Buhari Considering New Central Bank Governor When Emefiele’s Term Expires in June

March 6, 2019 BusinessTrumpet

Nigerian President Muhammadu Buhari has come under pressure from his political allies to replace central bank Governor Godwin Emefiele when his term ends in June, according to people familiar with the matter.

While Buhari has yet to make a final decision, he is mulling replacing Emefiele, a southerner, with a northerner, according to two people, who asked not to be identified as the matter is private. Emefiele would want a second term if he is offered it, one of the people said. Since the end of military rule in 1999 no Nigerian central bank governor has served more than one term.

Emefiele sent a letter to Buhari informing him that his term ended in three months, according to one of the people. Buhari replied thanking Emefiele for his service, but without giving more details, the person said.

Calls to Emefiele and Isaac Okorafor, his spokesman, weren’t answered. Femi Adesina, a spokesman for Buhari, declined to comment.

Africa’s biggest oil producer is split roughly evenly between a mainly Christian south and Muslim north, and senior public positions are sometimes rotated between the two. Buhari is a Muslim from the north of the country.

Emefiele, 57 and a Christian, succeeded Lamido Sanusi, a Muslim northerner, in 2014. He was appointed by former president Goodluck Jonathan, a southerner who Buhari beat in an election in 2015. The two forged a strong relationship when Buhari came to power. Emefiele’s moves to boost farmers by imposing import restrictions on agricultural products and to shore up the naira with capital controls found favor with Buhari.

Buhari was re-elected last month. His main rival, Atiku Abubakar, had said he would remove Emefiele and float the naira, which both the governor and president have consistently spoken out against.

Emefiele has faced pressure from politicians to help the anemic economy by reducing interest rates. He’s resisted, saying that high rates are necessary to protect the naira. He also introduced a system of multiple exchange rates, which the International Monetary Fund said deters foreign investors.

The exchange-rate regime probably won’t be changed if Emefiele goes, Charles Robertson, Renaissance Capital’s London-based chief economist, said in a note to clients Tuesday.

Reuters reported the potential departure of Emefiele earlier. The naira weakened 0.4 percent to 361.04 per dollar at 7:16 a.m. in Lagos Wednesday.

SOURCE: BLOOMBERG