Business
Consequences Of Politicisation Of CBN
By Dele Sobowale
DELE SOBOWALE
“The climax of every tragedy lies in the deafness of its heroes.”
Camus,1903-1960, VANGUARD BOOK OF QUOTATIONS,VBQ, p 90.
Godwin Emefiele, Governor of Central Bank of Nigeria, CBN, just barely escaped spending Christmas 2022 and New Year’s Day 2023 in detention by the Directorate of State Security, DSS. If only the operatives of the DSS had been more hardnosed and intelligent, they could have had the Governor where they wanted him. But, they were too clever; they took the long road and got lost in the fog of a legal tangle.
However, Emefiele received temporary relief by Divine grace. He is not yet exonerated; and the DSS, more than ever, will want to prove that it was not being malicious or playing politics with its mandate in making those serious allegations. Aiding terrorism, in any way, is a capital offense for which someone can be executed or get imprisoned for life. That is why this particular case should be of interest to all well-meaning Nigerians.
“Let justice be done, though the heaves fall (Fiat Justina et ruant coeli).”
Lord Mansfield, 1705-1793) VBQ p 111.
The DSS has not fully disclosed the full content of its case against Emefiele; what was presented to the court was merely judged insufficient to warrant an ex-parte court order to have the man arrested and detained. So far, the judiciary has upheld the rule of law admirably – without entertaining the allegations and the rebuttals by the accused. Those will, and should, come. The entire country, even the whole world, deserves to know if Emefiele has been funding terrorism; and which terrorists were the beneficiaries of his support. Nigeria’s future might be at stake in this matter.
NECESSARY DISCLOSURES
“Every man has a stream of tendencies…”
US Supreme Court Justice Wendell Holmes, Jr, 1841-1935
Since the case has not started, and, given Nigerian antecedents, the matter might be swept under the copious rug of officialdom, inside the Rock, it is still legally safe to comment on it as much as we want. But, as usual, when commenting on great public office holders, it is often necessary to disclose your previous relationship with them and the impressions you held before the particular matter arose. That way, readers can decide for themselves whether you have been objective enough or not in what follows.
I have met Emefiele only once; and that was when he was finishing his first term; and hoping to be re-appointed. I wrote at least two full length articles in support of his second term; because I honestly believed he saved the nation from worse economic catastrophe than what we experienced. Our meeting, lasting about an hour covered a bit more than monetary policy issues; and some of the take-aways will remain with me for ever. But, one was most striking.
Emefiele exuded that aura of all old Kings College, Lagos boys, who were groomed to serve honourably. Having known a thousand or more of KC boys in my life, I came away with the impression that here was an officer to trust. To a great extent, I still do. At least, it is impossible for me to believe that Emefiele will knowingly fund terrorism. KC boys just don’t do that sort of thing. But, has he been perfect? The honest answer to that is “No!”. Has the CBN been involved in questionable activities? The answer to that is “Yes!”. Can the CBN Governor be prosecuted for his actions? The answer is “May be”. Should there be a probe or open inquiry into the activities of the CBN under Emefiele? Answer is “Definitely”. Now let me explain the answers to the questions which some of our regular readers have asked me since the failed attempt to arrest Emefiele made headline news. However, one thing is clear to me. The DSS could not have moved against the CBN Governor without informing the Attorney-General of the Federation,AGF, and President Buhari. The two wanted him arrested. Period.
CBN MANDATE AND CBN ACT
“The conduct of Monetary Policy in Nigeria and all the activities of the Central Bank of Nigeria, relate with the core mandate of the bank and therefore are best understood from this perspective. Consequently, in pursuant of its functions in compliance with the core mandate, the CBN undertakes monetary policy in order to:
• Maintain Nigeria’s external reserves to safeguard the international value of the legal currency.
• Promote and maintenance of monetary stability and a sound and efficient banking system in Nigeria.
• Act as banker and financial adviser to the Federal Government; and
• Act as lender of last resort to banks.
In order to shed light on the fog cast by lawyers who drafted the laws and Decrees, as well as amendments, since 1958, economists have interpreted the CBN’s core mandate in language that the common man might very easily understand. Broadly speaking they are as follows:
• To maintain, as much as possible, the exchange rate of the national currency; and ensure adequate external reserves for the country.
• To moderate the level of price increases i.e control inflation.
• Control interest rates; and consequently seek to promote full employment.
• To act as banker and adviser to the Federal Government; and banker of last resort to both the FG and banks.
• To monitor and control the activities of banks and ensure they operate within the law and obey banking regulations as pronounced by the CBN.
• To maintain its independence, within the laws establishing it, from the FG.
That last mandate was introduced by Decree 24 of 1991, under General Babangida. It was designed to give the CBN a free hand in the operation of monetary policy – without fear of termination of appointment of the Governor; except on conditions set out by statute. Unfortunately, the nation was deprived of an opportunity to test the limits of the CBN Governor’s independence when President Jonathan suspended former CBN Governor, Sanusi Lamido; and the latter went to court. Lamido discontinued with the case; when he was made the Emir of Kano.
Ordinarily, a CBN Governor, once appointed, would serve for five years; unless he voluntarily resigns or dies in office. The nation simply has to endure his monetary policies – irrespective of how we feel about them. Unlike those in the Executive and legislative branches of government, he is not supposed to be engaged in a popularity contest. If bitter economic medicine has to be administered to safeguard the nation’s economy, he dispenses them without qualms and without caring what the President and the ruling party thinks about them. That was why US President Biden could do nothing when the US Federal Reserve Bank, FRB, raised interest rates three times since August this year – even with a Mid-term election approaching. The Governor of CBN is not a subordinate or a staff of the President; he is a servant of the constitution and the laws which established the institution.
That is why a CBN Governor, although very respectful of the President, must guard his independence jealously. Once appointed, like a Justice or Magistrate, he must not only be non-partisan; he must be seen to be above reproach in that regard. Despite pressures brought to bear on them, to the best of my knowledge, all the previous CBN Governors before Emefiele maintained that high standard.
EMEFIELE AND PARTISANSHIP
“From the sublime to the ridiculous, there is only one step.”
Napoleon Bonaparte, 1769-1821.
Emefiele was appointed by Jonathan when Sanusi resigned. He was just one year in office when Buhari was elected President. Buhari lacked the power to remove Emefiele; and he knew it. Otherwise, he would have appointed a Northerner to replace the CBN Governor. Nothing suggested that Emefiele should be afraid for his job; and we don’t have sufficient information to determine who made the first move resulting in the CBN Governor crossing the firm but unseen red line separating the formulators of fiscal from those charged with monetary policy. But, these facts we know very well.
Buhari committed the serious blunder of not appointing his Ministers for almost five months after his inauguration. Virtually all Presidents and Prime Ministers name their top officers – especially Defence, Finance and External Affairs – within a week of assuming office. That effectively placed government in the hands of civil servants who in 16 years created the problems he promised to change. That was hot all, the Vice President, Osinbajo, was appointed as the Chairman of the Economic Management Team, CEMT. The VP might be a brilliant lawyer, but he was/is a misfit as Economic Czar.
Economists were alarmed when the VP appointed the CBN Governor as a member of the EMT. Granted, the CBN mandate empowered it to be banker and financial adviser to the FG; that was not meant to be interpreted as joining in fiscal policy making. Fiscal policies – deficit spending, borrowing, prohibition of goods, financing of projects and programmes – inevitably impact exchange and interest rates. Monetary policy should aim to control the negative repercussions. Emefiele had cast himself in the role of the fireman who first of all helps to start the fire; and then runs around to put it out.
ABP SYMBOL OF MISCALCULATION
“Fake farmers benefiting from ABP –AFAM, December 8, 2022.
A good example is the Anchor Borrowers Programme, ABP, which we learnt later, started in 2015; and which has now ended in failure. One trillion naira was invested, less than that amount will be recovered; even as CBN has terminated the programme. ABP was a classic fiscal policy programme involving retail banking – which is totally outside the mandate of CBN. Yet, the bank not only got involved in the programme, Emefiele actually took credit for ABP’s “successes” until recently when the failures became too glaring to conceal. Earlier in 2022, Nigerians watched as President Buhari, the VP, Minister of Agriculture and the CBN Governor stood in front of what we were told were paddy rice pyramids.
The impression was created that all the rice was grown in Nigeria and the nation would soon be self-sufficient in rice. As someone who has had a great of experience with rice in Sokoto, it was obvious to me, that not all the rice (if at all any of it) was grown in Nigeria. I sent people to go to the site of the display and bring back grains of paddy whici would have been dropped. My fears were confirmed. I have challenged the FG and CBN to show proof that indeed the rice on display was grown in Nigeria – to no avail.
Yet, on the strength of that false claim, a mob of people took to the media asking Emefiele to run for President; and he actually took them seriously. It was then that Nigerians were told that Emefiele had crossed another red line for someone holding his position. He was revealed to be a card-carrying member of the All Progressives Congress, APC.
He did not deny it. On the contrary, he actually hired a lawyer to claim his rights to run for President – while still holding on to his office as CBN Governor. The audacity was unprecedented; and it called to question several measures taken by the bank which patently violate its mandate.
FG AND CBN IN SYMBIOTIC LAWLESSNESS’
“A precedent embalms a principle.” William Scot, 1745-1836.
Emefiele established a precedent by joining in fiscal policy making; he established a second by getting involved in ABP; third he unilaterally imposed import prohibitions on a range of goods. But, his most questionable action in the last seven years consisted in his collusion with the FG to violate the Fiscal Responsibility Act – which stipulates the maximum percentage of loans which the bank can grant to the FG. Under him, the FG took short-term ways and means loans totalling N23 trillion; or the equivalent of two annual budgets.
It was in gross violation of Section 38(3) of the CBN Act 2007. Furthermore, he assumed, and was allowed to get away with it, the attitude that he has absolute immunity from lawmakers; despite all the provisions of the constitution.
He was allowed to get away with it by Buhari because of their symbiotic exhibition of lawlessness. In seven years Buhari exceeded the limit if loans he could take from the CBN; and the bank irresponsibly granted his illegal requests. Emefiele thumbed his nose at the National Assembly, NASS, and the law. Buhari did nothing because they were involved in unprecedented conspiracy which has ruined the Nigerian economy for nearly a generation.
In addition, the CBN refused to answer audit queries issued by the Auditor General of the Federation, AuGF, several times. Again, Buhari refused to call him to order. One of the startling consequences of allowing Emefiele to operate, as if above the law, can be found in the Auditors Reports for 2018 and 2019. They read as follows:
2018
Audit observed that three (3) payments totaling N25,000,000,000 (twenty-five billion) were transferred from independent revenue accouts ….without passing through Consolidated Revenue Funds from which withdrawals are only allowed through appropriations as required by Section 80(2) of the Constitution of the Federal Republic of Nigeria, 1999; as amended.
2019
Audit observed from the review of the Recovered Funds components of Inflows of Foreign Reserves that:
ii No amount was shown as Recovered Funds between 2016 and 2019, and
iii There was no justification for the nil recovery between 2016 and 2019 despite various public statements f recovered funds by the Economic and Financial Crimes Commission (EFCC) and other agencies of government.
These examples of the sort of questionable transactions involving the CBN are not exhaustive however. Of all Ministries, Departments and Agencies of the FG, only the NNPC has received more unanswered queries than the CBN.
No other Governor of any national bank would have received such queries and ignore them; particularly when in addition to the President or Prime Minister, members of the relevant committees would also have received them and would be raising hell. Emefiele confidently refused to answer the queries. Indeed, the CBN has been notorious for not sending its Annual Reports to relevant authorities. It should not surprise anyone that other questions raised, by the NASS,about how the affairs of the CBN are managed have been regularly treated with disdain – because he had the support of the President. Emefiele became a law unto himself.
It might be pertinent to ask, at this point a relevant question about how Buhari reacted to the disclosure of Emefiele’s partisanship. Would Buhari have allowed the Governor to remain in office, if he was found to be a card-carrying PDP member instead of APC? Nothing demonstrates the corruption underlying their unhealthy and unprincipled relationship better than that.
Emefiele allowed Buhari to bury Nigeria under a mountain of unsustainable debt; and Buhari overlooked all the illegalities committed by the Governor; which were heavy enough to require a probe by the NASS and/or the Ministry of Justice.
Nobody can convince Nigerians that there no funds recovered between 2016 and 2019. The questions remaining to be answered are: how much was recovered during the period under review? What happened to the funds? And when will the CBN issue a comprehensive report to Nigerians?
Otherwise, this might be the first item on the national agenda for the next President. Buhari, as an accomplice in all the illegalities will not undertake that patriotic duty.
DOES EMEFIELE DESERVE THE TREATMENT HE IS RECEIVING?
“Are you going to hang him anyhow; and try him afterwards?”
Mark Twain, 1835-1910
One thing is abundantly clear. The DSS would not have moved against Emefiele without letting Buhari know in advance. Why Buhari did not stop the service remains a bit mysterious. Again, one thing is certain. Emefiele has now become dispensable.
The FG has no more favours to seek from their former comrade; and his recent independent monetary policy measures, as well as comments might have become irritating to members of the cabal who intend to milk their opportunity to the last day.
Trillions of naira bills are still stashed away which might become tissue papers if the new currencies circulate faster and e-banking is more rapidly embraced. Emefiele has obviously hurt some powerful people very badly; and they are determined to make him pay dearly for it.
Even before we see the evidence the DSS has, I strongly believe that what is happening is akin to taking a bazooka to kill a fly. They want to hang Emefiele first; and present “evidence” later. Otherwise, why approach the matter as they did? They just wanted him out of the way; perhaps, so his Deputy can take over.
Emefiele can never willfully finance terrorism. What can be the motive? Granted, he has accepted the mob, instead of reasonable people as his supporters; and they get him into hotter water. But, I honestly believe he is patriotic in his own way. His previously great legacy had been tarnished by ill-advised political involvement. The next President will most probably quietly ask him to resign; despite the fact that his tenure extends to 2024. Otherwise, he will most probably be asked to step aside while a deep probe is conducted into the affairs of the CBN from 2015. He asked for that. Nobody should trust a CBN Governor playing politics while in office.
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