(Bloomberg) -- Nigeria’s central bank governor wants to run for president of Africa’s most populous country -- and keep his position while on the campaign trail.
Godwin Emefiele asked a court last week to allow him to retain his apolitical post while running to replace Muhammadu Buhari as Nigeria’s president in elections scheduled for next February. For Emefiele, 60, winning would be the capstone of an unorthodox tenure directing monetary policy in Africa’s biggest economy, where he has focused on propping up the naira, shoring up government finances and lending money to farmers, traders and the Nollywood film industry.
Emefiele has been an official member of the ruling All Progressives Congress since February 2021 according to local media reports, though he hasn’t publicly acknowledged it. A central bank spokesman did not answer two calls to his mobile seeking comment.
Amaka Anku, Africa director at the Eurasia Group consultancy in Washington, said Emefiele’s “controversial tenure” left “many observers within and outside government feeling that he routinely over-reached the mandate of the central bank and took over fiscal policy without adequate coordination with fiscal authorities.”
Under his watch, the Central Bank of Nigeria’s policies have largely aligned with Buhari’s goals -- including maintaining multiple exchange rates to support the naira and instituting a ban on access to foreign exchange for imports of dozens of goods from rice to cement, in an effort to boost domestic production.
Over the past seven years it hasn’t been uncommon to find Emefiele at the opening of cattle ranches set up for nomadic herdsmen funded with central bank money or unveiling pyramids of rice in Abuja, the nation’s capital. During an international soccer tournament, he announced to the national team that a group of prominent businessmen would shower them with hundreds of thousands of dollars if they won.
The central bank’s foreign-exchange policies have been criticized by some economists, who argue that they exacerbated recessions sparked by oil price crashes in 2015 and 2020. Limits on access to dollars have left portfolio investors waiting months to repatriate funds, while companies have had trouble paying foreign suppliers and lenders.
Read more: Africa’s Biggest Oil Producer Has a New Presidential Contender
The central bank governor’s entrance into the race will have deep implications for investor confidence and raises questions about the aims of the various interventions he has implemented, said Cheta Nwanze, a lead partner with Lagos-based consultancy SBM Intelligence.
“His attempt to run for president has shattered the integrity of the position, and it will take a long time to come back from this,” said Nwanze, a critic of the Buhari administration.
Yields on Nigeria’s bonds maturing in 2032 spiked to 11.8% as at 4.30 p.m on Monday, the highest since May 2020 after news of Emefiele’s suit emerged.
Emefiele’s defenders argue that his policies have helped to diversify Nigeria’s economy away from oil and stave off a worse economic crisis.
Hard Line
A former executive at Zenith Bank, Emefiele has at times taken a hard line with his ex-colleagues in the industry in an effort to push them to do more retail lending, something few Nigerian banks do. The central bank also aggressively pursued MTN Group Ltd., the country’s biggest mobile provider, issuing an $8.1 billion fine in 2018 over what the company’s defenders said was a technicality. MTN ultimately paid $53 million to settle the fine.
The governor has been coy in public about his intentions, saying in weekend tweets that he had not yet decided whether to run and “This is a serious decision that requires God’s Divine intervention: in the next few days The Almighty will so direct”. But the lawsuit, filed two days earlier, makes clear his intentions - it states that he “desires to contest elections” and “has aspiration to seek election to the office of President”.
In the suit, Emefiele’s lawyer argues that the governor is “being daily called upon to seek election to the office of the president” under any party’s banner.
There is a quadrennial tradition in Nigeria of politicians being begged by largely faceless support groups that crop up as campaign season ramps up. As with other potential nominees, billboards bearing Emefiele’s image have popped up, along with cars with his name and face emblazoned on them.
Emefiele does not have the political machinery to win the party ticket or actual election, Michael Famoroti, the chief economist for Stears Data in Lagos said by phone.
“It will be different if the president wants him to replace him,” Famoroti said. “But there are other people we know that have closer relationships with the incumbent right now.”
©2022 Bloomberg L.P.
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