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Tinubu's 'Housecleaning': Can Emefiele Ride Out the Storm? By Femi Asu

Tinubu's 'Housecleaning': Can Emefiele Ride Out the Storm? By Femi Asu

12 June, 2023

In his inaugural speech, President Bola Tinubu said the "monetary policy needs thorough housecleaning", fuelling speculation that Godwin Emefiele would be ousted. Eleven days later, he was suspended as the governor of the Central Bank of Nigeria.

Emefiele, who was honoured with 'Commander of the Order of the Federal Republic' a day before Tinubu’s predecessor and political ally, Muhammadu Buhari, left office, is now being probed by the country’s secret police.

Picked by Jonathan, he found favour with Buhari

Emefiele took the helm at the central bank in June 2014 during the Goodluck Jonathan era. Barely a year later, the one who appointed him handed over power to Buhari, who became the first Nigerian to oust an incumbent in a presidential election.

Although appointed by the government of the main opposition party, he found favour with Buhari. He was reappointed in May 2019, becoming the first CBN governor to secure a second term since the return to civilian rule in 1999.

Emefiele kept faith with Buhari’s economic unorthodoxy. Protectionism was a key policy of his government -- over 40 imported items were banned from accessing foreign exchange. The government was disinclined to devalue the naira, leaving it artificially overvalued for years.

The Buhari government’s borrowing from the central bank repeatedly exceeded the statutory limit of five percent of the previous year’s revenues.

In December 2016, Emefiele's predecessor raised the alarm over the violation of the CBN Act. “The CBN-FGN relationship is no longer independent,” Muhammadu Sanusi II, a former Emir of Kano, said at an event in Abuja. "In fact, one could argue their relationship has become unhealthy."

The debt owed to the central bank ballooned to N23.77trn as of October last year, more than 30 times what Buhari inherited in 2015.

Emefiele under fire over naira woes

The sharp depreciation of the naira to 570 per dollar on the parallel market in September 2021 sparked calls for the sack of the CBN honcho.

Emefiele talked tough on “exchange rate manipulation” allegedly by abokiFX, a platform providing data on parallel market rates. He accused its founder of “milking the system through speculative activities on the naira”.

“For those who think they are smart and they want to continue to sabotage the efforts of the central bank in running this economy for the good of Nigerians and this government, we will make life very difficult for you. Your time has come,” he exclaimed in disgust.

Emefiele even went ahead to challenge the website’s founder and his would-be supporters to a “fight”.

He had earlier ruffled the feathers of Bureau de Change operators by stopping the weekly sale of forex to them, saying they had turned themselves into “agents that facilitate graft and corrupt activities of people who seek illicit fund flow and money laundering in Nigeria”.

●'Femi Asu, a business journo