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Mixed Reactions as Buhari Nominates Emefiele as CBN Gov

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Godwin Emefiele CBN - Investors King
  • Mixed Reactions as Buhari Nominates Emefiele as CBN Gov

Mixed reactions have greeted the reappointment of the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele.

While some experts said the development was good for the banking sector, monetary policy and economic stability, others thought otherwise.

President Muhammadu Buhari on Thursday wrote to the Senate to approve Emefiele’s reappointment as the CBN governor.

The President, in his letter to the Senate, sought legislative approval of a second tenure for Emefiele, whose current tenure expires on June 2, 2019.

The President of the Senate, Bukola Saraki, read Buhari’s letter to members at the plenary on Thursday.

The Managing Director and Chief Executive Officer, Polaris Bank, Tokunbo Abiru, said, “The re-appointment of the CBN governor for another term of five years is a positive development for our economy.

“The economic outlook remains positive as this adds fillip to the continuity of current macro-economic policies initiated by Emefiele. The positive interventions in the agriculture, real sector and foreign exchange stability give confidence that the economy will continue to grow.”

The Chairman, Chartered Institute of Bankers of Nigeria, Abuja Chapter, Prof.Uche Uwaleke, described Emefiele’s appointment as a positive development for the Nigerian economy, saying stakeholders in the economy would have confidence in the consistency of the monetary policy.

He said, “Emefiele’s appointment is a good omen for the capital market. It is one development that speaks to policy consistency and will further consolidate macroeconomic stability, especially with respect to exchange rate and inflation.

“Investors, both domestic and foreign, can have some degree of confidence in the direction of monetary policy, which is positive for the capital market.

“One thing is now certain: That the interventions by the CBN in critical sectors of the economy, especially agriculture and non-agric based SMEs will continue.

“These will rub off positively on economic recovery efforts, especially now that the CBN under Emefiele has signalled an accommodative monetary policy stance. It is equally positive for financial systems stability. So, I expect a positive reaction.”

The Registrar, Institute of Finance and Control of Nigeria, Mr Godwin Eohoi, said as one of the major actors who worked towards taking Nigeria out of recession, the apex bank boss understood what would be needed to consolidate the growth trajectory.

He also said there was a need for the apex bank boss to ensure the reduction of interest rate is to make the cost of funds cheaper for businesses.

He said, “There is a need for the intensification and effective monitoring of the interventions, in particular, the Anchor Borrower Programme.

“Emefiele should also focus on ensuring increased access to credit by SMEs and generally fostering a low-interest rate environment with the support of fiscal authorities,

“He should focus more on intervention programmes in the agricultural sector, textile and other economic stimulating and job creation sectors.”

A former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, said, “It is a good development because, given the way he has worked for five years, I think he is a competent man. He has made sure that he has so far stabilised the exchange rate; he has managed the monetary authority very well given the kind of very difficult economy we have.

“I think he has done very well. He performed above average. I think it is a good thing to give him a second chance.”

The Chairman, TAF, Debo Ajayi, who is also an economist, said he had not really considered the governor to have performed well.

He also described some of the actions of the CBN as confusing because he got involved in fiscal policies instead of focusing on monetary policies, which was his key role.

Ajayi said, “Maybe things could have been worse than it actually is but also, I really do not see the CBN managing the economy very well, and yet, the exchange rate seems to have stabilised, but it is still not where it ought to be in terms of the valuation of the naira.

“So, I have not seen any major initiative from the CBN, but evidently, his boss may be looking at it from an angle we are not looking at it from that is making him to recommend him. However, from this side, I don’t see the governor to have done an exceptional job for which he is being recommended for another five years.

“But I do commend them from time to time for some of the initiatives. For instance, the recent one on access to credit in the creative industry is a fantastic one, better late than never. We see some initiatives sometimes like in the area of agriculture, but we have not seen these translate to tangible impact on the masses.”

A professor of Economics at the Olabisi Onabanjo University, Ago Iwoye, Sheriffdeen Tella, said President Muhammadu Buhari re-appointed Emefiele because he felt that he had been able to maintain stable exchange rate and ensured that the inflation rate did not go haywire.

The don, who, however, expressed reservations about the CBN’s direct intervention in the agricultural and the real sectors, added that Emefiele must have earned his re-appointment having been able to help the Buhari’s administration to stabilise the nation’s monetary policy, as it had envisaged it to be.

He said, “I think the President re-appointed him because he is happy with what he has done in the monetary sector. He has stabilised the foreign exchange rate and managed the inflation rate. These must have fallen in line with the President’s policy, but I don’t believe the CBN should be directly involved in giving loans to farmers and those in the real sector of the economy.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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