President Tinubu Suspends CBN Governor Emefiele and Launches Probe
In a surprising move, President Bola Tinubu has suspended the Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, from his position. The suspension comes amidst an ongoing investigation into the operations of the CBN and planned reforms in the country’s financial sector. Emefiele has been directed to hand over his duties to the Deputy Governor (Operations Directorate), Mr Folashodun Adebisi Shonubi, pending the conclusion of the investigation and reforms.
Reports emerged that operatives of the Department of State Services (DSS) had arrested the suspended CBN governor, although the DSS spokesperson could not confirm the arrest. It is speculated that Emefiele would have faced arrest during the previous administration, but he was protected. Emefiele, who assumed office as CBN governor on June 4, 2014, previously faced allegations of terrorism financing and economic crime in January 2023.
The Authority to Suspend:
The power to terminate the appointment of the CBN governor lies with the President, but it requires the support of a two-thirds majority of the Senate. The CBN Act also states that the governor, deputy governor, or director of the CBN can be removed if they serve as a lawmaker or a bank director, or if they are convicted of a criminal offense, mentally incapacitated, guilty of serious misconduct, disqualified or suspended from practicing their profession, or declared bankrupt.
Emefiele’s Controversial Policies:
Emefiele faced criticism for implementing the naira redesign policy, which caused tension and uncertainty. The then Minister of Finance, Budget, and National Planning, Zainab Ahmed, expressed her lack of consultation and awareness of the policy. The policy aimed to manage inflation, combat currency counterfeiting, and address ransom payments. Additionally, the CBN’s cash swap program faced challenges, leading to the old naira notes remaining in circulation and fuel scarcity across the country.
Public Reaction and Economic Impact:
Emefiele’s policies resulted in the loss of an estimated N20tn, protests, and destruction of bank facilities. Many Nigerians, including economists and analysts, called for his dismissal. Critics argued that Emefiele’s monetary policies caused Nigerian businesses to suffer, inflation rates to soar, and the exchange rate to weaken. The suspension of the CBN governor was expected by some, who believed a thorough investigation should be conducted, and a competent individual should take charge of the position.
Analysis and Implications:
Economists and analysts expressed concerns about the potential impact of suspending CBN governors, as it may undermine the independence of the institution. However, others believed that Emefiele’s performance warranted his suspension, and they welcomed the decision. The differing monetary policy beliefs between Emefiele and President Tinubu contributed to the suspension.
Some legal experts argued that Emefiele’s suspension was not in line with the law, as the President cannot remove the CBN governor without the Senate’s involvement. However, others stated that the President has the constitutional right to suspend the governor and that it is within his prerogative.
Comparison to Past Events:
The suspension of Emefiele is reminiscent of the suspension of the former CBN governor, Lamido Sanusi, by President Goodluck Jonathan in 2014. Sanusi was suspended after exposing alleged theft in the petroleum ministry.
President Tinubu’s suspension of CBN Governor Emefiele has raised various reactions among experts and the public. While some argue that the suspension is necessary given Emefiele’s performance, others express concerns about the potential consequences for the independence of the CBN. The investigation and reforms in the financial sector will shed