Friday, January 03, 2014 12.42 AM / Olufemi Awoyemi, Proshare
When on Sunday, October 27, 2013, Proshare and Businessworld decided to focus on the core issues involved in a post Sanusi Lamido era, we could not have anticipated the series of events that occurred thereafter – which in the main, brought a renewed focus on the significance of the office of the Governor of the Central Bank of Nigeria in a changing national economy and global market.
The dust will appear to have settled on the usual media frenzy that accompanies such significant disclosures, yet it has infused a new political calculus to the decision criteria that may be at play in the appointment of the next CBN governor by Mt. President. This we will address in much detail in a separate contribution on the subject.
Today, the front runners include Bisi Onasanya (Banker/Accountant and GMD First Bank Plc), Mustapha Chike-Obi (Investment Manager and CEO AMCON), Aigboje Aig-Imuokede (Lawyer/Banker and Ex-GMD of Access Bank Plc), and Olusegun Aganga (Investment Banker and Minister of Trade & Investments).
We do not discount the possibility of an hitherto unconsidered name popping up such as that of Kingsley Moghalu (Deputy Director, Financial Stability at CBN); but fact of the matter remains that whosoever follows from hereon must appreciate the Sanusi Lamido Sanusi phenomena - he has permanently altered not only the nomenclature and profile of the CBN Governorship but set the tone for a building up on its relevance and role in the economic direction of the economy.
With that in mind, and further to the thorough dimensioning of issues articulated in the presentations/submissions we provided - making up this compendium ; we wish to conclude with a clear statement on the choice open to the president further to the options under consideration.
The optiions in the main would appear not to match the global direction by leading economies but may perhaps represent our level of development and political maturity at this time.
Making the Case
In this compendium, Proshare, Businessworld and its economic research think-tank, through rigorous and carefully developed analysis have been able to provide a new architecture and agenda for the next Governor of the Central Bank of Nigeria (CBN), when he/she hopefully takes over the mantle of leadership in May/June 2014.
In the prologue to this discourse, the prima facie qualifications for who should mount the saddle of leadership of the CBN were explicitly stated without bias. We unequivocally stated that only the best brain is good enough for the governorship of the CBN – something we consider a non-negotiable proposition, given the enormous challenges facing Nigeria in a post financial crisis world.
We equally gave credence to the growing position in the economy that the appointment of the CBN Governor can no longer be based on those hitherto well-known considerations and pandering – such as ethnic or geo-political calculations, but one premised strictly on MERIT as a follow through on best practice as exemplified by the recent decisions in the United States of America, Britain and China.
We understood however that this was a hopeful expression and a raising of the bar brought about by the outcomes arising from the Sanusi Lamido intervention in the financial crisis and the modeling of the global financial architecture which took copious lessons from the Nigerian experience, despite criticism about the methodology or/and execution apparatus.
Truth is that the person in charge plays a key role in driving the institution and in Sanusi Lamido’s case, his faith and belief in a country where the classical role of the state as a direction setting institution, ultimately played a key role in the outcomes we got.
While he believed in the positive role of free-market economics; he nurtured and delivered an effective role as a change agent seeking to re-order the economy he presides over as the chief-banker based on his conclusions about the un-sustainability of the increasing role of an all-powerful centre and the apparent paradox it created as evidenced/manifested in the income/wealth disparity in the country.
At the risk of contradiction, he found himself leaning more towards being a propagandist rested in part on his well-deserved reputation as a solution provider to a problem we all knew about but no one was willing to ”bell the cat” on. The outcomes from his actions will continue to elicit varying reactions but the overall good would seem to have been achieved despite his inability to articulate a clear alternative economic theory, which supports the views of critics that there’s much more ambivalence about his policy pronouncements and especially his popularizing of issues as with his intellectual honesty. What cannot be denied however is his role as one of the ‘heroes’ of the market crisis, a role he delivered with uncommon gusto.
From a review of the new CBN Governorship possibilities profiled, we can glean very little about their unique economic theory supporting their credentials save for Mustapha Chike-Obi who has consistently expressed his convictions about a growth based model (something at variance with the SLS inflation targeting approach) premised around the China model with a focus on infrastructure financing and economic expansion focus. For Bisi Onasanya, a proven banker and well informed professional who has never been shy from experiencing his opinion on issues that affects the financial economy, through Olusegun Aganga who would appear to thrive around preserving status quo, to Aig-Imuokede who openly declared his desires to sustain the SLS policies – the choices could not be more narrower than envisaged.
For Nigeria to become one of the top 20 economies of the world as envisioned therefore, and for the CBN to play a critical role in achieving this objective, we need to know a lot more about the directions this individuals will like to take.
Unfortunately, the position of the Central bank governor does not lend itself to campaigns and all we can rely on remains position papers on the economy, its monetary and fiscal policies and the appreciation or articulation of how these two can work in tandem with the agenda/plans of government. This information is not available for any reasonable conclusions to be drawn.
The Agenda for the Next CBN Governor
Drawing attention to those areas we deemed crucial and critical to Nigeria’s economic development in the coming years – creation of direct and efficiency/productivity enabling jobs through significant investments in infrastructure such as the 4th Mainland bridge, a new port at the Tin-Can island to cope with the demands of an expanded economy, rail transportation to link up the rural areas, enhanced efficiency of existing road networks linking trade routes and social interaction, development of waterways transportation for the riverside; opening up opportunities for investment in ICT gaps/opportunities for millions of Nigerian youth; expanding healthcare through incentives for PPP and private investment to address the declining mortality rate needed to preserve productive capacity and intellectual capabilities available to the country; investments in education through an upgrading of the public institutions to drive quality in the private concerns which ultimately will improve the quality of outputs available to the economic needs of the country; and investment directed towards the diversification of the economy including passing the PIB.
Other economic goals which should impact the monetary policy outputs from the next CBN Governor will extend to policy positions on wealth creation opportunities that the capital market affords through the creation of a nexus between high growth contributors in the economy and their incentive motivated presence in the capital market; adequate policies that incentivizes the real sector, especially the manufacturing, agriculture and small and medium enterprises to adapt to technology, make investments in capital investments needed to compete globally and offer competitive local substitutes that minimizes our dependence on imports; and the overall outlook on consumer empowerment which can be better delivered and managed where we have a wholesome and inclusive financial economic plan.
In setting this agenda, we are not unmindful of the need to exercise caution and patience in order to achieve an incremental but sustainable improvement towards the inevitable role of the central bank in an economy like Nigeria’s.
Yet, it must be said that the next CBN Governor should avoid overloading the desired goals for his/her engagement with economic themes that completely fall outside the domain of its mandate and natural intendment – something that is yet to crystallize.
Our Preference - Whom Does the Cap really fit?
The President knows what is best for the country, especially in the spirit of his own legacy and currently, his Economic Transformation Agenda in which the CBN forms a key component of.
We believe that the President is usually well-briefed when making or taking such a decision and that our modest effort here represents a honest contribution from citizens and stakeholders in the larger scheme of things.
Whatever the final decision of Mr. President on this crucial appointment, we remain confident that it would be one that would signpost the direction of his government in a crucial election year.
In a situation where the Central Bank has risen to the point of ultimately picking winners and losers in the financial economy post the financial crisis; we may wait for yet another day to tilt the scale towards economists.
The best we can hope for is that the best candidate that emerges from the field known to the public will not shy away from building on the positives this esteemed institution has built to bring our financial system at par/ahead of the global best practice and to ensure we have a sound economy premised on an inclusive economic agenda/philosophy the markets can understand and interpret.
This should therefore not be a difficult decision to make for Mr. President.
The earlier this is done, the better for the markets and economy at large. The current cycle has run its course.
For additional information, click HERE
Other Articles/News on the Central Bank of Nigeria 2014 Decision:
1. Dr Kingsley Moghalu, Deputy Governor Financial System Stability, Central Bank of Nigeria, the Nigerian economy
2. Front Runners for CBN Post Emerge – Aganga, Mustapha and Aigboje in the mix
3. Aig-Imoukhuede Exudes Confidence in becoming the Next Governor of Nigeria’s Central Bank?
4. The Impact of the Global Financial Crisis on the Nigerian Economy
5. What causes a currency crisis?
6. The New Economy: Inflation vs Monetary Policies, Measuring CBN's Performance
7. GDP and FDI: Measuring the Performance of the EMT and CBN
8. Austerity vs. Stimulus: Way forward for Nigeria
9. To be or Not to be - Pragmatism or Status Quo in Appointing New CBN Governor
10. Impact of the Global Financial Crisis on the Nigerian Economy
11. China: Economic Pragmatism at work, even with latest reforms
12. Designing an Effective Monetary Policy for Nigeria: A Case for Dual Mandate
13. Global Outlook: Choosing Central Bank Governors in a Changing World
14. Globalization, Nigerian Economy and Management of Foreign Reserves and Sovereign Wealth Fund
15. Role of Central Bank of Nigeria in the Management of Nigeria's Economy
16. The Next CBN Governor Should Be Able to Create Jobs
17. Expected Changes in CBN: Who Will Be Replaced or Returned?
18. CBN Monetary Policy Committee: Beyond a pedestrian focus on personalities!
19. Prologue: Choosing the Next CBN Governor: Whom Does the Cap Fit?