Emiefele may be replaced as CBN Governor in 2019
As Nigeria heads to the polls in 2019, politicians are not the only ones trying to position themselves for the highest office in the country; economists are also seeking a higher office, just a different one. The tenure of current Central Bank Governor, Godwin Emiefele will expire in mid-2019 and many economists opine that a reappointment for the CBN governor may be very unlikely.
The governor has a chance of being reappointed, but the odds are tight as the CBN has never had a governor serving more than a single tenure since 1999.
“I will say the chances are slim because historically, since we returned to democractic rule, we have not seen a CBN governor that has served two terms. All previous governors before Emiefele since 1999 have served one term, unlike the US Fed culture of reappointing Fed Chairmen; we do not have that culture here,” Omotola Abimbola, fixed income and currency research specialist at Ecobank Research said.
Asides from the tradition of a one-tenure administration, political sentiments could also make the governor lose his seat after the 2019 polls.
“I don’t see Godwin Emiefele returning as the Central Bank Governor in 2019 for political reasons. He was appointed to the role of Governor of the Central Bank of Nigeria by the erstwhile President, Goodluck Jonathan in 2014. I think if either President Buhari or Atiku wins the presidential election next year, they will likely give the role to someone close to their cabinet rather than reinstate Emiefele. That is the political norm and we don’t see it changing soon,” said Maju Eldad, lecturer in the Economics Department at the Federal University of Kashere, Gombe State.
“The CBN governor’s performance of late has not been anything close to fantastic. Inflation still remains in double digit above CBN target, we have had multiple exchange rates for over 2 years now, economic growth in the last few years have been the slowest in more than 2 decades and let’s not even discuss the MTN repatriation drama that has sent foreign investors out of the country,” Eldad added.
The reappointment of the governor could possibly make the market look favourable and attractive for the foreign investors because of the anchor of the monetary policy of the current administration.
“If reappointed, the market will be looking forward to the central bank that has made exchange rate as its preeminent anchor of monetary policy because in the past 2-3 years, the focus has been more on exchange rate stability,” Omotola added.
CBN in the past two and half years have focused more on ensuring a stable exchange rate with the creation of exchanges as well as regular interventions in the Importers & Exporters Window.
The outcome of the 2019 polls has a lot to contribute to the shape of Nigeria’s economy irrespective of Emiefele’s reappointment. Adopted fiscal policies of the post-election administration could give room to policy reforms and transformed regulatory structures.
“Depending on who wins the election and the fiscal policies in place, the monetary policies will certainly be adjusted in response to the narrative of the fiscal policies. The government in power and their policies will dictate which fiscal tools to use and the monetary policies will have to complement whatever the fiscal policies say.” said, Johnson Chukwu, founder of Cowry Asset Management Limited.
Dr. Emeka Ucheaga