In most countries, the position of central bank governor is one of a conservative low-key economist who only makes public utterances a few times a year around monetary policy.
Nigeria is not most countries.
While current Central Bank of Nigeria governor Godwin Emefiele, appointed last June, fits the more traditional image, the last two Central Bank governors of Africa’s largest economy have been conservative in economic strategy—but larger than life when it comes to expressing their opinions about the way the country is run.
In the run-up to presidential elections on Feb. 14, there is an almighty war of words in local media between Nigeria’s finance minister Ngozi Okonjo Iweala and Charles Soludo, the central bank governor between 2004 and 2009. Soludo fired the first salvo with release of a local newspaper article on Jan.25 on the economy’s mismanagement under president Goodluck Jonathan. It’s a timely reminder of one of the main issues of this election cycle which has descended into name calling and smear campaigns.
My advice to President Jonathan and his handlers is to stop wasting their time trying to campaign on his job record. Those who have decided to vote for him will not do so because he has taken Nigeria to the moon. His record on the economy is a clear ‘F’ grade. As one reviews the laundry list of micro interventions the government calls its achievements, one wonders whether such list is all that the government could deliver with an unprecedented oil boom and an unprecedented public debt accumulation.
It is not often that one intervention has the effect of resetting the tone of a national conversation, especially coming from an individual that has been away from public commentary for a few years, but Soludo comes with considerable credibility, as part of an economic team that delivered strong growth at a time of lower oil prices.
Okonjo-Iweala hit back with an 11-point attack on Facebook slamming Soludo as the worst central bank governor in Nigeria’s history.
“Soludo’s single-handed mismanagement of the banking sector led to an incredible accumulation of liabilities that will cost tax payers about N5.67 trillion (being the total face value of AMCON-issued bonds) to clean up. It is only in Nigeria where someone who perpetrated such a colossal economic atrocity would have the temerity to make assertions on public debt and the management of the economy”
Soludo, who also questioned the economic readiness of presidential rival Gen Buhari, has since replied with a 6,000-word article claiming Okonjo-Iweala forged national poverty statistics. This back and forth could run right up to election day.
This isn’t the first run-in with a central banker for president Goodluck Jonathan’s government. Last year he fell out spectacularly with his then Central Bank chief Sanusi Lamido Sanusi who took over from Soludo in 2009. Sanusi, in addition to cleaning up the banking sector and fighting inflation, was never afraid to stir the hornet’s nest in other areas.
Sanusi raised an alarm over financial inconsistencies at Nigeria’s national oil company NNPC, amounting to near $20 billion. In response, Sanusi was suspended by the President for the final three months of his term as CBN governor. But by speaking out he forced a forensic audit of NNPC, which is yet to be made public after Jonathan received the report this week. Sanusi was replaced by Emefiele last June.
In a fledgling democracy, where corruption, graft and back-scratching politics dominate all areas of everyday life, the independence of an unelected central bank governor confers a credibility on the person at its helm, and a pulpit from which to direct the national conversation. In particular, both Sanusi and Soludo have been behind major monetary policy moves which go beyond the usual tweaking of interest rates one way or another. For example Soludo’s $36 billion “bad bank assets” corporation (AMCON) formed in the wake of the global financial crisis in 2008 or a drive by Sanusi to push through “cashless” transactions. Both have been accused of overstepping the mark by various national institutions but their independence has always been highly valued to stand up to the government of the day.
The big question is whether putting the economy back near the top of the political discourse will tip the vote in either candidate’s favor. In a country with unemployment as high as 24% and much higher among teeming young voters, it’s still difficult to say even with less than two weeks to election day—but it marks a change from name-calling.