CBN leadership crisis and naira instability in forex market

The suspension of the ertwhile Governor of the Central Bank of Nigeria (CBN) by President Bola Tinubu had the Naira appreciate immediately which symbolised a good omen in forex market but the situation worsened with Naira trending now between N780 to N915 per dollar.

The ongoing leadership crisis at the Central Bank of Nigeria (CBN) is about to plunge the nation’s currency into serious trouble. The Nigerian currency, the naira, which has been at a lower ebb since June is expected to plunge further as the CBN is thrown into leadership confusion over last week’s appointment.

The Naira is currently being traded at N780 per dollar and the current confusion at the CBN owing to the removal of its leadership and with no clear leader to steer the bank has left the currency in the hand of speculators, with fear it could dip to as low as N1,200 before the new nominees assume office.

President Bola Tinubu last Friday announced the appointment of Yemi Cardoso as the new Governor of the Apex Bank while he also, in a single strike, cleared out the four deputy governors (DGs) namely Aisha Ahmad, Kingsley Obiora, Edward Adamu and the acting governor, Folashodun Shonubi from their positions.

The five nominees, Cardoso, Emem Nnana Usoro, Muhammad Sani Abdullahi Dattijo, Philip Ikeazor and Bala M. Bello sources told InsideBusinessNG were initially slated to replace Kayode Pitan and his executive directors at the Bank of Industry (BoI) before the Yoruba Elders, led by Prince Dipo Eludoyin allegedly prevailed on President Tinubu to switch them to the CBN.

That Aso Rock decision and the last-minute announcement in the heat of preparation for the trip to attend the United Nations General Assembly, has thrown the apex bank into confusion and becoming rudderless. President Tinubu’s replacement of the four deputy governors while the current ones have not been relieved of their positions is said to be unconstitutional and gives the impression of a government with no regard for a procedure.

Investigation indicates that the affected people at the CBN were only recommended for suspension and not to be sacked like that since there was no urgent need to replace them.

There are procedures for their replacement. For example, the absence of the Senate to consider those nominees for CBN Governor and DGs positions has shown the CBN may be rudderless, hanging only on the shoulder of the Special Investigator.

The fact that the Senate has gone on recess since August without any clear date of when it will resume automatically means that the new nominees can’t resume work without confirmation by the Senate.

While the immediate past deputy governors who have been removed from office will also stay away from work following the presidential announcement that ended their career in the bank, there is clearly leadership lacunar presently in the bank”.

It was gathered that there was total confusion at the bank on Monday regarding who should lead the Staff, look up to the Special Investigator to provide leadership at the critical time owing to a part of his appointment letter that gives room for such in case of any eventuality.

It was gathered that the acting CBN Governor, Fola Shonubi who was also affected by the Friday clear-out of the CBN leadership surprisingly showed up in the office yesterday, scaring others as to the reasons for his presence without being recalled.

Shonubi reportedly contracted the new strain of COVID-19 on September 10 and, by rule, he is expected to stay away for 14 days from office for treatment and also to curb its spread.

The outgone DGs were also sighted at the office to pack their belongings having been removed from the office. It is however not sure whether those who are to be interrogated this week will honour the invitation of the Special Investigator.

Ahmad, deputy governor, of Financial System Stability is expected to arrive from the Philippines Monday for a meeting with the Special Investigator (SI) while Kingsley Obiora, Deputy Governor, the Economic Policy Directorate is also expected at the DSS Monday for interrogation by the SI.

This instability in the leadership of the bank is weakening the Economy as policies that are supposed to make the Economy recuperate are at standstill. The government must do the needful so that citizens will know the direction of the Economy.