The recent reforms at the Central Bank of Nigeria (CBN) were a bold step to halt the drift at the Apex Bank, which was somewhat headed to the cliff. Experts’ opinions were scathing on the activities of the CBN under the erstwhile CBN Governor, Mr. Godwin Emefiele, who is now being prosecuted by the Economic and Financial Crimes Commission (EFCC) on alleged fraud running into several billions of naira. Some CBN top management staff who served under him are also being tried. Some of the staff are now star witnesses against Mr. Emefiele in the courts.
Experts had consistently questioned Mr. Emefiele’s style of governance and raised issues around corporate governance abuses, mismanagement of the naira, forex arbitrage, and corruption.
When President Bola Ahmed Tinubu took over reign, he openly expressed more than passing interest in the activities of the CBN under Mr. Emefiele’s watch. He called for reforms at the apex bank based on the underpinning position that a country’s economic survival is directly proportional to a sound and professional CBN driving growth. The reforms were critical to the survival of Nigeria’s economy, experts had consistently said.
Many analysts, including Dr. Bongo Adi, of the Lagos Business School over four years ago believed the CBN lost focus, derailed from its core mandates, and delved into interventionism it lacked the required competencies to deal with it.
The current CBN Governor, Mr. Olayemi Cardoso would later in 2023 reveal that the CBN blew up over N10trn in intervention programmes without significant value.
“Hitherto, the CBN has strayed from its core mandate and engaged in quasi-fiscal activities that pumped over N10trn in the economy through different initiatives in sectors ranging from agriculture, power, and many others. These clearly, distracted the bank from achieving its objectives and took it to areas where it had limited expertise” Dr. Cardoso told the gathering at the Chartered Institute of Bankers of Nigeria (CIBN) 58th Annual Bankers’ Dinner and Grand Finale of the Institute’s 60th Anniversary on November 24, 2023.
The primary mandate of the CBN is to ensure price stability in addition to other objectives such as issuing legal currency, safeguarding external reserves, promoting a sound financial system, and providing economic and financial advice to the government.
But even before the CBN Boss assumed office formally on October 05, 2023, following his screening at the Senate, the president had already begun the process to reform the apex bank.
Recall President Bola Tinubu had on 28 July 2023 appointed Mr. Jim Obazee as a Special Investigator to dive deep into the CBN operations and related entities and expose whatever shoddy deals existed. He charged the investigator to expose the underbelly of the deals and perceived corruption at the CBN under the President Buhari regime. The committee went to work and some three months later, submitted its report to the President.
The Special Investigator in his report said he discovered 593 bank accounts located in the United States, United Kingdom, and China in which the Central Bank of Nigeria (CBN), under Godwin Emefiele, kept Nigerian funds without authorization by the Board and Investment Committee of the bank. 
The investigator also alleged that billions of naira were stolen by Mr. Emefiele and other officials from the CBN’s accounts including a “fraudulent cash withdrawal of $6.23 million” in the Abuja branch – about N2.9 billion at the then official exchange rate of N461 to a dollar. This is in addition to several other alleged malfeasances.
Mr. Obazee recommended the prosecution of Mr. Emefiele and at least 13 other CBN staff, including the deputy governors, for alleged gross financial misconduct.
The panel said the CBN under Emefiele’s watch saw indiscriminate and “fraudulent” use of ways and means advances by the CBN amounting to over N22trn exacerbating inflation to record highs.
Beyond the allegations of large-scale corruption that the investigator unearthed, he also recommended far-reaching reforms in the apex bank, some of which related to compulsorily retiring some staff identified to have compromised ethical standards, aided and partook in corruption. Some staff were also fingered for vested interests inimical to the new reforms. It was also recommended the Department of Banking Supervision be moved to Lagos for better monitoring of the banks because the bulk of the banking operations happen in Lagos. The president approved the recommendations ahead of the CBN’s Board inauguration.
In his 2023 Independence Day speech, the President told over 120 million Nigerians of the impending reforms at the CBN. “I pledged a thorough housecleaning of the den of malfeasance the CBN had become. That housecleaning is well underway. A new leadership for the Central Bank has been constituted. Also, my special investigator will soon present his findings on past lapses and how to prevent similar reoccurrences.” In the same speech, the president spoke of impending brutal reforms in several sectors of the economy, CBN inclusive. He said: “Reform may be painful, but it is what greatness and the future require,” he said unequivocally. He lived his words.
The president would later direct the CBN Governor and the Board, to implement the reforms without delay.
Mr. Cardoso was to implement the reforms alongside his Board members comprising Mr. Bala Bello, MON, the workaholic Deputy Governor, Corporate Services Directorate. Dr. Bello is reputed for his stellar performance at the NEXIM Bank when he served as the Executive Director, Corporate Services before he was appointed to the CBN Board. Others included Mr. Muhammad Sani Abdullahi, the Deputy Governor Economic Policy Directorate, Mr. Philip Ikeazor, the Deputy Governor, Financial System Stability Directorate, and Ms. Emem Usoro, the Deputy Governor, Operations Directorate.
Cardoso and his team needed to end the merry and he did so decisively despite some pushback from vested internal and external interests.
Some have launched an unfair social media attack on Dr. Bello just because the Human Resources Department, which is under his directorate implemented the reforms that affected some staff.
Some aggrieved staff rather than speak on the integrity of the accusations have chosen to take to social media to cast aspersions on the Deputy Governor, albeit unjustifiably.
An article circulating in the social media space by someone who claimed to be a concerned staff accused Dr. Bello of orchestrating the reforms, haven manipulated the CBN Governor. The writer also claimed the retirement of some with full benefits was skewed against the South and Minority Northern Christians. The writer also accused the DG of incompetence.
However, a top management staff of the bank who craved anonymity said resorting the personal attacks is being escapist from the core issues under interrogation.
“Taking a swipe at the deputy CBN governor over a reform ordered by the president well ahead of the board’s inauguration is beyond comprehension. But whilst the credentials and the competency of Dr. Bello cannot be questioned, what is important is the alleged malfeasance at the CBN, which should be the subject of conversation and not a resort to personal attacks and blackmail” he further noted. “Was there no corruption in the CBN? That’s the question that should be discussed” he said.
“Suffice it to say that a decision of the restructuring which involved relocating a department and compulsorily retiring over 100 staff across all 28 Departments of the apex bank cannot be influenced by a Deputy CBN Governor,” he emphasized.
“Again, the CBN is too deep and very diversified even at the Board level for a DG to perpetrate tribal and religious bigotry. I can tell you authoritatively that the allegation is completely false. Also, Dr. Bala Bello is a well-trained Accountant and is schooled in some of the best schools in the world thus, he cannot be described as incompetent or suffering from intellectual deficit by any standard. His record at the NEXIM Bank is there for anyone to verify” he added.
He recalled that Dr. Bello whom he met in 2001 and 2002 during the CBN Bank Examiners Course (BEC) emerged atop his class. The BEC is an elite exam by the CBN. As a young analyst, Dr. Bello had come from the Securities and Exchange Commission (SEC) to participate in the examination. The Exam is a requirement to be a bank examiner.
Dr. Bala Bello has kept his eyes on the ball amidst a needles campaign of calumny against him. He has remained committed, working with the other management team to accelerate the reforms so the CBN could focus on delivering value to the nation’s economy the staff further indicated.
“Him and his colleagues are focused and committed to what is right, just, and the corporate sustainability of CBN above other selfish sentiments that in the long run, may impact the fortunes of the bank” the staff further said.
He said it is sad that any aggrieved staff would leave the kernel of the matter and launch a campaign of calumny against an individual who is a part of the reform process.
SOME OF THE REFORMS
Some of the reforms that have happened with far-reaching positive economic impact include; the discontinuation of intervention funds which the CBN hitherto expended over N10trn without measurable outcomes, the liberalism of the Forex market, lifting of forex restrictions on 43 items, and the recapitalization of the banking sector.
Other policies include; reforming the Bureau De Change operations which had constituted an albatross to naira stability. They had also been fingered in some quarters for terrorism financing, and money laundering. They were used as a veritable platform for arbitrage perpetrated by some commercial bank staff and even some CBN staff. This was low for a regulatory authority that should punish market abuse and not be an active player in economic sabotage.
The reform in that FX Market segment saw a cleaning up of the BDC with 4,173 licenses revoked. This has restored sanity at the parallel market and the naira is the better for it. The naira has regained over N600/$1 and counting in less than two months.
Cardoso and his team would continue with the reforms by transferring some core staff of the apex bank to drive the announced recapitalization and effective banking supervision to Lagos. On the 26th March 2024, indeed the CBN announced a new minimum capital base for banks. The new minimum capital requirement for commercial banks with international authentication was raised to N500bn, national authorization is now N200bn, and regional authorization is N50 billion. For merchant banks, it is now N50bn while the new requirements for non-interest banks with national and regional authorization are now N20bn and N10bn respectively.
CBN is hoping to attract new capital into the country, make the banks stronger to add better value to the economy and help drive the President’s ambitious goal of achieving a Gross Domestic Product (GDP) of $1.0 trillion over the next seven years.
In addition, the CBN management began a human resource repositioning programme for efficiency. Some staff who were found to have compromised standards were retired but with full benefits.
Some have been alleged to be standing in the way of the recent policies and impending progress thus, for the policies to crystallize, the CBN needed staff who will key into the long-term policy of the apex bank.
There are several other far-reaching policy decisions that the CBN has undertaken under the current leadership with the potential long-term positive impact. Some of the policies will directly impact forex accruals, foreign portfolio investors, taming inflation and exchange rate stability among others.
The CBN under the current management has also openly called for positive contributions by way of ideas from well-meaning Nigerians because the management is receptive to new ideas that can grow the economy.
Thus, the time to support the CBN is now.
