Central Bank Would Work to Drive Down Inflation and Interest Rates – Newly Confirmed CBN Governor

The Managing Director/CEO of Zenith Bank Plc, Mr. Godwin Emefiele, Wednesday vowed to ensure economic stability to create jobs and boost growth, as the Senate unanimously approved his appointment to replace Mallam Sanusi Lamido Sanusi as the Governor of the Central Bank of..........................

Nigeria (CBN).

Emefiele will take over in June from Sanusi, who was suspended last month by President Goodluck Jonathan on charges of “financial recklessness and misconduct”.
The Senate also unanimously confirmed Justice Zainab Bulkachuwa as the President of the Court of Appeal. Both of them were cleared after hours of grilling by the upper legislative chamber.
First to be confirmed was Bulkachuwa who was not subjected to intense scrutiny as was the case with Emefiele.

But upon entering the chamber, Senate President David Mark had told Emefiele not to expect to leave the chamber in a hurry, adding he would be subjected to special rounds of questioning because he would be leading a very important institution in the country.
Emefiele said in his first public comments since his nomination that he would make macroeconomic stability his watchword and the central bank would work to drive down inflation and interest rates.
According to AFP, he also vowed to maintain a strong exchange rate to build up healthy foreign reserves as well as formulate policies 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’.”
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.”
Emefiele also promised to use the development banking model to drive economic growth in the real sector of the economy to the benefit of all Nigerians.

"We would ensure that we work with the manufacturing companies to ensure that we improve on their level of production and ensure that we improve and achieve economic growth in Nigeria.
"The development banking model is a model has been tried and tested in different jurisdictions in the world. In fact, in some of the frontier and the emerging markets in the world, we have seen different development banks used as a tool for industrialisation growth and development," he said.

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 (GDP) are announced next month.
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 central bank said on Tuesday.
Emefiele was very meticulous in responding to the questions, as he ensured that issues on the economy were adequately dealt with while evading political questions.

This compelled senators to repeat different questions over and over with a view to tricking him.
But after much pressure to answer such questions, most of which centred on whether he would sustain the alleged recklessness of his predecessor, Emefiele said: “I will not spend any money in contravention of the law. I will plead that you allow me yield on the issue of monies because these matters are in the court and I don't want to make any statement that would be seen to be subjudice.”
Emefiele, who said he would do everything within his reach to bring down high interest rates, also said he did not share the idea of both the Ministry of Finance and CBN working at cross purposes.

He said: “The Central Bank of Nigeria is the monitory 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 work in opposite directions, what you will find is that we are not going to be able to achieve economic growth and the development that we are talking about. It is important that both the Ministry of Finance and the central bank move in one direction."
Emefiele also promised to ensure that the dollarisation of the economy is not allowed to thrive in Nigeria at the expense of naira, saying he would ensure that Nigerian economy is not “dollarised”.

“I think one of the core mandates of the central bank is to ensure that we maintain a legal tender and ensure that whatever is done, our own naira has to be used as a legal tender. I will take it as a primary responsibility to ensure that the attempt to dollarise the Nigerian economy is discouraged. We should not allow it because it would create problems for the economy,” he said.