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New CBN boss vows stability, growth

By on March 26, 2014

Nigeria’s new central bank chief on Wednesday vowed to ensure economic stability to create jobs and boost growth, as lawmakers approved his appointment after the controversial suspension of his predecessor.

Zenith Bank boss Godwin Emefiele will replace Lamido Sanusi, who was removed last month on government charges of “financial recklessness and misconduct”.

Lawmakers in Nigeria’s upper chamber of parliament the Senate unanimously approved his appointment following nearly two hours of questioning that was broadcast live on television.

Emefiele said in his first public comments since his nomination that he would make macro-economic stability his watchwords and the central bank would work to drive down inflation and interest rates.

He also vowed to maintain a strong exchange rate to build up healthy foreign reserves as well as formulate policy to address fears about unemployment, particularly among young people.

“We will ensure that during this period, if approved by the Senate, that whatever monetary policy decision we take will be those that will lead to improvement in the level of employment,” he said, warning the country was facing an “employment emergency”.

An estimated 37.5 percent of under-25s are out of work, according to Nigeria’s National Bureau of Statistics.

In a sign of the desperation for jobs, more than a dozen people were crushed to death in a stampede at a civil service recruitment drive in Abuja on March 15.

Emefiele added: “Growing the economy of Nigeria is a very important assignment other than just a core mandate of ensuring that we have a stable environment.”

He also warned that devaluation of the naira would hurt the economy, which is predicted to become Africa’s largest this year when results of a re-basing of gross domestic product are announced.

The naira has lost ground to the US dollar this year, while foreign reserves have fallen to $37.8 billion this month, compared with $42.85 billion at the end of last year, the bank said on Tuesday.

– Embezzlement accusations –

Senate leader David Mark said lawmakers had made a key appointment and added: “Emefiele will ensure the prerequisite responsibilities of the central bank governor without fear or favour.”

Nigeria’s President Goodluck Jonathan suspended Sanusi on February 20 just days after he had accused the state oil company of embezzling $20 billion (14.5 billion euros) of public funds.

Emefiele takes over as the country gears up for elections to choose a new president and parliament next year.

He declined to comment on the allegations that led to his high-profile predecessor’s ouster, as the matter was subject to legal proceedings.

The outspoken Sanusi, who denies any wrong-doing, had been well-regarded among international economists.

He was credited with overhauling a crumbling and deeply corrupt banking sector and stabilising the currency.

He had been due to step down at the end of his five-year term in June and some saw his suspension, which caused markets to wobble, as politically-motivated for blowing the whistle on top-level graft.

One of his deputies, Sarah Alade, has been acting governor in the meantime. On Tuesday, she oversaw her first monthly monetary policy committee meeting.

She kept the key interest rate unchanged at 12 percent, holding true to a pledge on February 21 that the change at the top would not alter Sanusi’s plan for tight monetary policy.

Emefiele had almost no profile outside the banking sector until his name was put forward, surprising market watchers who said he was a low-profile, conservative figure who was unlikely to rock the boat.

 

 

[Vanguard]