Naira Redesign and Other Top Policies of Godwin Emefiele as CBN Governor, Experts Speak

Naira Redesign and Other Top Policies of Godwin Emefiele as CBN Governor, Experts Speak

  • The governor of the Central Bank of Nigeria, Godwin Emefiele, has embarked on a series of policies
  • The policies have received mixed reactions from Nigerians and economic analysts praising or criticising them
  • Nigerians are not sure if he performed or failed, but he has introduced several policies to judge him by

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The recent redesign of the naira by the Central Bank of Nigeria (CBN) has projected Godwin Emefiele into the limelight. Not that the former Zenith Bank Managing Director was unknown.

Emefiele mounted the saddle as CBN's top shot on March 6, 2014, under former President Goodluck Jonathan, just on the eve of the 2015 presidential election that brought President Muhammadu Buhari.

Emefiele, Naira, Buhari, policies
President Muhammadu Buhari and CBN governor, Godwin Emefiele Credit: Anadolu Agency / Contributor
Source: Getty Images

Many who thought that Buhari, who trumpeted anti-corruption, would make significant changes to Nigeria's apex bank, the CBN, by tinkering with its leadership were disappointed when he left Emefiele on the saddle.

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Many people said the Delta State-born top banker did not have enough time to prove his mettle under Jonathan, having spent just 13 months before Buhari assumed power.

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"His policies and changes at Zenith Bank were the trump cards that endeared him to those who recommended him to Jonathan," Ifeanyi Emezue, a journalist and financial reporter, said.
"So Emefiele came highly recommended. Remember, he was coming as a successor to a top banker, Sanusi Lamido Sanusi who was ousted by Jonathan for his criticisms of his government," Emezue said.

So, all eyes were on Emefiele to equal or surpass the records of his predecessors.

For the first six months of Buhari's administration, Emefiele and his CBN were the go-to people for economic and monetary policies as Buhari bid his time appointing ministers.

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Emezue described those months as the worst in Nigeria's economic history.

"That was when the trouble with the naira began. Emefiele and his CBN were joggling both monetary and economic policies. The primary job of the CBN is monetary and not economic. That was also the time Nigeria began to slip into recession because, economically speaking, Nigeria was rudderless for the first six months of Buhari's tenure," he said.

Emezue stated that the naira lost 90 per cent of its value under Emefiele's leadership.

"By design or default, naira died under him," he stated.

Emefiele's CBN introduced quite several innovations and policies.

New naira notes

On October 26, 2022, the CBN took many off guards when it announced that it would redesign the local currency. As per the law, CBN is empowered to redesign the currencies every five to eight years.

It's been over a decade since the last new note came. The N1000 note made its debut in October 2005, 17 years ago.

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The news of the banknote redesign reverberated across the country, leaving many currency hoarders and speculators scurrying to dispose of old notes, especially as the CBN gave January 31, 2023, as a deadline for the cessation of old banknotes.

The new notes were unveiled by President Muhammadu Buhari on Wednesday, November 23, 2022, amid reactions.

Anchor Borrowers Programme

The Anchor Borrowers Programme is a CBN intervention scheme and a single-digit loan designed by the Nigerian government in 2015 to boost the agricultural sector of the country's economy.

The programme is in partnership with the NIRSAL Microfinance Bank.

The scheme provides cash and kind incentives for smallholder farmers in Nigeria.

Recently, the bank complained that it had difficulty recovering loans disbursed under the scheme and embarked on a massive sweep of debtors' accounts.

Jackson Omilani, an ex-banker and economist, said the scheme almost made Nigeria self-sufficient in food production, especially rice production, but hampered by increased insecurity in the North.

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"The CBN actually meant well. Nigeria was at the cusp of food sufficiency before insecurity increased which drove farmers away from the farms, especially in the North," Omilani said.

Raising bank charges

Emefiele had been accused of being pro-establishment, allegedly churning out policies favouring his colleagues in the bank.

On several instances, his CBN has increased bank charges, especially on deposits, purportedly designed to discourage cash transactions but seen by many as done to help his colleagues in the banking industry.

Interest rate hikes

For many years, the CBN left the benchmark interest rate at 11.5 per cent. In 2014, benchmark interest rates were at 8.5 per cent and increased subsequently over the years.

Exchange Rate

Perhaps one of the hallmarks of Emefiele's reign is allegedly overseeing a catastrophic exchange rate.

The naira traded for N197 per dollar in 2015, increasing from N179 per dollar.

It has continued to cascade downwards since, peaking at some point at N900 per dollar in early November this year.

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Emezue does not believe the naira would recover to pre-Buhari era.

"For those dreaming of having the exchange rate back to N500 per dollar should brace up. It is not happening anytime soon. What Nigerians sould continue to hope for is increase standards of living to match whatever is thrown at them before this government exits power next year," Emezue said.

The struggles of the eNaira

At the height of cryptocurrency, which saw youths turning to cryptocurrencies to circumvent the increasing exchange rate, the CBN asked deposit money banks to cease operating and shut down crypto trading accounts.

On October 25, 2021, the Central Bank of Nigeria launched Africa's first Central Bank Digital Currency (CBDC).

The purpose was to lure the youths away from cryptos.

But the abysmal performance of the e-currency is so palpable that the CBN began to chase tricycle riders to adopt the scheme.

Omilani said the eNaira was hurriedly developed and did not involve more comprehensive consultation.

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"Nigerians had a lot of input to make but CBN ignored suggestions and went ahead to design it and now, I am not sure it is doing too well. Those for whom it was designed have rejected it and CBN is trying all it could to force adoption."

He said for the eNaira to succeed and survive, the CBN must give thought to the yearnings of the Nigerian youths.

"The youths are innovative. The eNaira must have a cryptocurrency feature if it must succeed and survive.

According to reports, the eNaira has been downloaded 900,000 times since September 2022.

Buhari defends Emefiele

Irrespective of his strides, Emefiele has some endorsements.

Vanguard reports that Buhari has been very defensive of Emefiele's economic policies, dismissing criticisms against him.

The President highlighted various steps his administration took to address the country's many challenges, suggesting that the government would have been worse off in terms of food inflation but for policies, such as the Anchor Borrowers Programme, which has helped to boost agricultural production.

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Emefiele's legacies would be left to posterity to judge.

Nigeria missing as 15 best-performing central bank governors in Africa are revealed reported that a new report on the performance of bank governors, the Central Banker Cards, published annually by Global Finance, ranks the central bank governors of 101 key countries and territories as well as the European Union, Eastern Caribbean Central Bank, the Bank of Central African States, and West African Central Bank states.

For the 2022 report, just three central bank governors from Africa made the top 20 global list.

Business Insider reporting said that Lesetja Kganyago of the South African Reserve Bank, Havesh Kumar Seegolam of Mauritius, and Abdelattif Jouahri, of Morocco.


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