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The nomination of Dr. Olayemi Michael Cardoso to serve as the new Governor of the Central Bank of Nigeria (CBN), by President Bola Tinubu is expected to lead to improved synergy between monetary and fiscal policy, among others, according to analysts MoneyCentral spoke to.
Here are some of their thoughts on the new CBN Governor, Cardoso:
“I think he is a good choice, going by his knowledge and antecedents both in private and public service. In addition, I expect there would be a good handshake between the monetary and fiscal authority, having previously worked closely with Mr. Wale Edun,” Abiola Rasaq, economist and former Head Investor Relations for United Bank for Africa (UBA), told MoneyCentral.
“I also do expect that the government would ensure that Mr. Godwin Emefiele duly resigns his appointment or seek gardening leave as previously rumored before the effective date of new the CBN Governor, to avoid violation of CBN Act and other extant statutory provisions guiding the appointment of the CBN Governor. Whilst it is not out of place to cite previous removal and appointment of a new CBN Governor, a seemingly bad precedence should not be built on to avoid legitimizing wrong doings. More so, the circumstances are slightly different, with respect to the remaining term in office, hence I do hope and expect that the government would do the right thing in ensuring a legitimate, legal and statutorily correct transition,” Rasaq said.
The head of an investment banking unit of a major financial services firm said:
“Hopefully, he is able to take tough decisions, including taking relevant reforms for enhancing the financial system, without fear or favour of any of his acquaintances, including possibilities of erring the interests of some political bigwigs across the divides.”
According to a press statement by presidential spokesman, Ajuri Ngelale, on Friday evening, Cardoso will serve for a term of five (5) years at the first instance, pending his confirmation by the Nigerian Senate.
“This directive is in conformity with Section 8 (1) of the Central Bank of Nigeria Act, 2007, which vests in the President of the Federal Republic of Nigeria, the authority to appoint the Governor and Four (4) Deputy Governors for the Central Bank of Nigeria (CBN), subject to confirmation by the Senate of the Federal Republic of Nigeria.
“Furthermore, President Bola Tinubu has approved the nomination of four new Deputy Governors of the Central Bank of Nigeria (CBN), for a term of five (5) years at the first instance, pending their confirmation by the Nigerian Senate,” he stated.
The new Deputy Governors include Mrs. Emem Nnana Usoro, Mr. Muhammad Sani Abdullahi Dattijo, Mr. Philip Ikeazor, and Dr. Bala M. Bello.
“As regards capacity, we believe he does have the capacity and perhaps the only risk we see to his performance and reform impact on the economy is politics, which i do hope he would be able to depoliticize the CBN as an independent institution, with hope of enhancing CBN status to its deserving level,” a senior banking source told MoneyCentral.
One major area for the new CBN Governor to fix with close synergy with the Finance Minister Edun, would be the illegal financing of the Federal Government which is driving up inflation.
The central bank, which published the multiple annual financial statements on its website on Aug. 9, also showed it vastly exceeded the limit placed on its lending to the government, which is capped by statue at 5% of federal revenue.
Based on the actual government revenues of N5.05 trillion ($6.5 billion) at the end of 2021, it should not have lent more than 252 billion naira to the government in 2022. Instead by the end of December 2022, the Bank had advanced a total of 23.18 trillion naira to the government.
This “exceeded the statutory limit by 22.9 trillion naira” the bank said in the statement
“Indeed, a lot of clean ups and surgery clearly awaits the new team and I do hope they get their hands dirty is doing a great job, with neither stains nor oil spills on Nigerians. It would not be a smooth ride, and I do hope that everyone braces up for the roller coaster ride, albeit, we should have a good landing and hopefully it’s not too long a haul to ensure Nigerians keep the hope alive,” Rasaq concluded.