By Nik Ogbulie.
Memories of what was known as new generation banks are made of bankers in the likes of ‘Yemi Cardoso; brilliant, young, stylistic and debonair. They came in different sizes, some tall, others huge and even a good number of them are short, yet they did not fail to impress; as they did not only look so smart with lavish appearances, but felt free with their jumbo salaries which changed the perception in the banking sector. Each of them housed the possibilities of getting to the peak of their career and even bursting it into the far and beyond positions….just like Cardoso has done. A highly cerebral bunch, full of innovation. Their list is endless. They included names like Yemi Cardoso, Austen Obigwe, Jibril Aku, Bello Maccido, Reginald Ihejiahi, Lawrence Osa-Afiana, Leke Pitan, Nick Okpara-Ndudu, Mohammad Sagagi, among others. Obviously, this could be a list of ‘Central Bank Governors-Designate’ from where the President must make his choice. These are young Nigerians who set the banking industry on fire with generational statements that changed the face of the financial sector, to the extent that what we have today as an endless evolution into financial intermediation is really by their grace.
Most of them were privileged to have erupted from the tutelage of the best financial institutions in the World, like Citibank, Bank of America and others. They are products of institutions where “error-free banking” holds sway and constitutes the biggest landmark for efficiency. They are a group of young bankers that brought life into money market activities and forex revolution. That was the time the Nigerian Money Market Association, managed by some of them, was key to the state of the foreign exchange transactions which became a daily quote…..the days of Open Market Operation (OMO). A group of people like that could not be kept out of an economy that is eager to burst loose.
Coming into the center stage of global financial management as Governor of the Central Bank of Nigeria (CBN) is a tough journey, but so sweet to make. It is a journey built on thrills and frills of every economy because the causatives of the success or failure are controlled by the wider global developments, most of which are far and beyond the powers of any person. But the beauty of the appointment at any time is the fact that the appointee is seen as the spirit that can always see tomorrow. For him, the future of his actions and inactions as manager is the constituent of the exceptional capability that influences his being chosen. For Yemi Cardoso, tomorrow has come!
As the case may be, the CBN is one of the institutions in the country whose effectiveness in terms of planning and development of Nigeria as an economic entity. This is why its autonomy was fought for eight years within the reigns of four Governors (Christopher Sanusi, Soludo, Lamido Sanusi and Emefiele), setting up the institution as alter ego in a bid to separate it from all the vagaries of the political leadership. When all other institutions fumble in the various countries of the world, their Central Banks remain very stable and continue to point to the way that has been programmed. That is the reason why the institution has remained a basket of policies ruled by men and women of proven character and unassailable patriotism and professionalism. To find this kind of character is very difficult, but at the same time they abound in a nation. Much as the Nigerian President, Bola Tinubu, understands Cardoso like the back of his own palm, nominating him must have passed all the critical tests, because he is billed to manage the wealth of the nation.
Now that Cardoso is governor, the entire monetary policy of the institution will begin to be gaining traction, as against the lull that was witnessed in the last three months that the institution lost its leadership to a mix-grill of politics and economic policy debates. For a country that has been playing catch-up across all fields, it means that the Governor will be moving at the speed of light with the accuracy of a sniper. This becomes very necessary for the purpose of clearing the backlogs of all the issues that are seriously interwoven with the pre and post-election debates involving a lot of conspiracies around the management of the Nigerian economy by the CBN. Nigerians will expect Cardoso to see the globe as the pedestal while tinkering new policies and fine-tuning the old ones. Nigerians will like to know the right direction to go with the controversial currency redesign project and clinically explain to Nigerians the way forward, while informing Nigerians whether the project was ill-conceived or not and at the same time pilot an appropriate mode to conclude the project. As a matter of fact, the currency redesign project which was abandoned citing some incongruous situations, could be one immediate development the Governor will be challenged with based on the level of discrepancy it has brought into the policy making baggage of the CBN and the presumably very heavy cost already incurred.
Because of the ravaging nature of the naira depreciation, Nigerians feel that the biggest assignment for the new Governor would be to begin a war with everything and many things. But at MONEYReport Magazine, we feel that he must listen to the drumbeat of the global economy on which the dancers in Nigeria must take a cue. It is obvious that there is a serious economic contagion ravaging the globe now which many may not know, but would rather ascribe the development to share incompetence. Most reactions seen and felt in our economy are outbursts from the other parts of the globe which express the axiom that when the developed economies sneeze, the poor nations begin to catch cold. This is why the issue of expedited productivity must be encouraged using all the macroeconomic reflexes to bring down high demand for imported goods. We do not think that there is any policy Cardoso wants to bring in that has not been tried here since the 1989 SAP riots which encouraged all the structurally adjusted rates. So he must have to begin an invention instead of experimentation. He has the advantage of hindsight based on his experience and the availability of his colleagues, some of whom may want to form alliances in whatever form to leverage his attempts.
Three major developments have occurred since Cardoso left mainstream banking. One is cashless economy which has imported all forms of virtual banking including virtual financial activities. The other is increased electronic fraud, and the last is the rampaging forex supply gap. The fact remains that the world has structurally moved on the lane of money revolution which the CBN has been an acknowledged participant by following up with volumes, making it one of the active players on the globe. Today money has gained very high transformation in our economy and this must continue to grow in line with the transnational relevance digital money is spreading across the world. Among the Central Banks Digital Currency (CBDC) demands by the World Bank, the CBN is within the first ten and this feat must be maintained. This will offer the Nigerian economy a lot of income based on size. Our financial inclusion rhythm must be maintained as financial service delivery has reached a crescendo, even with very low education rating in the economy.
It is on record that the previous CBN administration relied so much on myriads of intervention to stabilize the level of exchange. Understandably, it can be seen that there may not have been anything wrong with the forex policy measures in place after all, because the current rate of the Naira over the dollar makes a case for the former. It is on record also that the increased productivity in Agriculture was responsible for a huge slump in food inflation since the last seven years. Looking critically into the CBN operations in the last seven years, one would say that the policy of continued protection for the naira against further slide through several levels of interventions was successful. However Nigerians have criticized the multiple exchange rate regimes, but what is important here is the effort to create windows for minimum application for critical activities most of which can no longer be undertaken now, even in the current dispensation.
The rating of the CBN among all the Central Banks on the globe has been a reflection of the strength of the existing policies, and a strict study of it can explain the new ideas to come with and the importation of inclusive policies that can make the difference to forex, other rates and employment as well as their effects on the fiscal policy area. Since 2018, the CBN has been rated “C” indicating a very high deficiency level across indices. In all the reports, the apex band maintained a GDP growth rates of between 2% and 3.3% a rate which was considered very low, and lower than some of the warring nations across the world. Obviously there may be more to do like improving on the digital banking record which stands among the best in the world. With mobile money highly in vogue right now, there may be the need for the CBN to explore a new way of easing cross border payment in a bid to boost trade. This could be a major approach to ease foreign exchange challenges in the country. Again, Fin-tech is here and we are playing deep and huge in it.
Being a commissioner of economic Planning in the past could be a huge experience, but there is nothing as complicating as money, especially when there are presumably wrong policies in place. To find a way around it, the solution could be to synthesize the economy and come in with better policy. The CBN is like a Supreme Court, it is policy-friendly. In leadership, Policy is King. Welcome Yemi Cardoso!!
