PERSONALITY OF THE YEAR: CBN’s Godwin Emefiele Battling the forex headwinds – Vanguard

CBN’s Godwin Emefiele

Godwin Emefiele, Governor, Central Bank of Nigeria, CBN, is an accomplished banker of repute, unpopular presently, for policies considered injurious to certain vested business interests.   Some of the policies also came with pains considered necessary for sustainable economic growth. Prior to taking the helms at the CBN in mid-2014, he had spent over 26 years in commercial banking, rising to the position of Group Managing Director and Chief Executive Officer of Zenith Bank PLC, one of Nigeria’s largest banks with subsidiaries in many African countries including South Africa, as well as China and the United Kingdom.

Under Emefiele’s leadership, Zenith Bank strengthened its position as a leading financial institution in Africa, winning recognition and endorsement at home and abroad for giant strides in key performance areas like corporate governance, service delivery and deployment of cutting-edge Information and Communication Technology.

Before his banking career, he was a lecturer in Finance and Insurance in two Nigerian Universities. Mr. Emefiele holds degrees in Banking and Finance from the University of Nigeria, Nsukka, and is also an alumnus of Stanford University, Harvard and Wharton Graduate School of Business, where he took courses in Negotiation, Service Excellence, Critical Thinking, Leading Change, and Strategy.

Since becoming Governor of the CBN, Mr. Emefiele has vigorously pursued his vision of financial system stability and development financing in view of his strong belief that central banks in developing countries cannot afford to sit idly by and concentrate only on price and monetary stability, given the enormity of their development challenges.

This ideological predisposition formed the basis for this Award, in that he came to office at the apex bank when Nigeria needed a critical reset in the economic behavior and policy positions.

Few weeks into his job at CBN, the economy, being largely driven by oil exports, began to slide under the weight of oil price crash in the international market. This challenge was also coming at the end of the US Fed’s Quantitative Easing Programme, which meant reversal of capital back to USA from most developing countries such as Nigeria.

These two major international developments were complicated by several other domestic challenges on the heels of the hottest national electioneering season.

Thus, Emefiele inherited adversity. But it is in this era of adversity that we measure the quality of leadership more appropriately.

In 2015, when he was barely one year in office with the avalanche of challenges he inherited, a change of government was added to the basket of what he had to deal with, at a time when all other external sector challenges were escalating.

It was against these inclement circumstances that Emefiele began to work a tight rope of leading monetary policy efforts to deal with the spillovers. The new government had taken a very long time to settle down into fiscal policy complement of the monetary policy efforts, thereby forcing Emefiele to walk a difficult and lonely economic management path. Consequently, results of his efforts at the end of the fiscal year 2015 were obviously muted, signaling a more challenging 2016.

By mid 2016, the economy had slid into recession, inflation had escalated, capital flight had heightened, foreign reserves had declined further, while the Naira had depreciated across all market segments.

It is noteworthy that Emefiele kept his eye on the ball despite these huge distractions, which came with castigations and even threats to his personal integrity.

But how did Nigeria get to this point? The country had opened up its economy to “all-comers” and dropped all capital controls. At some point, the country had more than US$23 billion in Foreign Portfolio Investments, (FPIs), a clear “hot money” that could easily evaporate at the slightest hint of an economic slowdown, and it happened following the drop in oil price.

Recall that in September 2008, Nigeria’s foreign reserves was at a whopping US$62 billion, even after spending about US$12 billion settling external debt obligations.    Emefiele was left with barely half of that on assumption of office eight months later. What happened to the money?

Beyond the sharp drop in crude oil prices and reserves, there was also a plummeting of the CBN’s monthly foreign earnings, from as high as US$3.2 billion to current levels of as low as US$700 million monthly. Yet, the demand for foreign exchange by mostly domestic importers has risen by almost 750%.

To avoid further depletion in the reserves, the CBN, under Emefiele, took a number of countervailing actions including the prioritisation of the most critical needs for foreign exchange. In this regard, and in order of priority, it decided to provide the available but highly limited foreign exchange to meet the following needs: matured Letters of Credit from commercial banks; importation of petroleum products (another problem Emefiele inherited from a badly structured economy); importation of critical raw materials, plants, and equipment; and payments for school fees, BTA, PTA, and related expenses (yet another problem he inherited arising from poor domestic educational system).

We noted that these policies yielded some positive developments, though with some pains expected of any major bone-setting exercise.

In particular, Emefiele managed to reduce the rate of depletion in external reserves, recording, in the process, significant increases towards the end of 2016. More importantly, the reserves remained robust and is able to cover more than five months of Nigeria’s imports (Dec. 2016) as against the international benchmark of three (3) months. His policies have largely eliminated speculators and rent-seekers from the Foreign Exchange Market.

Given the scarcity of forex inflows into the CBN, and the penchant of Bureau De Changes, BDCs, to abuse the system, the CBN moved to fund the market from remittances through International Money Transfer Organizations (IMTOs) – in recognition of the enormous potential of Nigerians in Diaspora to adequately fund the forex market, a creative decision which has improved forex supply to the markets.

It is also noteworthy that following the re-introduction of the Flexible Exchange Rate System, FERS, he cleared the backlog of forex demand through a combination of spot and forward sales.

More rewardingly, domestic production of items prohibited from the forex market is picking up nationwide, thereby creating more jobs for many more Nigerians.

Emefiele has gone beyond the regular call of duty to help in addressing fiscal and other macroeconomic challenges. As part of its long-term strategy for strengthening the Nigerian economy, Emefiele established initiatives to resolve the underlying factors stoking challenges to long-term GDP growth, economic productivity, unemployment and poverty that had pervaded the economy over the past decades. Hence, he took measures to increase credit allocations to pivotal productive sectors of the economy. This is with a view to stimulating increased output in these sectors, creating jobs on a mass scale and significantly reducing import bills that mount pressure on forex.

So far, the targeted interventions have impacted on the following sectors:


Four commodities – rice, fish, sugar, and wheat – which consume about N1.3 trillion annually in import bill, are on his focus.  Specifically, Emefiele introduced  the Anchor Borrowers’ Programme, ABP, kick-started in Kebbi State has already yielded results with about one million metric tonnes of rice pumped into the Nigerian market. This represents 20 percent of total consumption and it is estimated that by the time this is fully implemented nationwide, Nigeria will not only be self-sufficient, the country will become a major global producer/exporter of rice.


In conjunction with stakeholders in the power sector, CBN, under Emefiele, established a Special Purpose Vehicle in the form of a low interest facility, to discharge existing legacy gas debts that had undermined gas supply to generating power plants in the country. The investors now have financial stand point for a take-off of sustainable improvements in investment and production in the power value chain, while rescuing the power sector from total collapse.

Micro, Small and Medium-Scale Enterprises (MSMEs)

These are recognised globally as the nucleus of sustainable growth, job creation and poverty reduction. In Nigeria, the greatest challenge confronting the 17.3 million MSMEs in operation is constrained access to affordable financing. Under Emefiele, the CBN is implementing a ¦ 220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) to provide concessionary finance to MSMEs. This has stepped up self employment generation in the economy.

Workers’  Salary/Pensions Assistance Fund

One of the critical challenges of economic growth faced by Nigeria now is weak demand occasioned by weak or absence of income amongst vast number of the population. This is also partly as a result of huge salary arrears in the public sector – clearly a fiscal policy challenge. But under Emefiele CBN has assisted more than 30 states of the federation with concessionary loans to offset salary arrears for their workers to stimulate demand and the economy. This also came along with the apex bank’s disbursement of N10 billion each to all 36 States to finance specific infrastructural development projects in their states, another economic stimulation action.

In addition, the apex bank has disbursed about N350 billion to the Federal Ministry of Finance for emergency spending that would boost the economy in the wake of the economic recession.

For these reasons  – and many more too numerous to put on paper – we, the editors of Vanguard, voted Mr Godwin Emefiele as VANGUARD PERSONALITY OF THE YEAR, 2016,  in a year that created a  dilemma for the editors in identifying  individuals  who were able to profoundly affect the lives of Nigerians (whether for good or  of  ill).

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