The new governor of Central Bank of Nigeria,
New CBN Gov, Emefiele, Assumes Duty Tomorrow
, will tomorrow take over the affairs of the apex regulatory bank at the start of a five-year term.
The erstwhile Managing Director of Zenith Bank Plc, assumes office following the expiration of the controversial term of the suspended CBN governor, Mallam Lamido Sanusi, whose tenure expires on June 2.
The new CBN Governor will be saddled with the onerous task of keeping monetary policy in sync with the government’s fiscal policies.
He is expected to adopt a less controversial stance on issues compared with the highly vocal Sanusi.
Analysts said the most pressing challenge the new helmsman would be contending with was determining the appropriate naira exchange rate while maintaining a robust external reserves position.
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 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 the improvement in the level of employment because employment is very crucial to national development,” Emefiele had said.
Chief Executive Officer of Financial Derivatives Limited, Bismack Rewane, had noted that keeping the naira exchange target band, which currently stood 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 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.
A sub-Saharan Africa specialist at Renaissance Capital, Yvonne Mhango, 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 per cent at year-end, which implies rate hikes to help preserve real rates of at least five per cent that make the carry trade attractive.
“Higher inflation is likely to be negative for consumers, but we expect the effect of this on Gross Domestic Product (GDP) growth to be mitigated by the positive impact of higher liquidity on the back of an increase in election-related government spending,” she said.
Describing Emefiele as a conservative banker, Mhango pointed 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.
Former Chartered Institute of Bankers of Nigeria, CIBN, President, Mazi Okechukwu Unegbu, said the new helmsman would need to establish a exchange rate benchmark that would support the economy and position it on the path of sustainable growth
He advised Emefiele to ensure the strengthening the naira through a combination of monetary instruments such that inflation and lending rates were controlled and price stability was 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.
The Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, charged the new CBN chief to be focused on stimulating real economic growth through the adoption of appropriate monetary policies.
While reflecting on some of the existing policies, Yusuf advised him 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.
Stakeholders in the finance houses are also itching for a new reform regime, particularly the downward review of the minimum capital base from the N200m minimum capital base being proposed by the CBN to about N100m.
Operators in the subsector under the umbrella body the Finance Houses Association of Nigeria, FHAN, want the new CBN boss to conclude the ongoing reforms with new regulatory guidelines that will encourage new investment inflows into the sub-sector with the attendant multiplier effects on the economy.
CHIBOK GIRLS: US CONGRESS MOBILISES UN, AU PEACEKEEPERS TO NIGERIA
The United States Congress has adopted an amendment that will enable that country give full security assistance to Nigeria and also mobilise other countries, the Africa Union and United Nations Peacekeepers against the Boko Haram sect, in the ongoing rescue operation of the schoolgirls abducted from Chibok on April 14 2014.
The U.S House of Representatives adopted the amendment by Congresswoman Sheila Jackson Lee, which establishes an important priority for the US Department of Defence, condemning Boko Haram’s crimes against humanity.
“The amendment sends a clear message to Nigeria and the international community that girls around the world have the right to be free and live without fear and should not be forced to risk their lives to get an education,” Lee noted in a statement she issued.
Lee, a senior member on the House Homeland Security Committee and the House Judiciary Committee, and co-chair of the House Congressional Children’s Caucus, issued the statement after her amendment was unanimously approved and accepted by the House of Representatives last Thursday.
Specifically, the amendment condemns Boko Haram for its crimes against humanity and its kidnapping of over 200 schoolgirls from the Government Girls Secondary School in Chibok, Borno State.
The U.S lawmaker said, “The world is outraged over the abduction of over 200 girls from their school in rural Nigeria by terrorist group Boko Haram. Boko Haram’s threat to sell the girls into slavery for $12 each is outrageous and brings new urgency to the need to stamp out modern day slavery and human trafficking in all forms.