CBN’s Emefiele: ‘The Nigerian situation is a challenging one’ says analyst
2020-08-04 | Since 2 Month
Nigeria’s Central Bank Governor Godwin Emefiele may have made history as the only governor to have been reappointed for a second term office since the West African nation’s return to a democratic rule, however, “he will be more remembered as the CBN governor that surrendered much of the bank’s independence and ran a monetary policy that had record negative impact on the Nigerian economy,” Tunde Ajileye, Partner, SBM Intelligence tells The Africa Report.
“Emefiele’s tenure has seen the erosion of the independence of the central bank. The bank has been shown to be funding the Nigerian budget to a degree that not only violates the Fiscal Responsibility Act but also potentially impairs its own balance sheet as an audio leaked to the press showed. Monetary policy under him has been a mix of conflicting signals and has left many stakeholders extremely befuddled many times,” says Ajileye in response to emailed questions.
The bank’s unorthodox as well as interventionist model that moves away from just ensuring price stability drew the ire of analysts who see the bank’s chief as a largely answering only to one master.
“Over the years, our experience here in Nigeria is that CBN governors have sometimes taken positions that rankled the government. But we haven’t experienced such under him. This has led to some labeling the CBN under him as the government’s piggy bank,” says Bongo Adi, Professor of Economics at Pan Atlantic University in Lagos.
According to the economics professor, “the prosocialist bent of Aso Rock appears to be backed by his monetary policy which they refer to as unconventional and find reasons in their enabling act to justify at each call. Some economists contend that the policies under him constrain the market and undermine competitiveness which further damages the economy – the same criticism against the government of the day.”