Exchange rate, price stability, interest rate, and economic growth, top priorities as the financial market and the public await the appointment of the next governor of the Central Bank of Nigeria (CBN).
President Bola Tinubu, on Friday, suspended Godwin Emefiele as governor of the CBN in what is expected to usher in reforms in the financial sector of the economy.
Emefiele was directed to immediately hand over the affairs of his office to Folashodun Adebisi Shonubi, deputy governor, operations, directorate, who will act until the conclusion of investigation and the reforms.
“The most important task for the new CBN governor will be to resolve Nigeria’s foreign exchange (FX) harmonisation and to restore better functioning to the Investors and Exporters (I&E) window,” said Razia Khan, managing director, chief economist, Africa and Middle East Global Research, Standard Chartered Bank .
She said, “They will likely have to do this at a time when Nigeria’s FX reserves are constrained and the ability to raise market rates to more attractive levels is not in place, given the damaging impact on debt service costs. Nonetheless, it is essential that Nigeria does proceed with FX reforms.
“Cleaning up the CBN’s balance sheet – to the extent to which it got involved in lending in the economy – will also be key.”
Khan said the reforms will not be easy – but remain necessary if Nigeria is to draw a line under recent economic management and put in place conditions for longer term macroeconomic stability.
“We need a CBN governor that has a thorough understanding of monetary economics so that when the monetary policy is being discussed, he will have a good understanding. Under Emefiele, we did not have that, “Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, said.
He said the country needs a CBN governor who engages with the stakeholders because the monetary policy has wider implications on the various sectors of the economy.
“We would like to see better collaboration between the fiscal and monetary authorities. We want to see somebody who will have a good balance between inflation objective and growth objective so that there will not be too much fighting of inflation to the detriment of growth,” Yusuf said.
He said the CBN should de-emphasise development finance, adding that it is better to have a properly structured development finance institution like the Bank of Industry, Development Bank of Nigeria.
According to him, the foreign exchange management needs to be better done, adding that the current FX management is completely a disaster.
Ayodele Akinwunmi, relationship manager, corporate banking at FSDH Merchant Bank Limited, expects financial stability, price stability and economic growth from whoever will be the next CBN governor.
“This is not of interest given that Emefiele is said to be on suspension and an acting governor is already appointed. We will know if there will be a new governor in due course, Taiwo Oyedele, head of tax and corporate advisory services at PwC Nigeria, said.
Read also: CBN governor’s suspension seen ushering in monetary policy reform
Temitope Ovie, an IT consultant said her expectation from the next CBN governor is to stop stamp duty/electronic charge.
She said this is because a lot of Nigerians feel the bank is stealing their money, even after explanations. They still don’t understand that the stamp duty goes to the CBN. She said that the report reaching the masses is that stamp duty collected for the whole of last year cannot be accounted for by CBN.
“Stamp duty is some form of corporately stealing from the masses. We already have transfer charges, alert charges, account maintenance, card maintenance charges, so what exactly is stamp duty for?
Obiagele Favor, a Lagos-based research analyst, said that she expects the new government to put a stop to the hawkish stance on interest rates.
