By Oluwayanmife Ayobami
Godwin Emefiele had a important role in Nigeria’s financial sector as the governor of the Central Bank of Nigeria from 2014 to 2023. He held the position of CBN Governor for nearly 9 years making him one of the longest serving governors.
During his nearly decade-long tenure, he implemented numerous policies and programs that significantly impacted the country’s economy and banking system.
As one of the longest-serving governors, Emefiele’s leadership during times of economic volatility was both praised and criticized.
This article examines 5 key initiatives and accomplishments that defined Emefiele’s career.
Pumping Billions to Support the Naira
As central bank governor, one of Emefiele’s primary responsibilities was managing Nigeria’s exchange rate and foreign exchange reserves. During his tenure, the naira came under significant pressure due to falling oil prices and revenues. To support the currency and prevent a sharp devaluation, Emefiele adopted an interventionist approach.
He directed the CBN to sell dollars from its reserves into the interbank foreign exchange market on a regular basis. This helped increase dollar liquidity and meet some of the demand from importers and investors. It also enabled the naira to maintain stability against the dollar at an administered rate that was higher than the black market rate.
Over the years, Emefiele pumped trillions of naira worth of dollars into the market through regular wholesale interventions, special market interventions for small businesses/individuals, and backing of the currency with the country’s growing reserves. While this policy succeeded in stabilizing the naira for some time, critics argue it distorted the market and depleted reserves. However, supporters say it prevented economic dislocations from a free float.
In total, it is estimated that Emefiele oversaw the injection of over $50 billion into the foreign exchange market during his nearly 10 years at the helm of the CBN. This massive intervention helped support the naira but drew both praise and criticism.
Unification of exchange rates
During Emefiele’s tenure as CBN governor, Nigeria operated a multiple exchange rate regime whereby different rates existed in the official market, Investors and Exporters window, and parallel market. This led to arbitrage opportunities and distortions in the forex market.
To address this, Emefiele announced plans to unify all exchange rates around a single rate. In June 2020, he publicly confirmed the CBN’s intention to eliminate the multiple rate system. The goal was to converge the official, I&E window, and parallel market rates around the rate in the I&E window (also called NAFEX rate), which functioned more freely.
Unifying at the NAFEX rate level was intended to grant the market a major indicative rate backed by CBN interventions. It also aimed to guide rates in the official and parallel markets. This was a significant reform to simplify Nigeria’s exchange rate management and increase transparency.
However, unifying the rates posed challenges like managing volatility in the initial transition period. It also required the CBN to sustain heavy interventions to smooth out demand pressure on the currency. While progress has been made, full unification is still ongoing as differences between rates persist. But it represented Emefiele’s effort to rationalize the foreign exchange system.
Paying rebates to exporters
At the RT200 Non-Oil Export Summit, Emefiele announced an expansion of the CBN’s non-oil export rebate scheme to encourage more participation and export earnings. Previously, the rebate of N65 per $1 of repatriated export proceeds was only paid to exporters of semi-finished and finished goods.
However, Emefiele said the CBN would now begin paying rebates to exporters of unprocessed items as well. This aimed to support more small exporters engaged in exporting raw commodities. While acknowledging the initial focus was on value-added exports,
Emefiele explained this move would create opportunities for job creation through local processing of raw materials instead of just exporting them in crude form. It also demonstrated the CBN’s commitment to strengthening the RT200 program by further incentivizing the non-oil export sector through expanded access to the rebate scheme.
Supporting key sectors like agricultural, manufacturing and infrastructure programs
Emefiele established various development finance interventions and programs to support critical sectors like agriculture, manufacturing and infrastructure in line with the CBN’s mandate of stimulating economic growth.
For agriculture, interventions included the Anchor Borrowers’ Program (ABP), which provided subsidized farm inputs and financing to smallholder farmers to boost local production of staples. This helped increase yields, farmer incomes as well as reduce food importation. The ABP was later expanded to cover other crops beyond rice to achieve self-sufficiency.
In manufacturing, initiatives such as the Real Sector Support Facility and the 100 billion Naira Credit Support scheme provided long-term, low-cost financing to boost local manufacturing capacity and make Nigerian industries more competitive. This aided job creation and import substitution.
To develop infrastructure, the CBN in partnership with the presidency established the Infrastructure Company (Infraco) with an initial seed capital of N15 trillion to bridge the nation’s huge infrastructure deficit. This would facilitate the building of roads, rail lines, affordable housing among other projects.
The CBN Governor also spearheaded the establishment of the Nigerian Electricity Market Stabilization Facility to address liquidity and payment issues in the power sector for improved electricity supply nationwide.
Emefiele takes helm of global Islamic finance body
Emefiele’s appointment as Chairman of the Governing Board of the International Islamic Liquidity Management Corporation (IILM) was an acknowledgement of his leadership and expertise in the field of Islamic finance.
As the Governor of Nigeria’s central bank, Emefiele had played a pivotal role in developing Nigeria’s Islamic banking industry through various regulatory and developmental initiatives. He oversaw the issuance of Nigeria’s first Sukuk bond in 2017, which raised $150 million and helped promote Sharia’a-compliant financing instruments.
In his previous role as Deputy Chairman of IILM, Emefiele had contributed significantly to the corporation’s efforts in facilitating effective cross-border liquidity management among participating Islamic financial institutions. His wealth of experience in monetary policy formulation and Islamic finance regulation proved valuable to the strategic direction and policymaking of the body.
As Chairman, Emefiele was expected to provide strong leadership in furthering IILM’s objectives of creating and issuing short-term Sharia’a compliant financial products. This would help deepen inter-bank markets and promote cooperation between central banks and market players adhering to Islamic principles of finance.
His appointment reflected Nigeria’s growing influence in the global Islamic finance industry, positioning the CBN and country as key drivers of innovation in the development of non-interest financial systems. Under Emefiele’s guidance, IILM was poised to realize its full potential and support the continued expansion of Islamic banking worldwide.
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