The ongoing trial of Goodwin EmiffilleSuspended Governor of the Central Bank of Nigeria FavoriteThis report has highlighted growing concerns about how, in the absence of checks and balances, lapses in corporate governance can turn the country’s top banker into an “emperor”.
Within a decade, Imville had gone from being a powerful figure who could decide who got scarce Nigerian dollars or profited from trillion-naira intervention schemes with the stroke of a pen, to being suspended and investigated for money laundering and terrorist financing.
The suspension of Emiffiele, who was often dubbed “emperor” by many bankers because of the way he managed the country’s monetary affairs, raised concerns about management gaps in the main bank’s management and regulatory functions.
“There are gaps in corporate governance that allow the governor of the Central Bank of Nigeria to become increasingly powerful and unaccountable. For example, there is no clear separation between the positions of CBN governor and chairman,” said Babagemi Ayurende, corporate lawyer and co-founder of The New Practice. .
In accordance with Section 6 Subsection 2 of the CBN Act 2007, the CBN Board of Directors, which is responsible for the general policy and management of the Bank, consists of the Governor who is the Chairman, four Deputy Governors and the Permanent Secretary to the Ministry of Finance. And five directors and the accountant general of the Federation.
“It is not ideal that the chairman of the CBN board is the same person who holds the position of governor,” said Ayorende. “The CBN Chairman shall be an independent non-executive director, not the CBN Governor.”
In the UK, the Bank of England has a Management Court (equivalent to the CBN Board of Directors) that acts as a unitary board, setting the bank’s strategic budget and making key decisions on resourcing and appointments. One of the non-executive members is selected by the Chancellor to preside over the Court.
The United States operates a unique system that allows several Reserve Banks to collectively form the Federal Reserve Bank.
The BusinessDay findings showed that the Chairman of the Federal Reserve Board of Governors is not the CEO or employee of any of the Reserve Banks that make up the Federal Reserve.
In South Africa, the parent bank provides a board of directors of 15 directors headed by non-executive directors. The governor and three deputy governors are the only executive directors of the bank.
“If the chairman of the Central Bank of Nigeria who is supposed to set the agenda and make time for discussions in board meetings is the same person who holds the post of governor, there is a possibility that he will only allow deliberations on the things he wants to discuss,” Aywerende said.
He added, “Even in his absence, the law stipulates that only the Governor of CBN can nominate any of the Deputy Governors to represent him. That’s too much for one person.”
Desmond Ogba, Partner at Templars and Head of Business Law Division of the Nigerian Bar Association said the actions of the recent CBN governor revealed the fragility of CBN law in terms of checks and balances.
“The CBN law is weak in terms of making the CBN governor accountable for his actions despite the oversight functions of the National Assembly or the president,” Ogba said.
The Governor of the Central Bank is expected to appear before the National Assembly from time to time to make formal presentations on the activities of the Bank and the performance of the economy, as per Section 8 Subsection 4 of the Central Bank of Nigeria Act.
“Section 8 subsection 4 activities rarely occurred in the last administration and there was no stated penalty for violating such laws,” Ogba said.
“Even in terms of application, the law is very limited and vague; “It should be more specific about the type of bank activities that the Governor of the Central Bank of Nigeria is expected to report on to curb excessive trends,” he added.
To stop the slump in the value of the naira, Emiffiele took several unorthodox steps.
He has administered a multi-exchange rate system that has sowed confusion among foreign investors, ordered the felling of trees where black market vendors operate in the capital, and imposed a ban on cryptocurrency trading — a booming alternative initiative popular among young people who hedge their money against rising inflation. and blocked a website that published the value of the dollar on the black market, among other measures.
Although the CBN Act only allowed a loan of five percent of the federal government’s revenue for the previous year, Emefiele’s CBN lent him 22.7 trillion naira under a ways and means provision that could only be triggered if the government experienced a temporary shortfall in revenue.
“Emphill made a lot of questionable decisions, but there weren’t enough checks and balances except for his voluntary resignation or the intervention of the presidency which seems like a very long term,” said Lukman Agbola, head of research at Sovidam Capital.
Calls mounted for Emiffille’s resignation after he approached the Federal Supreme Court seeking verification of his interest in any political party’s presidential ticket in the February 2023 election.
According to a court filing signed May 5, 2022 and seen by BusinessDay, Emiffille said he is not a political appointee but a civil servant and has filed the suit to “expeditedly challenge the bid to disqualify and disqualify him from participating in the bipartisan presidential election.” The “primaries” scheduled for this month. The Supreme Court rejected the request.
The former Attorney General and Commissioner for Justice said, “Miffy’s tenure as CBN government is worth studying in business school so that students know how not to run a central bank.”
“I hope the investigations will reveal what really happened at CBN; He added, “I hope there will be meeting minutes to show what really happened between Emilyville, the deputy governors and the board.”
BusinessDay confirmed on Saturday that the Department of State Services (DSS) has released Kingsley Obiora, deputy governor of the Central Bank of Nigeria responsible for economic policy, after being held for four days in its custody.
Although neither CBN nor DSS confirmed Obiora’s fate at the time of filing this report, sources linked his initial arrest to the Special Investigations Committee led by Jim Obazi, which “requested several documents from several departments as part of its investigation to uncover what happened.” Event at CBN under Goodwin Emiffille”.
Prior to Obiora’s alleged arrest and release, Abbas Masanawa, a former senior official and managing director of the incentive-based risk-sharing scheme for agricultural lending in Nigeria, was arrested for his alleged role in the ongoing corruption investigation into Emiffiele.