'Tooni Ajiboye’s grouse with Godwin Emefiele
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One of the first things 'Tooni Ajiboye tells me on the phone is that he is not an economist. Just a public commentator or, if I preferred, a roadside economist. “So take what I say with a pinch of salt,” he adds. But ‘Tooni, a regulatory compliance analyst who works at a leading Nigerian law firm, has written extensively about the Central Bank and its much-maligned czar, Godwin Emefiele. He runs a Substack on regulations in Nigeria and was a runner-up in the PwC Media Excellence Awards last year for a brilliant story on the CBN’s Bureau De Change policy. So I was curious to know what he thought about Emefiele’s performance since 2014.
'Tooni tells me to look at the Foreign Direct Investment numbers. It’s been on a downward trend since 2011, as seen in this World Bank graph. And he believes one of the factors for the continued spiral is the CBN’s foreign exchange policy which generates a measure of uncertainty. The average investor is bound to be wary of plunging capital into an environment where he cannot be assured of smooth extraction at similar rates of investment. In other words, the CBN’s drive to conserve dollars has made it more difficult to export capital from Nigeria. Red flag.
Perhaps floating the naira and allowing market forces to determine the value of the naira would be a better option, 'Tooni argues. But that hasn’t happened and may likely never do, due to the political repercussions of such a move. Instead, the CBN has continued to enact policies such as the ban on crypto-trading at financial institutions and the pausing of dollar sales to BDCs.
On the other hand, Emefiele’s CBN has focused on creating local markets. This has led to obsessions such as local rice production. But despite spending billions of naira, the price of rice has continued to rise. In 'Tooni’s estimation, spending money to grow rice is not the CBN’s job.
“I don’t expect them to just hand out money,” he says. “It’s a problem, because they are distracted from the main focus,” which is to ensure price stability by controlling inflation. What they are trying to do instead, 'Tooni says, is “to create a narrative, like a media and morale-boosting agency rather than actually solving the problem of things like inflation. Funding a set of initiatives such as rice farming will not automatically boost our economy.”
'Tooni doesn’t believe Emefiele is hopeless (he says the CBN has helped in breathing life into the payments sector and factors such as insecurity are out of his control) but maintains that most of its decisions - particularly its foreign exchange policy - has led to a lack of confidence in the nation’s financial system. “The CBN is overextending itself, essentially, and focusing on the minor things as against the major issues,” he says.
In other matters . . .
I went around this week asking people to tell me one good thing about Nigeria in under ten seconds. Most people couldn’t. It’s easier to talk about how broken the country is, the selfish politics, the bad leadership, the uncultured masses, the incompetent elite, the spectre of ethnicity and religion. But one thing you won’t find a scarcity of in Nigeria, as one respondent told me, is hope. But hope isn’t exactly something tangible or necessarily a good thing, like the bottomless longing from unrequited love.
So I ask you, dear reader, what is it about Nigeria that is good?