Some level of stability before introduction of new changes in the financial services sector is what bankers, analysts and economists expect from Godwin Emiefele, who will next week assume office as the new Central Bank of Nigeria (CBN) governor. They also want continuity in the implementation of reforms, independence of the CBN, among others.
“I think what I would say to him, is to take a good look at what his predecessor in the office has done and take the good once. What I would say about the outgoing governor is that he has introduced sound risk management practices in the system. I think he has brought in some level of discipline in the system, so my advice to him is that he should stick to that, he should give some sense of stability to the system. We have seen a lot of policy summersault under the outgoing governor, maybe he should try to let things stabilise a bit before he starts introducing a lot of changes,” a bankers, who spoke under anonymity, said.
His predecessor, Sanusi Lamido Sanusi’s policies have been very successful in spurring increased lending to the real sector, catalysing privatisation of the power sector by developing banks’ capacity to lend to the sector and keeping inflation and exchange rate under control. Most importantly, by averting a long drawn out crisis with the intervention in 2009, the creation of Asset Management Corporation of Nigeria (AMCON) and introduction of improved governance policies and sustainability principles, the banking industry is much healthier and depositors funds are safer, Ladi Balogun, CEO of First City Monument Bank (FCMB) plc, and Chukwuka Monye, managing partner, Ciuci Consulting, noted.
According to Balogun, for the first time in decades, the stability has allowed businesses to plan and invest large amounts in Nigeria, and we are seeing less capital flight and more local investment in real sector and job creation.
“For these gains to be sustained post Sanusi, we need continuity. We need the continued independence of the CBN. Hence, much will depend on the choice of his successor,” he said.
Monye said continuity in the implementation of such banking reforms would further strengthened the apex bank’s financial intermediation processes, and improve the interventions of both the central and commercial banks in relevant and critical sectors of the economy.
Emefiele, who has been a banker with 26 years of experience, became the managing director of Zenith Bank in August 2010, after serving as deputy managing director from 2001.
After his confirmation as CBN governor, Emefiele unfolded his vision for the apex bank, saying: “We would work very hard to ensure that we achieve macro-economic stability where inflation would continue to come down, where interest rate shall be seen to continue to come down. And where we would as much as possible continue to maintain strong exchange rate for the country and a strong foreign reserve.”
Nothando Ndebele, analyst at Renaissance Capital (Rencap), who described him as very conservative, believes he is likely to maintain a firm policy environment and would be inclined to tighten policy in the current environment of naira weakness.
The CBN governor designate had indicated that the CBN’s exchange rate policy was correct and that a devaluation of the naira would be devastating for the import-dependent economy, a development analysts regard as a positive as he will not depart from the CBN’s $/N stability stance.
He had also promised to take measures to support the naira that had remained under pressure for quite sometime now, while also indicating that the CBN’s exchange rate policy was correct.
HOPE MOSES-ASHIKE
