Emefiele’s CBN Punishing Savers, Spawning Abuses, NESG Says

Tuesday, September 8, 2020

The Central Bank of Nigeria under Governor Godwin Emefiele is pursuing policies inimical to the interests of local investors and savers while spawning foreign-exchange abuses, according to the Nigerian Economic Summit Group, a leading private sector policy lobby.

The NESG, as the group is known, said in a statement on Tuesday that it was concerned about “distortions in the liquidity and interest rate management of our financial system” that have made losers out of pensioners and domestic investors.

“This will occasion major disincentives to savings and investments and thereby, be a disadvantage to Nigerian pensioners and long term savers,” the NESG said in the statement.

The central bank denied the allegations.

NESG’s tweet

The group, which comprises companies in manufacturing,  construction, banking and other service sectors and industries, slammed the central bank’s exchange-rate management and intervention fund disbursements as lacking clarity.

“This can be subject to abuses, manipulations and significant market disruptions, reflective of a policy akin to crony capitalism,” NESG said, calling for urgent steps to restore credibility to Nigeria’s financial system.

Under Emefiele, the CBN has operated a multiple exchange-rate system critics said has proved lucrative to the “well-connected” able to obtain foreign currency at cheaper official rates and sell at a premium in the parallel market.


For a group whose members should be beneficiaries of monetary policy,  the NESG statement represents a total repudiation of Emefiele’s policy trajectory at the central bank and a vote of no confidence.

The NESG further takes up issues with the Bank and Other Financial Institutions (Amendment) Bill recently passed by the national legislature that, among other things, seeks to grant immunity to central bank officials for their actions while in office, urging President Muhammadu Buhari not to sign the bill.

“These are draconian, totalitarian and inimical to the development of a stable and transparently regulated financial sector,” the NESG said. “We respectfully request that the President should please withhold his assent.” 

The central bank responded swiftly to the NESG’s statement, dismissing their concerns as “bourgeois” and “a false alarm.” The CBN burnished its record of efforts to protect the economy and the financial system despite a more than 60 percent plunge in revenue occasioned by the coronavirus pandemic.

CBN responds.

The CBN said there’s nothing new in the provisions being questioned in the amended bill as they were contained in previous versions of the law. The regulator accused the summit group of exaggerating the import of those clauses merely intended to protect officials from litigation for actions taken in obedience to their duties.

“”The false alarm raised by the Nigerian Economic Summit Group raises serious credibility questions on the actions of the group,” Isaac Okorafor, CBN spokesman, said in the statement. “Its comments, which have been circulated across the globe, significantly harmed the credibility of the Governor and the CBN as an institution.”

Updated Wednesday, September 9, 2020.