The Suspension of CBN Governor Godwin Emefiele by President Bola Tinubu came barely one week, four days after inauguration on May 29, 2023.
According to the statement issued by Willie Bassey, the Director of Information for the Secretary to the Government of the Federation says President Bola Ahmed Tinubu has suspended the Central Bank Governor, Mr Godwin Emefiele, CFR, from office with immediate effect.
The statement added that this is sequel to the ongoing investigation of his office (CBN governor) and the planned reforms in the financial sector of the economy.
The statement further directed Mr Emefiele to immediately hand over the affairs of his office to Folashodun Adebisi Shonubi, the Deputy Governor (Operations Directorate), who will act as the Central Bank Governor pending the conclusion of investigation and the reforms.
President Bola Tinubu, on June 9, 2023, Friday night suspended Emefiele. Bassey explained that the suspension of the CBN governor is based on an ongoing investigation.
If it so, what the CBN Act says about the suspension of CBN Governor, then.
According to the provided section of the Act, excerpt from CBN Act saying the suspension or removal of the CBN Governor can occur under certain circumstances. These circumstances include:
If the Governor, Deputy Governor, or Director of the Bank becomes a member of any Federal or State legislative house.
If they become a Director, officer, or employee of any bank licensed under the Banks and Other Financial Institutions Act.
If the Governor, Deputy Governor, or Director becomes of unsound mind or incapable of carrying out their duties due to ill health.
If they are convicted of any criminal offense by a court of competent jurisdiction, except for traffic offenses or contempt proceedings related to the execution of their duties.
If they are guilty of serious misconduct in relation to their duties under the CBN Act.
If they are disqualified or suspended from practicing their profession in Nigeria by an order of a competent authority made in respect of them personally.
If they become bankrupt.
However, it’s important to note that the removal of the Governor requires the support of a two-thirds majority of the Senate, which would need to pass a resolution in favor of the removal.
Additionally, the Governor, Deputy Governor, or Director has the option to resign from their position by providing written notice to the President. If any of these positions become vacant due to death, resignation, or other reasons before the expiry of the term, a suitable replacement will be appointed in accordance with the prescribed procedures outlined in the CBN Act.
According to the section of the CBN Act provided, the act does not explicitly mention suspension as a means of removing the CBN Governor.
It primarily outlines circumstances under which the Governor, Deputy Governor, or Director may cease to hold office, including reasons such as illness, criminal conviction, serious misconduct, disqualification from practicing a profession, or bankruptcy.
However, the Act does not specifically address suspension as a mechanism for removing the CBN Governor.
Therefore, the question of whether the CBN Governor can be suspended over an undisclosed ongoing investigation falls outside the scope of the information provided in the Act.
The provisions of the CBN Act regarding the removal, resignation, and appointment of the CBN Governor are relevant in determining the procedures and grounds for such actions.
It appears the current president may have also relied on these provisions to suspend Emefiele. He is also likely to get any push backs as most analysts and stakeholders had expected the removal of the governor to be one of his first acts.
The potential suspension of the CBN Governor based on ongoing investigations raises concerns the independence of the Central Bank of Nigeria. The independence of a central bank is crucial for maintaining monetary policy credibility, ensuring financial stability, and promoting investor confidence, said the Act.
The central bank’s independence allows it to make decisions based on economic fundamentals rather than political pressures or interference. It enables the bank to act in the best interest of the country’s economy, free from short-term political considerations. By insulating monetary policy from political influence, central banks can focus on maintaining price stability, controlling inflation, and promoting sustainable economic growth.
However, when a central bank governor is suspended or removed under circumstances that are not clearly defined in the law, such as ongoing investigations, may raises questions about the motives behind the decision and the potential impact on the bank’s independence. It is important to ensure that any investigation or decision regarding the central bank governor is conducted transparently, adhering to legal procedures and maintaining the principles of due process as it may likely play back on this administration in the future.
Under the outgoing administration of President Muhammadu Buhari, stakeholders were concerns about the independence of the CBN as it regards to the perceived influence of the President on the Governor, Godwin Emefiele. These concerns were primarily driven by the close relationship between President Buhari and Emefiele, leading to perceptions that the Governor may be subject to the wishes of the President.
During President Buhari’s tenure, there were instances where the CBN’s monetary policy decisions seemed aligned with the government’s objectives, particularly in areas such as foreign exchange management and intervention in the economy. This raised questions about the extent to which the CBN’s decisions were driven by its mandate of maintaining price stability and financial stability or influenced by political considerations.
The Ameh News recall that on the 20th of February 2014, Sanusi Lamido Sanusi, the immediate past CBN Governor was also suspended by President Goodluck Jonathan.
Then former president cited reports of the Financial Reporting Council of Nigeria and other investigating bodies, which “indicate” that Mallam Sanusi Lamido Sanusi’s tenure “was characterized by various acts of financial recklessness and misconduct which are inconsistent with the administration’s vision of a Central Bank propelled by the core values of focused economic management, prudence, transparency, and financial discipline” among other reasons given at the time.
Most analysts viewed the suspension as illegal, however, the government utilized provisions in the civil service law that allows the president to suspend civil servants.
The background of former President Goodluck Jonathan’s suspension, then, Sanusi Lamido Sanusi as the CBN Governor adds to these concerns. Sanusi’s suspension in 2014, was seen by some as a move to curb his criticism of the government and his outspokenness on key economic issues.
This recurrent event raised questions about the independence of the central bank and the potential for political interference in monetary policy decisions.