.
Yvonne Mhango, a sub-Saharan Africa specialist at Renaissance Capital, projected that the new governor would have to take a serious step to devalue the mid-point of the exchange rate band to N170 to the dollar at the July meeting of the monetary policy committee meeting. According to her, it is estimated that this will lead to inflation of around 11 to 12 percent at year-end, which implies rate hikes to help preserve real rates of at least five per cent that make the carry trade attractive.
She described Emefiele as a conservative banker, pointing out that given his antecedents at Zenith Bank, Emefiele would likely maintain a firm policy environment and be inclined to tighten policy in the current environment of naira weakness. Okechukwu Unegbu, former president of Chartered Institute of Bankers of Nigeria, CIBN, said the new helmsman would need to establish an exchange rate benchmark that would support the economy and position it on the path of sustainable growth.
He advised Emefiele to ensure that he strengthens the naira through a combination of monetary instruments such that inflation and lending rates would be controlled and price stability would be achieved. Unegbu noted that the economy was still underperforming as reflected in the key performance indices of the money and capital markets and the dislocation in the economy with the attendant negative implications for the socio-economic situations of the citizenry.
Muda Yusuf, director general, Lagos Chamber of Commerce and Industry, LCCI,charged the new CBN chief to be focused on stimulating real economic growth through the adoption of appropriate monetary policies. He advised Emefiele to leverage on the recent successes recorded in the payment system by enforcing the cashless policy and also sustaining the risk management policy of the apex bank.
Until his appointment as the CBN governor, Emefiele was the group managing director, Zenith Bank Plc, a position he has held since August 2010. Previously, he was the deputy managing director of the bank, having been appointed into that position in 2001. Emefiele has 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, multilateral, conglomerates, and private banking. He also had responsibilities for direct supervision of majority of the bank’s branches in Lagos and northern Nigeria.
Emefiele has more than 26 years’ 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 on 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.
Under Emefiele’s leadership, Zenith Bank has strengthened its position as a leading financial institution in Africa, winning recognition and getting endorsement at home and abroad for giant strides in key performance areas like corporate governance, service delivery and deployment of cutting-edge ICT as well as impact in the bank’s numerous spheres of operations. In 2012, Emefiele’s visionary leadership saw Zenith Bank receiving acclaim from reputable institutions such as world finance, CFI and FTSE Global Markets that have named Zenith the Best in corporate governance, best commercial bank in Africa, and emerging global super brand respectively.”
Tags: CBN Central Bank of Nigeria Godwin Emefiele Sanusi Lamido Sanusi
