Senate confirms Emefiele as CBN Governor Newly confirmed Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele Wednesday vowed to probe alleged N262billion deficit in the expenditure of the apex bank. Emefiele who was responding to a question during his screening by the Senate in Abuja prior to his confirmation also pledged not to spend any money in contravention of the law. There was however a short hit before Emefiele was allowed into the chambers of the Senate. Senator Kabiru Gaya had citing an order of the Senate, drew the attention of the lawmakers to the fact that then suspended CBN Governor, Sanusi Lamido Sanusi was still in court and thus it would be unwise to screen a successor. Gaya said: “Sanusi went to court, now in the event that the court rules that the governor should return what will happen? Why don’t we wait until the court case is over?” Senate President David Mark however ruled Gaya out of order saying thenSenate would take responsibility for the action. Mark said: “Distinguished Senator, you have done your best and you have been seen to have done your best. “Unfortunately, your best is not going to carry the day here. So let me and all of us including you take responsibility for what we are going to do. “Unfortunately the matter before the court has nothing to do with what we are going to do now. So I rule you out of order.” While answering questions from Senators, Emefiele lamented the penchant by Nigerians to spend Dollars instead of the Naira in local transactions. He said the development could ruin the economy if not checked. Emefiele said he would probe into the various expenditure components of the bank to know how exactly the alleged N262billion deficit became inevitable. He said: “I will look into the budget expenditure components in the CBN but I am aware that we have what is called the operational expenditure profile as well as administrative expenditure profile. “I think and I imagine, I suspect that more of the deficit would have come from areas that are pertaining to operational expenditure and if it is about Operational Expenditure, it means that unfortunately, we cannot do anything about it. “This is because those were the expenditures that were incurred in the course of open market operation which is needed to ensure that we maintain a strong currency and ensure that we continue to have a good country.” Emefiele noted that the core mandate of the CBN is to achieve monetary and price stability as well as ensure a strong foreign reserve. He added: “We are also expected to ensure that we have a strong financial system in Nigeria. “On the back of this mandate we would work very hard to ensure that we achieve macro-economic stability in this country where inflation rate shall be seen to continue to come down. “Where interest rate shall be seen to continue to come down. And where we would as much as possible continue to maintain a strong exchange rate for the country and build a strong foreign reserve. “We would ensure that if approved, that whatever monetary policy decision that would be taken would be those that would improve the level of employment in Nigeria. “Because we know that employment is very important. We know today that we have an employment emergency in Nigeria. “We must ensure that whatever decisions we take at the CBN in the Monetary Policy Committee (MPC) would be those that would lead to improvement in the level of employment in Nigeria. “We would ensure that we work with the manufacturing companies to ensure that we improve on their level of production and by extension ensure that we improve and achieve economic growth in Nigeria.” He stated that aside from the vote mandates of the bank, he said he would ensure that the CBN and all stakeholders in the economy play a central role towards the growth of the Nigerian economy. “Growing the economy of Nigeria,” according to him, “is a very important assignment other than just the core mandate of ensuring that we have a stable environment. We would do this through the Development Banking Model. “In fact in some of the frontiers and emerging markets in the world we have seen development banking used as a tool towards achieving economic growth, development and industrialization. “In the Latin American countries of Brazil and Mexico, development banking was used to achieve economic growth and development in these areas. And today Brazil is seen to be one of the BRIC states in the world.” He said it is necessary for the CBN and the Ministry of Finance to work in the same direction for the sake of the economy. He said: “The Central Bank of Nigeria is the monitoring authority whereas the Ministry of Finance is the fiscal authority. It is important that in their relationship they must work in one direction. “They must push in one direction. If we push in opposite directions what you will find is that we are not going to be able to achieve economic growth and development that we are talking about. “If the decision is that we should pursue a conventional policy, both the Central Bank and the Ministry of Finance should be seen to move in one direction. “So, we expect that there should be a collaborative relationship where they are both ready to work together for the common good of Nigerians.” He said he would ensure that Nigerian currency is respected. He added: “I think one of the core mandate of the Central Bank is to ensure that we maintain a legal tender and they respect it and ensure that whatever is done that our own Naira has to be used as a legal tender. “I will take it as a primary responsibility to ensure that the attempt to dollarize the Nigerian economy is discouraged. We should not allow it because it would create problem for the economy.” He said the CBN would not support devaluation because of its potential devastating effects on the economy. Emefiele said: “It is true that we have seen the reserve dropping, it is as a result of speculative attack on the Naira because I think that there will be devaluation as a result of what is happening in the world today. “There is no need for anybody to worry about devaluation because it is a very devastating action to be taken in the country particularly because we are import dependent country. “Devaluation will hurt the economy. We have an economy that is still very strong with about $39billion in foreign reserve to sustain about nine months of import. “For as long as we have crude prices standing at about $100 per barrel, it is a strong economy. So, if we allow devaluation to happen, it will hurt the economy. “So, because we are import dependent, and we allow devaluation, many people will lose their jobs, prices of goods and services will go up, productivity capacity will come down and eventually leads to inflation. “The policy being adopted now allows us to hold on to exchange rates and ensure that we do not engage in devaluation should be continued.” He added: “On the issue of banking supervision, I want to congratulate the management of the CBN for doing an excellent job. “There was a global financial crisis in 2008/2009 but the CBN since then, has ensured a financial system stability to the fact that today, no customer has lost his money and some banks had been bailed out. “For an institution that had done such excellent job, it should be commended for ensuring strong financial stability in Nigeria. “We will be fair, we will be just but we will be firm in whatever we do.” He described the Asset Management Corporation of Nigeria (AMCON) as a child of necessity. He added: “If the agency was not established, some of the banks would have been liquidated today and the customers would have lost their deposits.” On the exchange rate, he said the CBN would continue to ensure that it maintains strong exchange rate. According to him, what the CBN is doing now is to use various instruments of currency policy to control the exchange rate. He added: “Actually, the exchange rate that the CBN has is N155 to one dollar. We have the unofficial markets but the CBN usually intervene from time to time to bridge the gap between the official and unofficial market. “On the interest in lending rate the national cost of fund in the banking industry, I will try under my leadership to ensure that we intervene and see how deposit rate can be brought down, hence lending rate will also come down. “On the amendment of the CBN Act, it is the primary responsibility of the National Assembly. However, in doing so, I will appeal that before we take a decision to amend the Act, let us carry out a deep study; a scientific examination of the issues involved particularly how other countries are doing it. “We need to know whether their CBN is independent or not so in taking such a decision, the National Assembly should take a decision that is just, fair and one that is in line with the best world practice. So the decision is yours. “On oversight, I agree with you that the CBN should have Operational Expenditure Profile and Administrative Expenditure Profile. I will always make myself available for clarification on these two subject matters anytime you wish. “We will try as much as possible to be transparent, fair and try as much as possible to do what is right. “On the issue of employment, apart from achieving a macro-economic stability, we would pursue a development banking agenda that would generate employment by substituting import oriented economy with export oriented industrialised economy. “We will try and raise bonds and channel to agriculture and manufacturing sector so that small farmers, small scale industrialists have access to loans which we will channel through their cooperative societies without demanding stringent collateral. “On the issue of being a banker or an economist managing the CBN; I have taken courses in macro economy and I have the experience as a banker managing one of the biggest banks in Africa and this positions me adequately to manage the CBN with the professional experience I have garnered in my 27 years in the banking industry. “For the post of the CBN governor, you need somebody who is a banker, an economist and wealth of experience to be able to handle this task. “On the issue of target to bank marketers, it is what I worry about. The point is that every institution in any part of the world set performance target. “This is often used to reward excellence performance. We will discuss with some of our colleagues to see how some of the negative aspects can be addressed.” Senate President David Mark describes the post of the CBN Governor as a very key appointment and urged Emefiele to discharge “prescribed responsibilities of the Governor of the Central Bank without fear or favour.” The Nation. Print Friendly
Posted on: Wed, 26 Mar 2014 17:42:49 +0000