By Dele Sobowale
“One must show the truth to posterity with boldness and to his contemporaries with circumspection.. Voltaire, 1694-1778, VANGUARD BOOK OF QUOTATIONS, VBQ, P 255.
Unlike the great French philosopher, I strongly believe that truth must be shown with equal candour to all generations. There should be no dichotomy in placing facts before the public – especially for those privileged to be in the media. It has always been our sacred duty to inform, educate and entertain (also sometimes infuriate) the public on every matter of great importance. In about thirty years on these pages, that has been the principle.
It will never change. Right now there is an issue which has suddenly crept on all of us while the election campaigns were going on. None of the two major candidates mentioned it; and it is doubtful if any of the fringe political parties candidates alluded to it. That is strange.
To cut the long story very short, it has been brought to our collective notice that the tenure of the Governor of Central Bank ends in June this year. Mr Godwin Emefiele would have finished his five years tenure by that time. In Nigeria, as elsewhere, it is always a momentous occasion for reasons soon to be explained before also providing the arguments for the extension of Emefiele’s tenure.
“Economists are like theologians..Every religion other than their own is the invention of man; whereas their own particular brand of religion [and economics] is an emanation from God.” Karl Marx, 1818-1883. VBQ p 45,
Permit me therefore to acknowledge that there might be other economists and financial experts, like my colleague, Henry Boyo, who might disagree with the advocacy for tenure extension. That is perfectly in conformance with our profession. Ask ten economists to draw up a blueprint for economic recovery and you receive ten different answers. Each person is prepared to swear, in the name of the Almighty, that his own is the perfect document. I welcome the rejoinders and attacks which might result from this article. It is all in the national interest. As a matter of fact, I abhor tenure extensions. It creates the impression of indispensability; whereas De Gaulle, 1890-1970, said that “The graveyards are full of indispensable people.” This is my exception; wait for the reasons.
On two things we are all certainly sure to agree. The first is that the Governor of any Central Bank controls the monetary policies of the nation and on his judgment depends the economic fate of his country for many years – sometimes for decades. Second, the appointment of the Governor is as important as the election of the President and the appointment of the Chief Justice. He literally controls our economic destiny. It has once been observed that the quickest way to destroy a nation is to destroy its currency. The Governor of the CBN is the guardian angel of our currency. We cannot be too careful about our choice.
Perhaps, we can also agree that for almost eight years, even under Jonathan and Dr Ngozi Okonjo-Iweala, Nigeria has lacked a discernible Fiscal policy consistently applied. Yet, for a country’s economy to fly straight, like a bird, it needs two wings – sound fiscal policy and equally excellent monetary policy. Nigeria’s last three CBN Governors – Soludo, Sanusi and Emefiele – have had to provide more support than usual to the Federal Governments they served in the absence of credible Fiscal policy.
Emefiele inherited an economic management structure which was defective and was never fixed. Even now, what we have is monetary policy doing overtime to make for the mistakes made in the absence of sound fiscal policy. Governors like Soludo, Sanusi and Emefiele are hard to find anywhere in the world. And, when found, they are kept as long as possible under any circumstances. They are begged to stay when there is extreme global and national economic turbulence ahead.
In other more advanced economies the end of tenure of a central bank Governor is filled with so many uncertainties that capital markets slow down and major long term investments are shelved until the uncertainty regarding who will be in charge of the nation’s bank is resolved. That shows how important the decision is. It also demonstrates why the appointment is always controversial – whether the incumbent is asked to continue or somebody else is appointed to replace him.
There are invariably three options available to the President or Prime Minister making the decision whenever a nation is faced with it. The first is to appoint a new Governor – especially if the current Governor was not appointed by the President in the first instance. The second is to extend the tenure without giving a full second term. That occurs when the President has not made up his mind regarding a replacement. The third is to grant a full second term or more. All have been tried before under different circumstances. One Alan Greenspan was the Chairman of the US Federal Reserve Bank for nineteen years, almost five terms for US Presidents, and he served three Presidents. He did not even set a record. Another Chairman served over twenty one years. Remember that as we move along with this narrative. The suggestion is not new.
The decision for any country is always situational. But, Governors of Central banks are retained at the expiration of their tenures whenever two diametrically opposed situations occur in any country. The first is when the economy is experiencing a long period of sustained rapid economic growth. There is no incentive in changing the “Captain” of a winning team. The second occurs when the country is faced with several political, social, and economic uncertainties at the same time and there is no anchor.
At that time, a Governor who had been able to hold the economy and pilot it through near-disasters in the past, and who had demonstrated courage in times of great peril, is generally not substituted by a new and untested hand. There is just too much at risk to bring in a new helmsman. It is under those circumstances that the Alan Greenspans of this world last for years at the top. The man actually took the US through three different global economic crises – each of them different from the others.
“Leadership is always somewhat mysterious. Leadership can be summed up in two words: intelligence and integrity; or to use two synonyms: competence and character.” John Brademas, 1984. VBQ p 125
That also brings us to three crucial attributes of great leaders – including central bankers: competence, character and courage. I got to know that Godwin Emefiele possessed all three in abundance when the naira to dollar exchange rate was racing towards N500 for one dollar and the rates were changing everyday. Everybody was in a panic; manufacturers and importers were perplexed; parents who had kids in schools abroad were thinking of withdrawing them. One of them was a close friend. He came to me almost in tears wanting advice about his kids in school abroad. I asked him to wait until I paid somebody a visit.
For the one and only time in my life, I met Mr Emefiele and asked only three questions – all of which he answered with unusual candour. I walked out of the CBN Headquarters is Abuja that day promising to write an article forecasting the roll back of exchange rates very soon. I told my friend to hang on; that rates were coming down – all based on less than one hour’s discussion. The man did everything he promised to do. Today the rates hover around N360 per dollar.
In almost thirty years writing on these pages, I have met hundreds of top Federal Government officials and I am difficult to fool or please. Mr Emefiele is the first to please me on the three attributes – competence, character and courage — in such a record time.
NEXT: WHY WE NEED EMEFIELE NOW