The appointment of Godwin Emefiele as CBN governor in July 2014 may well have turned out to be Goodluck Jonathan’s (GEJ) most far sighted appointment ever and PDP’s ultimate plan B. In a classic move worthy of mention in a Shakespearean tragedy, GEJ may well have noted a number of important trends in July 2014. The alliance between the political North and the political South West put him on the political back foot. The only candidate that the APC could logically put up (that was capable of winning the 2015 election) was Buhari. Once he was able to convince the political South West to trust him, his victory was assured.
GEJ may also have known that Buhari is the ultimate tragic literary hero. Many a play has centered around a central character similar flaws that besets president Buhari. He is nationalistic, determined, idealistic, powerful, simple, arrogant, tyrannical, economically ignorant, inflexible, incapable of learning from past mistakes and intellectual lazy. It was these same qualities that allowed his former military colleagues to effortlessly overthrow him in August 1985. Godwin Emefiele on the other hand appears to be simple, harmless, humble, soft spoken, powerless and cunning. Nigerians are being served up a live Shakespearean play.
At the time Buhari took over from GEJ, the federal government finances had been completely ruined. The challenge was to prevent a FG revenue challenge from becoming a significant impediment to the fast growing Nigerian economy.
In the past, the Nigerian state used fiscal and monetary policies in ways that checked excesses. The CBN in 2011 adopted its policies in a manner that prevented over heating of the economy when the fiscal side of government policy was pumping a lot of money into Nigerian economy.
Shortly before the swearing in of President Buhari, the CBN had started implementing its notorious forex policy. It started to implement a crude policy of exchange control. This made many foreign investors already in Nigeria concerned that any money will be hard to extricate. JPM was so concerned, that it warned Nigeria that it faced expulsion from its index and with such expulsion will go billions of foreign currency inflows.
By September 2015, JPM had expelled Nigeria from its index. Billions of foreign exchange flowing into Nigeria dried up. Other foreign investors have stopped further investment.
Emefiele had played to President Buhari’s inherent nationalistic pride, arrogance and economic illiteracy. He had managed to convince Nigeria’s sole administrator to equate a strong Naira to the outward manifestation of Nigeria’s economic strength and independence. Buhari, before long, became the face of this disastrous policy and its chief proponent in chief. At one time, he dared anyone to convince him of the merits of “murdering the naira”.
Emefiele had been transformed to the powerless, respectful and simple CBN governor taking instructions from an incompetent powerful President.
Not done with the exchange control regime, the CBN governor then implemented a restricted imports strategy vis a vis foreign currency acquisition by the domestic manufacturing market that has now led to the unprecedented growth of unemployment.
One can only surmise that this new CBN policy was implemented to deal with rising inflation. However, Nigeria’s inflation is caused by the fall in the actual value of the Naira that has flowed into the price of imports sold in Nigeria. One can only surmise that this new CBN policy was implemented to deal with rising inflation. However, Nigeria’s inflation is caused by the fall in the actual value of the Naira that has flowed into the price of imports sold in Nigeria or goods produced in Nigeria that consists of imported materials. Nigeria’s inflation is not caused by an excessive demand relative to supply driven inflation. The medicine prescribed by the doctor cannot cure the ailment that afflicts the sick patient. The patient’s health will deteriorate further because of the lack of knowledge of the doctor.
Aware that the CBN Act of 2007 ensures that the CBN governor is independent of the FG and can only be removed by the President with the assent of the National Assembly, Emefiele has insulated his position by bribing the major power centres. Buhari is effectively stuck with a CBN governor that will facilitate his quick transition from messier to the most hated and unpopular head of state in recent memory. Mr Tinubu (seemingly worried about the popularity of the APC federal government and its effect on his hard won south west political empire) aimed his missile at the wrong person. The minister of state for petroleum is not the existential threat to this APC government. It is the CBN governor.
What an interesting irony. I have always loved Shakespeare’s works. It appears that Emefiele does too.