I’ll Review Sanusi’s N266bn Deficit-Emefiele
Nigeria’s next governor of the Central Bank, Mr. Godwin
Emefiele, yesterday, promised to review
the past expenditure profiles of the nation’s apex bank to find out why it ran
a budget deficit of N266 billion in 2013.
Emefiele, who was confirmed by the Senate after being
screened for about two hours also unfolded his plans on how to grow the
economy. He said the CBN under his watch will adopt development banking model.
During the confirmation hearing, yesterday, Senate
President, David Mark, gave a stern warning to senators who were in the habit
of hobnobbing with nominees before screening and confirmation to desist from it
to protect the sanctity of the Senate.
Mr Godwin Emefiele answering questions during his screening by the Senate for Central Bank Governorship in Abuja on
Wednesday
Mr Godwin Emefiele answering questions during his screening
by the Senate for Central Bank Governorship in Abuja on Wednesday
The Senate had explained that the reason behind the
confirmation of the CBN Governor before the expiration of the incumbent
governor was to ensure that there was no lacuna.
While fielding questions from senators at the Committee of
the Whole, the CBN governor- designate said he would probe into the various
expenditure components of the bank to know how exactly the deficit became
inevitable.
He said, “I will look into the budget expenditure components
in the CBN but I am aware that we have what is called the operational
expenditure profile as well as administrative expenditure profile.
“I think and I suspect that more of the deficit would have
come from areas that pertain to operational expenditure and if it is about operational
expenditure, it means that
unfortunately, we cannot do anything about it.
“This is because those were the expenditures that were
incurred in the course of open market
operation which is needed to ensure that we maintain a strong currency and ensure
that we continue to have a good country.”
On the issue of high target to bank staff, he stated that
there was nothing wrong with the target even as he said that in any
establishment, there was always a target which he said always led to promotion,
though he was silent on the issue of immorality that the target normally leads
to especially among the female staff.
Dollarisation of the Nigerian economy
He also promised to look into the dollarization of the
Nigerian economy as his prime duty as one of the core mandates of the CBN was
to maintain the legal tender, adding that continuous dollarization of the
economy would create problems in the economy.
His words: “On the issue of dollarization of the Naira, I
think one of the core mandates of the CBN is to ensure that we maintain a legal
tender and respect it and ensure that whatever is done, our Naira has to be
used as a legal tender. I will take it as a primary responsibility to ensure
that the attempt to dollarize the Nigerian economy is discouraged. We should
not allow it because it will create problems for the economy.”
He, however, assured the Senate and Nigerians at large that
if approved, his own regime as the CBN governor would not spend any money in
contravention of the law.
Emefiele noted: “The core mandate of the CBN is to achieve
monetary and price stability, ensure strong exchange rate and build foreign
reserves. We will ensure that we have a sound financial system in Nigeria.
“We will work hard to achieve macro economic stability in
the country where inflation rate will continue to come down. We will also
ensure that the interest rate will continue to come down.
During my tenure, whatever monetary policy decisions we take
will be those that will lead to the improvement in the level of employment in
Nigeria because employment is very crucial to national development.
“Today we have an employment emergency in the country and we
must ensure that whatever decision we take at the CBN will be those that will
lead to improvement in the level of employment in Nigeria. We will work with
the manufacturing companies to ensure that we improve on their level of
production and by extension, ensure that we achieve economic growth and
development in Nigeria.
“The CBN and all stakeholders in the economy will play a
central role towards ensuring that we grow the Nigerian economy in a stable
environment. We will do this through the adoption of the development banking model
that had been tried and tested in different jurisdictions in the world.
“In fact, in some of the frontiers and emerging markets in
the world, we have seen development
banking used as a tool towards achieving economic growth and development and
industrialisation. In the Latin America countries of Brazil and Mexico,
development banking was used for their economic growth and development.”
On the issue of the cashless economy introduced by Mallam
Sanusi Lamido Sanusi, he said, “The cashless policy is one that we consider
very good and important because all nations of the world today are embracing
electronic banking as an electronic channel for doing business.
“Nigeria being a very important country in the comity of
nations should also embrace the cashless regime. We are going to look at part
of the policy that has to do with penalty being imposed on excess withdrawals.
“We will review it to ensure that we mop up all the cash
which are outside into the banking system notwithstanding the limit but we will
encourage people to make sure that they embrace the electronic form of doing
business. Then we could say that when making withdrawals, you should pay
something to encourage you to embrace the electronic form of doing system. We
will look into that and make it better.”
Also speaking on devaluation of the currency, he said, “it
is true that we have seen the reserves dropping, it is as a result of
speculative attack on the naira because people think that there will be
devaluation as a result of what is happening in the world today.
No develuation of currency
“There is no need for anybody to worry about devaluation
because it is a very devastating action to be taken in the country particularly
because we are an import-dependent country. Devaluation will hurt the economy.
We have an economy that is still very strong with about $39bn in foreign
reserve to sustain about nine months of import. For as long as we have crude
prices standing at about $100 per barrel, it is a strong economy.
“So, if we allow devaluation to happen, it will hurt the
economy. Because we are import dependent, if we allow devaluation, many people
will lose their jobs, prices of goods and services will go up, productive
capacity will come down and eventually lead to inflation.
“The policy being adopted now which allows us to hold on to
exchange rates and ensure that we do not engage in devaluation should be
continued.”
He also described AMCON as a child of circumstance,
stressing, “it came about as a result of the financial crisis to clear toxic assets
in the books of some banks and to address the plights of those who lost
investment in the capital market. “If the agency was not established, some of
the banks would have been liquidated today and the customers would have lost
their deposits.”
On the exchange rate, we will continue to ensure that we
have a strong exchange rate. “What the CBN is doing now is to use various
instruments of currency policy to ensure that we control the exchange rate.
Actually, the exchange rate that the CBN has is N155 to one dollar. We have the
unofficial markets but the CBN usually intervenes from time to time to bridge
the gap between the official and un official market.”
Emefiele equally promised a cordial relationship between the
apex bank and the Ministry of Finance towards ensuring economic growth. He
said, “the Central Bank of Nigeria is the monitoring authority whereas the
Ministry of Finance is the fiscal authority. It is important that in their
relationship they must work in one direction.
“They must push in one direction. If we push in opposite
directions what you will find is that we are not going to be able to achieve
economic growth and development that we are talking about. It is important that both the Ministry of
Finance and the Central Bank move in one direction. If the decision is that we
should pursue a conventional policy, both the Central Bank and the Ministry of
Finance should be seen to move in one direction.”
However, Senator Mark warned that “We don’t have to follow
the nominees out of the chamber. Please, we should sit where we are (and) if
you want to see them later on, we can do so. The way we follow to go and take
pictures and all that is not the best for elder statesmen who are our senators.
I want to appreciate your cooperation in that aspect”.
Mark at the end of the exercise noted that the number of
hours spent on the screening and confirmation of Emefele was clear indication
of the importance that the Senate attached to the offices.
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