By Jide Akintunde
The appointment of Aishah Ahmad last week as a Deputy Governor of the Central Bank of Nigeria (CBN) was greeted with excitement by aspirational Nigerians. At 40 years of age, Aishah was considered young. At this relatively young age, she was an executive director with one of the country’s well-known banking franchises. And her CV is not bad at all. Her physical beauty was also the rave of social media commentary.
The ecstasy over her new appointment soon turned to a rude shock, and suspicion, when it was learnt that Aishah became ED at Diamond Bank only hours before her appointment to the Committee of Governors of the CBN. Although the CBN Act 2017 does not require a banker to have risen to the position of executive director to be appointed CBN deputy governor, Aishah’s promotion appeared shifty. In particular because media reportage of her appointment pointedly stated she was appointed from a position of executive director.
However, persons without banking experience at all have been appointed CBN governor and deputy governor in the past. The most notable of such recent appointees were Prof. Charles Soludo (Governor) in 2004, and Dr. Kingsley Moghalu (Deputy Governor) in 2009.
Except for her ego — or an attempt to hoodwink the public by a highfalutin CV — the sudden double promotion of Aishah, from the position of deputy general-manager to ED, was immaterial to her CBN appointment. One must admit, however, that the promotion could have implication for her severance package at Diamond Bank. If the Board of Diamond Bank decided to promote her for this reason, so that she could reap a reward for her meritorious service – for three years at the bank – it is a bank governance issue. Unfortunately, the CBN, which should have been interested in the propriety of such a matter, seems to have prejudiced the consideration of Aishah’s senate confirmation by issuing a needless statement in defence of the appointment.
That is where the real issues begin. Aishah, subject to confirmation by the Senate, is headed for a CBN that has become too politically-aligned that the blind could see it. For two years, the current CBN regime appeared to surrender its mandate of independently determining monetary policy – including the exchange rate – to the presidency. President Muhammadu Buhari’s reticence with currency devaluation made the CBN to adopt a policy alternative to a managed-float exchange rate, imposing various capital controls that stifled real sector production and scared away foreign investors.
Quite obviously, Aishah’s appointment was political. In a strict sense of the extant Federal Character principle, there was nothing wrong with that. She hails from the North Central, the same geopolitical zone of Dr. Sarah Alade, who retired from the apex bank in March after serving her two terms as deputy governor. Aishah’s appointment was touted as a straight replacement for Dr. Alade.
But Sarah Alade was deputy governor in charge of economic policy. She has her first degree in economics and has a doctorate. Therefore, in replacing her, there were two considerations. One, geopolitical zone. And, two, the job function. It would appear that only the geopolitical consideration was made for Aishah’s appointment. Or, is she going to head the Economic Policy Directorate of the CBN with no degree in economics?
Perhaps, on the trail of Aishah’s confirmation – or at the nudge of this article – there would be a redeployment of at least one of the current deputy governors. In which case, Aishah would not be heading the Economic Policy Directorate. That may not necessarily help. For instance, if Dr. Joseph Nnanna who currently heads the Financial System Stability Directorate was to be moved to Economic Policy, Aishah would be superintending the surveillance of the banking system. This would simply stretch her gut, both with the banks and as it may relate to the big customers – given that Aishah’s much-ballyhooed banking experience was largely in private banking. Any other tinkering with the positions of the DGs would be either inappropriate or disruptive.
Among the current four members of the Committee of Governors of the CBN, including the governor, only one holds a doctorate and a degree in economics, i.e. Dr. Joseph Nnanna. The governor, Godwin Emefiele; and the Deputy Governor, Operations Directorate, Adebayo Adelabu, have no degrees in economics. They were appointed from senior positions from the banks. Other than Dr. Nnanna, the only economist the CBN’s policymaking organ boasts within the bank, Suleiman Barau, holds a Master’s degree in economics. In a nutshell, that is the current composition of the Committee of Governors of the Central Bank of Nigeria – the agency of the state whose mission is to “Be the model central bank delivering price and financial system stability and promoting sustainable economic development.”
If there are bankers already in the Committee of Governors of the CBN, why can’t we have another banker? The problem is that we would be having too many bankers at the policymaking and rate-setting organs of the CBN. It would represent an anomaly, whereby, as a close example to me, four out of the five members of the editorial board of a newspaper are businessmen, with only two having an academic background in mass communication.
However, it is inconceivable that a deliberate decision was made to have bankers overwhelmingly constitute the Committee of Governors of the CBN. In the recent past years, bankers have been appointed CBN governor and deputy governor. Tunde Lemo, was managing director of Wema Bank when he was appointed deputy governor. Although Suleiman Barau was initially a special adviser to CBN governor, Prof. Soludo, for two years before becoming deputy governor in 2007, he was a banker. But both Lemo and Barau hold degrees in economics.
When Dr. Kingsley Moghalu was appointed deputy governor of the CBN, the governor at the time, Lamido Sanusi (now HRH Muhammadu Sanusi II, the 14th Emir of Kano), has a Master’s degree in economics. Moghalu didn’t have a degree in economics, but was an intellectual with PhD from London School of Economics. Much of his intellectual work centres round public policy. Regardless of this, every other deputy governor that served with him has a degree in economics.
A malady with appointment of DGs of the CBN is now metastasizing. There has been an overreach of politics in the recent appointments, without consideration for economic management at the top echelon of the apex bank. Indeed, Aishah’s appointment now shows the disregard for the monetary policy function of the CBN by the Buhari Administration.
It may be argued that the Monetary Policy Committee, which is the rate-setting organ of the CBN, has ample economists, including professors of economics as members. Surely they will supply the technical knowledge that is required for fixing the monetary rates. This view overlooks the influence of the governor in the policy decisions as Chairman of the MPC. It is normal for the governor to try to build near-consensus among MPC members to get the decision he wants.
We may ask why intellectuals are not being appointed into the Committee of Governors. Could it be that the intellectuals cannot match the bankers in lobbying for the positions? If that is a remote possibility, it would mean the appointments are no longer merit-based. And if that is another remote possibility, it means the appointment process is subject to abuse.
In a feat of irony, the CBN may have now become a frontier of competition for the banks. With Godwin Emefiele, Adebayo Adelabu and Aishah Ahmad getting CBN appointments from three different banks, the replacement for Barau – whose term expires in December – may have to reflect “bank character” as other banks would like to make their claim. By then, it may become apparent that this pattern of appointment, in effect, means self-regulation for the banks through their proxies in the top echelon of the Central Bank of Nigeria.
So, it is not yet celebration time for aspirational Nigerians who were enthused by Aishah’s appointment. Appointment of young Nigerians to senior public positions need not mismatch qualification and experience with position and function. In fact, another young Nigerian that fails to inspire in a public position is an argument against inclusivity in Nigeria’s gerontocracy. Advisedly, a young Nigerian intellectual (with a degree in economics) as CBN deputy governor, might help arouse interest of younger people in economic policy by regularly giving brilliant speeches – something that is ensconced in the job functions of the current regime at the CBN. The Senate now has to show responsibility to the aspirational Nigerian youths.
– This Best Outside Opinion was written by Jide Akintunde/Financial Nigeria. He is Managing Editor, Financial Nigeria. He is also Director, Nigeria Development and Finance Forum