Monthly Archives: May 2022

Jackson Ugbechieappraises the interventions of the Central Bank of Nigeria under Godwin Emefiele, arguing that he would be remembered as one who fought to preserve today to protect the future

As Governor of Central Bank of Nigeria (CBN), the mandate of Mr. Godwin Emefiele is clear: ensure monetary and price stability, maintain and manage external reserves, provide economic and financial advice to the Federal Government and promote a healthy financial system in Nigeria. These parameters are central to the existence of Reserve Banks (Central Banks) across the world.

In some countries, some central bank chiefs functioned during periods of plenty and economic buoyancy. Some are appointed during periods of economic drought. Some reserve bank CEOs last longer on the job than others. In some cases, their stay is determined by political decisions, usually change in government.

Alan Greenspan, a former United States Federal Reserve Chair, for instance, had a streak of longevity on the job overseeing the America Federal Reserve. An economist, he served for a record five terms as the 13th chair of the Federal Reserve of the US from 1987 to 2006. Appointed by President Ronald Reagan, a Republican, he got further reappointments by three succeeding US Presidents, handing him the historical record of working with four different US Presidents, both Republicans and Democrats.

Over all, he was regarded as one of the best Federal Reserve Chairs in US annals. But this was not because the US economy experienced boom all through his 19 years reign at the US regulatory bank. Never! There were moments of drought and storms. His first baptism of fire was the October 1987 stock market crash which shook not just the US market but the global bourse. Here, he showed rare resilience and was able to ensure liquidity in the markets.

During his 19-year tenure, the US economy experienced two recessions, both with dire socio-economic consequences. He was also confronted with the Asian financial crisis of 1997 which echoed through Wall Street and by the law of resonance impacted on the US economy. Add to this, the September 11, 2001, terrorist attacks on the Twin Towers in US in which over 3,000 people died. Now known as 9/11, that terror attack struck a deadly blow to the heart of US economy.

Again, Greenspan and his team were able to steady the ship. Many credit him with having a reputation for being strongly anti-inflation, and more at home with controlling prices than focusing on promoting full employment. Yet, in spite of the many storms that signposted his tenure, hes still largely regarded as overseeing the longest official economic expansion in US history.

Emefieles tenure as CBN governor in more ways than one mirrors that of Greenspan. Now in his 8th year, Emefiele was appointed in June 2014 by President Goodluck Jonathan of the Peoples Democratic Party (PDP). He was reappointed in 2019 by President Muhammadu Buhari of the All Progressives Congress (APC), putting him in the exclusive club of being appointed by two different Nigerian Presidents both of different political parties in a democracy. And just like Greenspan was confronted with economic storms shortly after his appointment, Emefiele suffered similar fate. .

Barely one year after his 2014 appointment, global oil prices nosed south. Nigerian economy is sustained by earnings from crude oil. Indeed, the annual budget is pegged on the unit price of oil barrels in the international market. It was therefore a case of economic Golgotha for the nation by 2015 and onwards when crude oil price sustained a downward spiral. During his tenure, Emefiele has managed economic recessions and on each occasion, he has had to bend over backwards to spring the nations economy out of the brinks.

Managing federal reserves especially in seasons of socio-economic challenges is usually problematic. Twice when American economy relapsed into recession and even when it was upended by capital market collapse, Americans did not demand for the resignation of Greenspan. They understood that he was not the cause of the poor run of the economy. They knew he could not have orchestrated the attendant job losses and unemployment. They did not occupy the office of the Federal Reserve in manic rage.

This is why many analysts and watchers of the Nigerian economy frown at recent and sustained calls by some groups for Emefiele to resign. His critics attribute the nations lean economy to Emefiele. This theory would have made sense if it was Emefiele that caused the rupture of the bubble called crude oil especially when he was not in a position to determine or fix the price of crude oil in the international market.

Emefiele was not responsible for the moribund Nigerian refineries. He was not responsible for the primitive inclination to greed exhibited by the governors who kicked vehemently against saving for the rainy day during the oil price boom of yesteryears; neither should be blamed for the inclement business environment in Nigeria where manufacturers had to provide their own electricity and worry about the movement of their goods and services because public transport is in terribly bad shape.

The list of the many woes that make Nigeria different from many other nations are many. And Emefiele did not create these woes. They have been of old including the lavish lifestyle of Nigerians, including top public officers turning a section of their apartments into vaults for warehousing forex, including the penchant of Nigerians to consume and patronise only imported products. Within the past four decades, Nigerian economy has depended solely on the export of one product: crude oil. Even refineries built to refine petroleum products for local consumption were neglected and gradually but steadily, they withered from percentage production to zero production.

The refineries are today gigantic carcasses. And its not Emefiele that is responsible for the stealing of Nigerias crude oil. Those who should know say about 80 percent of the nations crude is stolen. Stealing of Nigerias crude between the point of production in the deep waters and the point of discharge predates the arrival of Emefiele at CBN. Besides, its not CBN that oversees the sale of oil. Relevant agencies within the nations oil and gas sector do. Its therefore an unkind cut to blame Emefiele for the dipping fortunes of the economy.

To properly situate Emefieles place in the nations monetary and price stabilization history, its imperative to interrogate his actions and inactions within the context of global economic indices in the last seven years. His arrival at CBN was followed by global economic headwinds especially the crash in price of crude oil which represents about 95 per cent of Nigerias export revenue. This triggered a major shock for the Nigerian economy, leading to a 13-month recession in 2016. In comparison, the average price of crude oil from 2010 to 2014 was over $100/barrel but it crashed to as low as $30 / barrel with production cost of $25/barrel.

Despite these storms, Emefieles deft management of the monetary policies helped to support governments at all levels including executing capital projects and running overhead costs. When you consider that many oil producers like Kuwait, Russia, Angola and Brunei had longer lasting recessions of between of 20 60 months with worse socio-economic outcomes, Nigerians would appreciate the magic of Emefiele.

Even in the face of the 2020 Covid-19 pandemic with its attendant lockdown which plunged global economies to recession, Emefiele was able to mitigate the damage in a manner that made Nigeria economy perform better than the economies of some western nations. Countries like the USA had GDP falling in 2020 by -31% in Q2, UK by -19.4% in Q2, EU by -14.1% in Q2 and Nigeria by -6.1% in Q2.

It bears restating that Covid-19 brought out the best in Emefiele as CBN reeled out the following measures to absorb the pandemic shock: N100 billion health sector credit facility for operators in the sector. Nigeria now has two world-class cancer centres in Lagos and medical tourism has significantly reduced.

A one-year extension of a moratorium on principal repayments for CBN intervention facilities;

The reduction of the interest rate on intervention loans from 9 percent to 5 percent;

Creation of N400 billion target credit facility for affected households and small and medium enterprises;

Granting regulatory forbearance to banks to restructure terms of facilities in affected sectors;

Improving forex supply to the CBN by directing oil companies and oil servicing companies to sell forex to the CBN rather than the Nigerian National Petroleum Company;

Additional NGN100 billion intervention fund in healthcare loans to pharmaceutical companies and

healthcare practitioners intending to expand/build capacity;

N1 trillion in loans to boost local manufacturing and production across critical sectors; among others.

CBN under Emefiele introduced several initiatives to reflate the economy chief of which is the Anchor Borrowers Programme (ABP) which returned the country to her first love: Agriculture.

The ABP was inaugurated in 2015 targeting commercial production of agricultural commodities including rice, maize, wheat and other cereals, cassava, potato and yam. Others include oil palm, tomato, cocoa, rubber, ginger, fish, poultry, other livestock and other commodities.

Besides the ABP, other such policy initiatives by CBN include the Agriculture Credit Guarantee Scheme (ACGS), Commercial Agriculture Credit Scheme, Agriculture Support Scheme, Nigerian Incentive-Based Risk Sharing in Agricultural Lending Programme (NISRAL) and Interest Draw-back Programme.

On the impact of these initiatives, Emefiele said: Our medium-term goal is to fast-track growth above historic average. Economic activities may reach pre-pandemic levels if the resilience of non-oil activities (especially agriculture and manufacturing sectors) are given continued impetus.

Emefiele, to his credit, has tinkered with all manner of policies to save the naira. He has applied safety measures including banning the funding of the importation of some items. All of this is to build a buffer around the naira. But this seems to infuriate some persons who prefer a free floating of the local currency.

Emefiele, more than any CBN governor, has defended the naira just to protect the future of Nigeria. He has shown courage, dared the forex grabbers and frustrated the smugglers. Above all, he has returned the nation to agriculture such that locally produced agricultural produce now form a huge part of our menu and have become a greater part of the raw materials for the nations primary sector.

*Ugbechie,a public policy analyst, writes from Abuja.

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Emefiele at CBN: Preserving Today, Protecting the future - THISDAY Newspapers

2 dead, 23 rescued as 3-storey building collapses in Lagos

The National Emergency Management Agency has confirmed the recovery of two dead bodies and rescue of 23 persons from Ebute Metta three-storey building collapse.

The Zonal Coordinator Southwest, NEMA, Mr Ibrahim Farinloye, disclosed this to the News Agency of Nigeria (NAN) on Monday in Lagos.

Farinloye said the recovered bodies were those of a mother and her child, while the rescued persons included seven children and 16 adults.

Nine of those rescued alive have been treated and discharged.

They returned to the scene, but have been taken away for proper custody while psycho-social and post trauma counselling are being arranged for them by the Nigerian Red Cross, Farinloye said.

NAN reports that a three-Storey building collapsed at 24 Ibadan Str, Herbert Macaulay Way, Onyigbo on Sunday at about 10.56p.m.

However, rescue operations were still ongoing at the site.

UN Secretary-General Antnio Guterres has highlighted the impact of the Ukraine war on Africa, saying the crisis is aggravating a triple food, energy and financial crisis across the continent.

The UN correspondent of the News Agency of Nigeria (NAN) reports that Guterres began a Ramadan solidarity visit to three West African countries, Nigeria, Senegal and Niger on Saturday.

He is expected to be in Nigeria on Tuesday.

While in Dakar, the capital of Senegal on his first visit to the continent, Guterres said: when discussing the socio-economic situation, it is impossible not to mention the war in Ukraine and its impact on Africa.

The UN chief made the remarks after meeting President Macky Sall of Senegal, who said that the war in Ukraine was a human tragedy which could have a dramatic impact on economies, in particular, those of developing countries.

The conflict in Ukraine is driving up global food and fuel prices; senior UN officials are concerned that rising costs will push more people into hunger.

It could also lead to political instability and social unrest in some parts of Africa, where food prices have increased by a third since 2021.

Before the Russian invasion began in February, the combination of climate change, conflict and the COVID-19 pandemic was already impacting the socio-economic situation in Africa, especially in the Sahel region which includes Senegal.

Guterres and Sall had toured a new hi-tech vaccine production facility, currently being built by the Institut Pasteur in Dakar.

When completed, it will be able to produce a range of vaccines, including Pfizer-BioNTech, one of the most widely used immunisations against COVID-19.

It will also be able to manufacture experimental vaccines against malaria and tuberculosis.

At the end of World Immunisation Week, Guterres said it was necessary to build true vaccine equity across the world adding that it was unacceptable that close to 80 per cent of Africans were not vaccinated against COVID-19; a situation he called a moral failure.

Sall had called for pharmaceutical sovereignty by supporting the emergence of an African pharmaceutical industry capable of meeting basic needs and coping with pandemics.

As part of the COVID-19 recovery plan, Senegal is strengthening its drugs manufacturing sector.

Its expected that the vaccination facility will produce at least 50 per cent of the countrys needs.

Guterres added that the worlds wealthiest countries and pharmaceutical companies should accelerate the donation of vaccines and invest in local production, of the type seen at Institut Pasteur facility.

Addressing reporters in Dakar, Guterres said we must ensure a steady flow of food and energy in open markets, removing all unnecessary export restrictions.

He added that countries must resist the temptation to hoard and instead release strategic stocks of energy.

The UN estimates that a quarter of a billion people could be pushed into extreme poverty in 2022, caused by the consequences of the conflict in Ukraine.

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As a way to provide relief against rising food prices and other commodities, the government of Kenya has raised workers minimum wages by 12 percent.

President Uhuru Kenyatta said this in his recent national broadcast to mark International Labour Day, promising that the increase in the minimum wages of workers by 12 percent would be effective. A raise he believes will be effective immediately and would help address the current pressure that the rise in food prices is having on workers incomes.

There is a compelling case to review the minimum wages so as to cushion our workers against further erosion of their purchasing power, while also guaranteeing the competitiveness of our economy, he said.

With most African countries struggling to cope with rising food and fuel prices, the government saw a need to help cushion the impact of rising inflation on the income of ordinary Kenyans. Inflation in Kenya is expected to rise much higher following the impact the Ukraine-Russia war is having on the global economy.

The government of Zimbabwe has announced that it will soon introduce a series of measures to stop the rapid devaluation of the local currency.

President Emmerson Mnangagwa this promise recently in a recent edition of the state-run Sunday Mail.

De-dollarization will be managed carefully to avert disruptions, the president said. This government is determined to continue with a tight fiscal policy to maintain the current surplus.

The countrys local currency currently trades at an official rate of Z$159.34 to the U.S. dollar. However, the gap widens at the parallel market where it exchanges for as much as Z$400 to the US dollar.

Mnangagwa said that his team of skilled professionals were working hard to analyse and review the impact of the volatility of the local currency following last weeks exchange rate turbulence.

Economies which earn far less than us by way of exports; import more than us; have larger a gross domestic product, requiring more imports; and with bigger populations are enjoying a more stable currency than we do, he said.

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The Nigerian workers and indeed the citizens have constantly bemoaned misguided policies and poor leadership that manifested in high cost of living, delay in payment of salaries, non-payment of gratuities, pensions among others.

Labour leaders and activists are sometimes victimised for questioning perceived unfavourable policies and increasing refusal by government to honour and implement collective bargaining agreements.

In the quest to reinvent its known tradition of holding government at all levels accountable and brainstorm about the status of Labour Party, the Nigeria Labour Congress (NLC), recently convened a political conference.

The 2022 Workers Political Conference is entitled Commitment to National Emancipation and Development through Effective Political Engagement by Workers.

NLC president, Mr Ayuba Wabba, who spoke, stressed the need for restructuring of the country that would bring good governance, sustainable development and social justice as the country approaches the 2023 general elections and beyond.

Wabba said there was no better place to get patriotic politicians than from the working class and professional groups who have excelled in their fields of callings.

According to him, the conference seeks to set the labour agenda as a guide to affiliates and workers for engagement with Nigerias political class at federal, state, local government and ward levels.

With 2023 in view, there is a lot of politicking, intrigues and subterfuge in the political space. Every indication shows that the polity is once again being over-heated.

Sadly, as it has become norm with our cycle of broken politics, the polity is not being heated with questions and answers on how the current political mandate has been used by political office holders.

The polity is not being over-heated with concerns on how the current ruling elite have honoured the socio-economic rights of Nigerians in Chapter two of the 1999 Constitution.

The polity is not being over-heated with new ideas of how politicians can meet the expectations of Nigerians who want constant power, motorable roads, adequate security and living wages that will offer workers a chance at decent living.

The near absence and acute deficit of serious engagements with these existential political concerns have provided the context for this conference, he said.

He, however, said that workers determination in the run up to the 2023 elections was that professional politicians must not be allowed to evade critical questions of national development.

According to him, this is why we have developed a Workers Charter of Demands that prioritises equity, fairness and social justice.

Our Charter of Demands asks for free and quality education to tertiary levels for every Nigerian child. Our Charter of Demands insists that every Nigerian should access free and quality healthcare from cradle to grave.

Our Charter of Demands makes the argument for the kind of restructuring that brings sustainable development to real Nigerians currently struggling with the crumbs, he said.

He also said the demand posits that politicians should no longer be allowed to send their kids to schools abroad or treat their sicknesses in foreign hospitals, while the poor are trapped in endless strike and poor medical facilities.

He also demanded for the promotion of decent work conditions for workers including equal pay for work of equal value, training, predictable promotion and affordable housing close to workers places of work, he said.

Wabba said the demand also called for prompt payment of pension and other retirement benefits and the protection of all trade union rights, among others.

Our Charter of Demands is a pact of emancipation for Nigerian workers and people. It is our duty to put it at the front burner of 2023 politics.

We can make this happen by mobilising every worker in Nigeria to get their Permanent Voters Card (PVC) ready.

According to him, the next step is to engage politically, we must be ready to engage political parties especially Workers Political Party and progressive political interests across the country.

Wabba said this would ensure that a significant number of candidates who would vie for elective positions in 2023 subscribe to the provisions of the charter.

Prof Attahiru Jega, former chairman, Independent National Electoral Commission (INEC), who also spoke said that Nigeria was at crossroads, as the country prepares for the 2023 general elections.

According to him, Nigerian citizens and the working people can either continue to play the ostrich on the current trajectory of reckless, senseless, visionless journey towards democratic and socio-economic development.

It is time to wake up, rise and join hands in solidarity for struggles and active engagement in the political process, towards national emancipation from a devilish alliance of exploiters.

It is time to broadly engage with and struggle for wider socio-political and economic issues, which affect all citizens, he said.

He, however, called a revolutionary of improvement of governance and quality of leadership for good and democratic governance.

This would create a better environment for protecting, advancing, and defending the overall interest of the working people.

A revolution may, indeed be desirable under the circumstances, but given the current realities, it is far-fetched.

Broader patriotic and emancipatory struggles for good democratic governance may under the circumstances, help rescue the country and reposition it.

That is towards the satisfaction of the fundamental needs and aspirations of all citizens, and improving the scope and space for working peoples, he said.

Jega also noted that in view of the general elections, it was time to effectively mobilise and involve Nigerian workers in broader political engagements towards using the electoral process to improve the leadership recruitment processes.

He called on Nigerian workers, trade unions, among others to work together with credible patriots in professional associations to bring about remarkable improvement in politics and governance, as we inch towards the 2023 general elections.

The minimum agenda would be to improve the integrity of the Nigerian electoral process; to demand for reforms to expand the scope of transparent democratic participation within political parties.

Others are to improve the processes of selection, fielding and election of candidates into positions of leadership in governance at all levels, local, state and federal.

The task is to ensure that either a working people-oriented political party with a popularly acceptable programme fields good, competent and credible candidates.

Only candidates who have integrity, competence and who meet people-oriented selection criteria are elected into executive or legislative positions in governance, he said.

All hands of progressive forces need to, have to be on deck to prevent our country from imminent collapse, and to turn it around on to a trajectory of good democratic governance for beneficial democratic, socio-economic development, he said..

On his part, Prof Yusuf Zoaka, Dean, Faculty of Management Services, University of Abuja, noted that the NLC made attempts to float a political party in the country known as the Labour Party.

Zoaka said the Labour Party had since been hijacked by some usurpers denying Labour and workers of their rightful platform.

According to him, what stood on its way is the fictitious ban on civil servants or workers who have regularly been reminded by their bosses that civil servants are banned from active politics and disunity among the labour unions, among others.

The 1999 Constitution Chapter Iv, Section 40, provides citizens with the right to participate in politics.

There is need for the NLC to be active in political space now that it is very glaring that the two dominant political parties have failed the people.

Labour should not allow the stage to be captured again by another more deadly group than the current ones.

Therefore, the stage is already clear, NLC should lead the people to take the centre stage with all the downtrodden people in Nigeria, he said.

Zoaka however, suggested options and action plans that the NLC should adopt.

He said that the NLC should recover the Labour Party and go with the people, negotiate with one of the main parties or participate through political engagements.

He also called for the establishment of a broad based strategy committee to work out an implementable programme for national emancipation and and effective political engagements.

All in all, experts stressed the need for workers to actively participate in electoral contests in order to improve the quality and integrity of governance.

NAN

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