Nigeria has lined up a relative unknown to head its central bank after the outspoken former governor was suspended, causing shockwaves in Africa’s second-largest economy and markets to wobble.
Zenith Bank boss Godwin Emefiele had almost no profile outside the banking sector until his name was put forward to succeed Lamido Sanusi, who was removed over charges of financial recklessness.
Sanusi had been embroiled in controversy for months after he accused the state Nigerian National Petroleum Corporation (NNPC) of misappropriating $20 billion (14.5 billion euros) of public funds.
The former governor, whose term was due to expire in June, was widely applauded by local and foreign economists for overhauling a rotten banking sector and stabilising the currency.
But his views on alleged corruption earned him powerful political enemies. The presidency explained his suspension as the result of financial imprudence at the helm of the apex bank.
Market watchers said Emefiele’s nomination came as a surprise, as his name had not previously featured among likely contenders for the top job — and because he had a contrasting character to Sanusi.
“It’s one appointment that was least expected, not because Emefiele is not qualified,” Sola Oni, a former spokesman for the Nigeria Stock Exchange, told AFP.
“In fact, he has both the academic and professional pedigree to do the job.
“I think the president decided to appoint someone who will not rock the boat, a dark horse who is not given to controversies and cheap publicity.”
– Hard-working, conservative –
Emefiele, 52, has had a distinguished career in banking, joining Zenith at its launch in 1990. He has been managing director since 2010.
His appointment still has to be rubber-stamped by parliament but Oni said Emefiele was a “team player” who strikes a balance between implementing sound monetary policies and financial system stability.
“As a conservative person, we expect a regime of tight monetary and fiscal control that will keep inflation in check as well as stabilise the naira,” he added.
As for Sanusi, even after his suspension — effectively a sacking given the short space of time for an official inquiry to report into the claims against him — he has continued to speak out.
He maintains that President Goodluck Jonathan does not have the power to fire him and has gone to court to block the move, as well as claiming the head of state was surrounded by corrupt cronies.
But that has only emboldened his critics, who argue that he was wrong to publicly criticise the executive.
“Central bank chiefs all over the world are conservative,” said Lagos economist Abolaji Odumesi. “They are to be seen and not to be heard.
“Sanusi was talking too much to the extent that he talked himself into trouble,” he added. He called the former governor “very imprudent” for not realising the effect of his words on the markets.
“He was behaving like a member of the opposition,” said Odumesi.
Nigeria’s markets reacted negatively to Sanusi’s removal, with the naira losing ground to the US dollar, while most equities, particularly bank stocks, dipped to an all-time low.
– An experienced, safe pair of hands –
Observers now expect a more measured approach once Emefiele takes over from Sarah Alade, Sanusi’s deputy who is at the helm as an interim figure.
“The new governor is an introvert who does not play to the gallery like Sanusi,” said Odumesi.
Zentih Bank researcher Marcel Okeke said his boss would bring an impressive record to his new job, which will likely coincide with Nigeria becoming Africa’s biggest economy once its GDP is statistically rebased.
“Mr Emefiele is very hard-working, honest, meticulous and to a large extent a workaholic who believes in positive results,” he said of the former university lecturer.
But he said it would be wrong to see Emefiele as new to the central bank and its workings, having chaired a Central Bank of Nigeria committee on Nigeria’s roll-out of biometric identity cards.
“He is quite calm, cool and collected. He does not chase publicity. He believes his work and performance should speak for him,” he added.
Okeke said the task before his boss is daunting such as a stable exchange rate, low inflation, sound monetary and fiscal policies as well as a robust and sustainable economic growth.
Odumesi and Okeke said Emefiele faced the same challenges as any other CBN governor, expecting him to push tight monetary and fiscal policies to stimulate growth and try to keep a lid on inflation.