Godwin-Emefiele

Just as parents punch below their weights and sometimes limit the destiny of their children by seeking jobs for them in these places – even at the expense of doing away with the family name – so also have many Nigerians decided to reduce a serious matter to the tiny objective of removing CBN Governor Emefiele.

As it morphs from egg, larva, pupa to imago, there comes a time when the butterfly becomes an ugly caterpillar. Call that the pupa stage. A close observer will realise that after a while, the caterpillar stops crawling all over the place and freezes up. In a week or two, a crack appears in the shell of the caterpillar and something starts to wriggle inside that shell. If one were to show so much love for the butterfly, by helping to free that creature from the shell, what will emerge is a formless ugly moth, which dies off quickly; not a butterfly. The process of wriggling is the process by which a butterfly forms its beautiful colourful wings.

Lesson: After sending our children to the most expensive schools, we should be careful how we shepherd them into jobs and do everything else for them. Many times, these overprotective acts preclude them from blossoming mentally and growing beyond us, their parents. This may be the reason why some people live under the shadows of their fathers all through their lives, rather than be known for their own achievements.

The only way Nigeria will be great is when we lift up as many people as possible from poverty, not when we create new class segregations.

The recruitment saga in the Central Bank of Nigeria is indeed a serious matter that cannot be brushed aside or wished away. It is serious because, somehow, the CBN has been turned into a Rich Kid’s Club, as politicians and men of power in Nigeria wangle their children into positions at the Apex bank. When such things are going on, nobody cares how it all looks in the end. But it all culminates in a class statement whereby the noveau riche seek to create and maintain a newfound blue bloodline. On some occasions, they start to deliberately match-make their children. We have written about the futility of these acts in the past. The only way Nigeria will be great is when we lift up as many people as possible from poverty, not when we create new class segregations.

Not Only at CBN

It needs be noted though that this phenomenon whereby the children of the superrich (most of who have fed off this country through corruption) get the choicest jobs, is not limited to the CBN. It is present in every other parastatal in Nigeria. None of them will be willing to release their staff list for public scrutiny. And that is probably where the corruption war falls flat on its face. When favours are being exchanged in this manner, how strict can anyone be? Like we have seen in recent times, the politicians merely gang up against the rest of us, while feathering their own nests. And in the case of CBN, this practice did not start with Emefiele. Information at our disposal shows it was more rampant under Emir Sanusi, who employed so many young people, perhaps in a bid to dilute the age profile of CBN staff. People complained then too, but nothing happened.

One problem is that, as usual, you can take a horse to the stream but cannot force it to drink water. So, many of those rich kids are not ‘feeling’ the job – if I may use their own lingo. Most of them would rather be out playing music and getting famous like other children of the rich such as Naeto C (Kema Chikwe’s son), Falz the Badh Guy (Femi Falana’s son), or DJ Cuppy (Femi Otedola’s daughter). They have also seen how easy it is for Olamide to shake hands with President Buhari and put his hand around VP Osinbajo’s neck, so in this age where things move so fast, they are not ready to put in 25 years of silent, slow drudge in a single organisation just to become Principal Manager! What is more, it is important to consider the psychology of this illegal recruitment, because most of these children were probably made to drop their surnames – if what we have read in newspapers are true. Ejike Emmanuel Ibe is alleged to be Emmanuel Ibe Kachikwu’s son, while Nagode Abdulrahman is Abdulrahman Dambazau’s son, among others.

Some of them who know their parents are extremely corrupt, become rebels just because they are unable to process that criminality and their own vicarious culpability in it.

How are these children expected to process this new wonderful appointments knowing that they had to make this ‘sacrifice’? These children are more emotional than we who grew up in a different era and setting. The fact that they had to go through this unorthodox process will affect their productivity because many of them will feel like they are being made to do something illegal (dropping their surnames), after living a well-protected life thus far. I have heard how some of these teenagers google the names of their fathers to see who has a criminal/corruption record or what their parents have been up to, as documented on the internet. Some of them who know their parents are extremely corrupt, become rebels just because they are unable to process that criminality and their own vicarious culpability in it.

There is also the phenomenon in most of Nigeria’s well-paying parastatals, whereby retiring parents ensure they replace themselves with one of their children. Some get greedy. In one parastatal, a retired GM inserted four of his children in different departments where they are largely jobless. On many occasions, father/mother and children start working in the same organisation, usually at different branches. A keen observer will notice these ‘children’ (that is what I will call them) constantly outside the premises of these organisations, taking ‘smoking breaks’, the way they are used to abroad where most of them studied. Others are busy gallivanting from one desk to the other, ‘toasting’ their fellow ‘ajebota’ colleagues. The girls are usually the more serious-minded of the lot. Many of the boys are more interested in driving ‘popsie’s’ most expensive SUV to the office so as to catch attention. It is not easy to be a big-man’s child. Really, I mean it! Don’t laugh!

It used to be that in this country, children of the rich and poor went to the same schools up to university level, and the bright ones floated to the surface or at least had a fair chance of getting on in life irrespective of parental background. I believe the current situation is deliberate, and that the Nigerian elite wants Nigeria to evolve exactly in this manner.

Unfortunately what this ugly phenomena, in which senior staff and politicians/political appointees hijack the recruitment process by intimidating HR and Chief Executives to employ their children and wards, does is to totally mess up the system and widen the gap between the rich and the poor. We are also aware of the entrenched culture whereby for every advertised recruitment, senators and Rep members send very long lists that must be prioritised or else..! Applicants who don’t know these big men know that they are merely wasting time applying for such jobs. It used to be that in this country, children of the rich and poor went to the same schools up to university level, and the bright ones floated to the surface or at least had a fair chance of getting on in life irrespective of parental background. I believe the current situation is deliberate, and that the Nigerian elite wants Nigeria to evolve exactly in this manner.

There is even a business sector that has emerged around this problem. In one of Nigeria’s currently embattled parastatals, I was made to know that a senator once took the CV of one of Baba Buhari’s daughters there for employment. His whole quest was to be in Baba’s good books, nothing else. Who will save this country from itself?

Shall We Sack Emefiele?

Just as parents punch below their weights and sometimes limit the destiny of their children by seeking jobs for them in these places – even at the expense of doing away with the family name – so also have many Nigerians decided to reduce a serious matter to the tiny objective of removing CBN Governor Emefiele. If we want to remove CEOs, why not push for the removal of ALL CEOs in all Nigerian parastatals? Why are we turning this again into a ‘na-who-dem-catch-be-barawo’ matter? And true to our nature, Nigerians are bringing out the tyres, kerosene, petrol and matches, really to get their regular kicks of lynching a singular person while passing up on a greater opportunity of making a profound change in society.

Some of these parastatals – like the CBN, those in telecoms, health, even education – are professional organisations and the focus should be on getting thoroughbred professionals to run them, and ought not to be about the ethnicity or religion of those who are meant to take Nigeria to the next level.

Why are we not pushing for a broad reform of the recruitment process – starting with a law that mandates all positions to be made open and competitive? The Federal Character Commission is mentioned in the same controversy, and it stated recently that it did not grant any waivers to CBN as claimed. But the FCC is only interested in how many Yorubas, Igbos, Hausas, Ijaws and other minorities are employed in a parastatal. Some of these parastatals – like the CBN, those in telecoms, health, even education – are professional organisations and the focus should be on getting thoroughbred professionals to run them, and ought not to be about the ethnicity or religion of those who are meant to take Nigeria to the next level.

As regards sacking Emefiele, my take is that Buhari shouldn’t touch it. Simple. Why? Let me try and list out some reasons:

1. The CBN is meant to be fairly independent. If, going by what Mallam Garba Shehu the Presidential Spokesman said recently, the president left most PDP appointees in their positions because he wanted to see which of them would key into the ‘change mantra’, indeed the last appointee the president should think of removing, under any circumstance, is the CBN governor. The idea behind the independence of the Central Bank governor is an international one, not without its flaws and limitations. The whole idea is to create an impression of stability and to prevent politicians, who may not be versed in economic policy, from tossing the economy in different directions. It will not cost Nigeria anything to maintain such a policy. If at all, let the president start by removing all other CEOs who are still observing their tenure – for indeed these other CEOs have committed the same sin (political employments), even if in varying degrees.

One of the approaches I have recommended for the Central Bank going forward – especially as it pertains to the management of the naira – is that the CBN should speak less and not allow speculators to know what it can come up with the next time. So, on the basis of personality, Emefiele should not be removed.

2. Flowing from 1 above is the fact that the last CBN Governor was unceremoniously removed. We fought against it then and felt it was unfair. Now, even though Emefiele was the ‘beneficiary’ of Sanusi’s misfortune, he has carried himself with enough decorum such that revenge needn’t be visited on him. The thing is that we do not have to institute a culture of removal of CBN governors midway into their terms. Since the term of each CBN governor will overlap into new regimes, removing Emefiele may create an incentive for whoever comes after Buhari to also remove the new appointee midway. This will usher in a period of instability, with monetary policy – and whatever good thing the CBN can do – firmly in the pockets of politicians. I would suggest he be allowed to serve out his term.

3. Who is Emefiele? If Soludo and Sanusi were vocal as Central Bank governors, it is widely held that Emefiele is not. Many consider him as quiet. Those who detest him say he is timid. But an objective observer will note that the constant interactions of Sanusi with the press became a disadvantage in his time. There isn’t much wrong with having someone with a quieter disposition this time. Alan Greenspan served as Federal Reserve Bank Chairman for 19 years (1987-2006). He wasn’t known to talk much. Rather, for every short speech he made, analysts and newspapers sought to interpret each word or emphasis in order to know where the FED was going. One of the approaches I have recommended for the Central Bank going forward – especially as it pertains to the management of the naira – is that the CBN should speak less and not allow speculators to know what it can come up with the next time. So, on the basis of personality, Emefiele should not be removed.

The Problem With Monetary Policy

There are many Nigerians who believe they will make a better CBN governor. Maybe it’s about the power. I hear the CBN governor is so called because he sits on more money than any state governor could dream of. But it is also a permanently controversial position, especially as our economy has become more interlinked with globalisation. For months, in the beginning of this present administration, the CBN alone ran the economy, culminating in hyperactivity in creating intervention funds for several sectors of the economy. The CBN ran fiscal policy, even though it is ill-equipped to so do. In an economy like ours, that is courting trouble.

But even in developed economies, the work of the Central Bank often results in messy controversies, such that no governor goes unscathed. In the UK for example, Mark Carney, the current governor of the Bank of England has been recently criticised for supporting immigration, and more importantly for being against Brexit (total exit of the UK from the European Union). If things go awry, he will get the blame. Before Carney, Governor Mervyn King was criticised for being too strong. And it was under him that the financial meltdown of 2008-2010 occurred with many of the banks in Canary Wharf and the City of London writing off huge amounts in bad loans resulting from some crazy derivative products like Credit Default Swaps.

So, to that person with the great economic degree and ‘pedigree’, who believes he is the best CBN governor Nigeria has never had, I say, take caution. For your knowledge may fail you. As a matter of fact, I’m beginning to think the principal attribute a Central Bank governor must now have, is humility. For many great economists have fallen on their own sword in those positions.

In the U.S., the current FED Chairwoman, Janet Yallen, has been criticised strongly for being too secretive, for not following a rule-based approach with monetary policies, for not making friends easily with politicians, and for hinting about the possibility of future bank bailouts. Even the Quantitative Easing strategy, which many believe was able to bail out the U.S. economy from a deep recession, by infusing liquidity into the system, has been criticised for focusing too much on banks, for causing inflation due to the same liquidity injection, for causing devaluation in the currency and so on. Banks were equally accused of not lending out to the business sector, for they rather held on to such liquidity to improve their balance sheets. Before Yallen, Greenspan who was once nicknamed “The Oracle” for his stoicism and occasional appearances, was later renamed “Mr. Bubble” and “The Undertaker”. The old man could not believe his ears when he was said to be ‘out of touch with the real world’ by Representative Bernie Sanders in 2003. Today, many analysts write of Greenspan and call him ‘idiot’, including, shockingly, Paul Krugman. Before Greenspan, 6foot9 Paul Volcker was criticised and excoriated for the effect of the Volcker Rule, which basically ‘put the stuffing in the turkey’ for banks when he deregulated interest rates and bonds became tradable like shares – and even more actively.

So, to that person with the great economic degree and ‘pedigree’, who believes he is the best CBN governor Nigeria has never had, I say, take caution. For your knowledge may fail you. As a matter of fact, I’m beginning to think the principal attribute a Central Bank governor must now have, is humility. For many great economists have fallen on their own sword in those positions. The paradox is how does he maintain such humility in the face of temptations and those who will want to challenge his powers since much money is at stake? How does one combine humility and a willingness to learn, with a resolve not to be taken for granted?

The work of the Central Bank is often hit-and-miss. A good central bank is one that is quick to reverse itself when on an obviously wrong course. Policy reversals are the order of the day. There are often no right and wrong answers; no hard and fast rules.

Monetary policy is tricky for several reasons. First in a country like Nigeria, it hardly works as intended. The recent decision of the Monetary Policy Committee to increase the MPR to 12% from 11% is being criticised as a disincentive to business. But the truth is that even the CBN knows that banks are not so sensitive to its MPR. This it admitted in its penultimate MPR meeting communiqué. The idea behind this increase may be to increase deposit rates and narrow the spread that banks are taking on their customers (if the banks will oblige, that is). It may not have commensurate reductive effect on inflation because the current inflationary spike is the result of recent exchange rate policies. The work of the Central Bank is often hit-and-miss. A good central bank is one that is quick to reverse itself when on an obviously wrong course. Policy reversals are the order of the day. There are often no right and wrong answers; no hard and fast rules.

And every policy, without exception, has a bitter cost.

Economics, Central Banking, and ‘Lemmas’

In Economics, we always talk about lemmas. A lemma is an unresolvable problem, usually a formula that is hard or impossible to explain, such as Ito’s Lemma – a component of the Black Scholes formula used in pricing Options. Yes, Lemmas are confusing, but let me explain how they relate to central banking.

We often talk about Trilemmas, meaning a situation whereby given three policy options, a central bank has to choose two. It is accepted that a central bank cannot achieve exchange rate stability, free flow of capital, and national monetary policy independence. One has to give. This is called the “Impossible Trinity”. We talk of quadrilemmas, quintulemmas, even octolemmas. You cannot achieve low inflation, low unemployment, a strong currency, a strong real sector, a strong banking system, a liberal exchange system, strong trade balances with booming exports, all at the same time. Some goals just have to give. No one should talk as if they can achieve the impossible. For example, importers and Bureaux de Change have cause to complain today, but really, where will the money come from to liberally dole out for feeding our excesses? So we are seeing our currency weakening, and inflation rise, but on the flip side, we have slowed down the descent to full-blown cataclysm, encouraged some local manufactures and farmers, and improved trade balances somewhat. Central banking is indeed the foolish act of committing to do the impossible, leading to embarrassing conclusions.

I have never met Emefiele before, but those supplying different types of used e-tyres, e-petrol and e-matches, for their next e-lynching should just take it easy. Enough of the noise already! Nigerians should learn to rally around the bigger issues always.

Let me close by stating that I hate bullying. Especially when someone who is quiet and almost defenseless is being rained upon. On a recent visit to Aso Villa, some friends told me of seeing Emefiele climbing the stairs to the VPs office. They said he looked like the weight of the world was on his shoulders. No one likes being sacked from a position, and no one enjoys being daily lampooned, lied against, castigated and excoriated, especially when they still have hope of making an impact. I say let us leave the man alone to do his work. Let our ‘best ever CBN governors’ wait for their turns. I have never met Emefiele before, but those supplying different types of used e-tyres, e-petrol and e-matches, for their next e-lynching should just take it easy. Enough of the noise already! Nigerians should learn to rally around the bigger issues always. They say small minds talk of people, average minds of events, but great minds, talk about ideas. We have many great ideas upon which we can unleash our anger. Why reduce ourselves to people who lynch defenceless countrymen? Nigerians should learn to take on opponents their size. And hey, we have many of such issues to deal with.

‘Tope Fasua, an economist and consultant, is CEO of Global Analytics Consulting.