DEVALUATION OF NAIRA IS NOT AN OPTION – EMEFIELE

Incoming central bank Governor Godwin Emefiele said a devaluation of the naira would be “devastating” for the economy.

The Central Bank of Nigeria’s exchange-rate policy is correct and the regulator needs to ensure Africa’s largest oil producer has a strong currency, Emefiele said in his first public comments since being nominated by President Goodluck Jonathan to the position.

“This is an import dependent economy,” Emefiele, 52, told a Senate hearing today in the capital, Abuja, before the upper house of parliament approved his appointment. “Devaluation is not an option.”

Emefiele, chief executive officer of Zenith Bank Plc, will succeed Lamido Sanusi, 52, whose suspension by Jonathan last month prompted the currency to drop to a record low as investors worried that the independence of the central bank will be compromised. That increased speculation policy makers will devalue the currency by lowering the midpoint of the naira peg from 155 per dollar in the face of dwindling foreign-currency reserves.

Nigeria’s reserves have declined 13 percent this year to $37.9 billion as of March 24. The naira has dropped 2.8 percent against the dollar on the interbank market in the period.

The decline in foreign-exchange reserves is due to a “speculative attack,” Emefiele said.

Emefiele will need to control inflation and steer the economy of Africa’s most populous nation through next year’s presidential election amid pressure to boost government spending, bolster the currency and convince investors of the independence of the central bank.

In its first meeting since Sanusi’s departure, the Monetary Policy Committee, led by acting GovernorSarah Alade, yesterday held its key interest rate at a record 12 percent and increased the cash reserve requirements on private sector deposits to 15 percent from 12 percent, citing the continued need for a tight monetary stance.

Jonathan suspended Sanusi for “financial recklessness and misconduct,” allegations he denied. His removal came after he alleged that billions of dollars of government oil revenue were unaccounted for.

A banker with 26 years of experience, Emefiele became the managing director of Zenith Bank, Nigeria’s second-largest lender by assets, in August 2010 after serving as deputy managing director from 2001.

He has a MBA degree from the University of Nigeria in Nsukka and lectured at the University of Port Harcourt, the institution where Jonathan taught before he entered politics.

Source | Bloomberg

NEW CBN GOVERNOR: SENATE CONFIRMS EMEFIELE

• New CBN gov promises stability, growth and employment

• Bulkachuwa cleared also

The Managing Director/CEO of Zenith Bank Plc, Mr. Godwin Emefiele, Wednesday vowed to ensure economic stability to create jobs and boost growth, as the Senate unanimously approved his appointment to replace Mallam Sanusi Lamido Sanusi as the Governor of the Central Bank of Nigeria (CBN).

Emefiele will take over in June from Sanusi, who was suspended last month by President Goodluck Jonathan on charges of “financial recklessness and misconduct”.
The Senate also unanimously confirmed Justice Zainab Bulkachuwa as the President of the Court of Appeal. Both of them were cleared after hours of grilling by the upper legislative chamber.
First to be confirmed was Bulkachuwa who was not subjected to intense scrutiny as was the case with Emefiele.

But upon entering the chamber, Senate President David Mark had told Emefiele not to expect to leave the chamber in a hurry, adding he would be subjected to special rounds of questioning because he would be leading a very important institution in the country.
Emefiele said in his first public comments since his nomination that he would make macroeconomic stability his watchword and the central bank would work to drive down inflation and interest rates.
According to AFP, he also vowed to maintain a strong exchange rate to build up healthy foreign reserves as well as formulate policies to address fears about unemployment, particularly among young people.

“We will ensure that during this period, if approved by the Senate, that whatever monetary policy decision we take will be those that will lead to improvement in the level of employment,” he said, warning the country was facing an ‘employment emergency’.”
Emefiele added: “Growing the economy of Nigeria is a very important assignment other than just a core mandate of ensuring that we have a stable environment.”
Emefiele also promised to use the development banking model to drive economic growth in the real sector of the economy to the benefit of all Nigerians.

SENATE CLEARS GODWIN EMEFIELE AS CENTRAL BANK GOVERNOR

The senate has on Wednesday, March 26, 2014 confirmed the appointment of Mr. Godwin Emefiele as the next governor of the Central Bank of Nigeria (CBN) barely two months after he was nominated by President Goodluck Jonathan.

Justice Zainab Bulkachuwa has also been cleared as the substantive President of Appeal Court.

Emefiele and Bulkachuwa were cleared after hours of questioning by the committee of the Whole Senate.

More to follow