As the new Central Bank of Nigeria’s Governor, Godwin Emefiele, took office today, Tuesday, May 3, 2014, he commenced on the task of maintaining macro stability.
Emefiele’s appointment follows the departure of Sanusi Lamido Sanusi who was suspended by President Goodluck Jonathan in February over allegations of financial recklessness because of his allegation that oil revenue meant for the Federal Account was missing.
Going by his track record as an achiever during his tenure as the former Group Managing Director of Zenith Bank Plc, many believe that Emefiele will move the CBN to the next level. How he handles the issues that will come up in the coming months will determine the success or otherwise of his tenure.
According to Economists, pre-election and election years are usually the toughest for central bank governors all over the world. With the extra budgeting spending that arises from electioneering expenses; Emefiele is most certainly going to face the challenges of excess cash in circulation which would ultimately bring about inflation and put pressure on naira, while other monetary challenges that will pose threats to the economy will come forth.
The new governor is expected to raise the monetary policy rate which would prop up the naira and attract investors to domestic debt but hurt lending or devaluate the naira band. The devaluation, however, would put pressure on the country’s banks as it would lift principal and interest payments on Nigerian government and corporate Eurobonds. He is also expected to keep inflation within the bank’s single-digit target, despite looser fiscal policy as polls approach.
“The governor resumed today and we are just done with the official handing over,” said central bank spokesman Isaac Okorafor. Emefiele, who took over from acting governor Sarah Alade for a five-year term, will give a press conference on Thursday at 10 am, he said.
Emefiele who is 52 years of age has more than 20 years’ experience in banking. As the Managing Director of Zenith Bank, Nigeria’s second biggest bank, he built a well-capitalised institution. He is a conservative figure who appears confident in public but gives little away.