Nigeria’s new president has suspended the country’s central bank governor, marking the end of an era of unorthodox policies at the West African institution.
Bola Tinubu, who took office on May 29, sacked central bank governor Godwin Emefiele “with immediate effect,” according to a statement from the government secretary’s office on Friday night.
“This is a continuation of his office’s ongoing investigations and planned reforms to the economic and financial sector.”
Emefiele was ordered to hand over leadership of the Central Bank of Nigeria to one of his deputies, Folashodun Adebisi Shonubi.
Tinubu criticized Emefiele in his inaugural speech last month, saying interest rates must be lowered and Nigeria’s multiple exchange rate regimes should be unified.
“Monetary policy needs a cleanup,” the president said.
Although long-awaited, the suspension marks a fall from favor for Emefile, who has led the bank since 2014 and became the first person to be re-elected to a second five-year term since Nigeria returned to democracy in 1999. central bank governor. His final term in office ends next year.
Emefiele’s tenure as central bank chief has been defined by unconventional policies and his independence has been questioned by critics who claim it is too close to the government of former President Muhammadu Buhari.
He has aligned the bank with Buhari’s interventionist approach, banning the sale of foreign currency to importers of certain goods and issuing loans to farmers and industry to encourage local production. The bank has also provided more than $50 billion in loans to the Buhari government.
During Emefiele’s tenure, the bank struggled to prop up the value of the naira in Nigeria’s dwindling foreign exchange reserves to avoid a sharp devaluation of the currency. A chronic dollar shortage is also holding back an economy that relies heavily on imports.
When the oil price crash in 2016 made the strategy untenable, analysts questioned the wisdom of keeping currencies artificially high.
The introduction of multiple exchange rate “windows” and the scarcity of dollars has forced many businesses and citizens to turn to parallel markets, where the dollar trades at 50% above central bank rates.
Investors insist that multiple rates are opaque and favor well-connected people who “go back and forth” — buying dollars cheaply from banks and selling them for a higher price on the black market.
The value of the naira has fallen sharply in recent days, hitting a record low on Thursday.
Emefiele also oversaw the rollout of redesigned banknotes ahead of the presidential election in February. The rollout of the new currency has been thrown into disarray after a shortage of the new currency led to queues at cashpoints and fights at banks.
The central bank governor surprised Nigerians last year by trying to run for president as a member of the ruling All Progressive Congress but did not resign, in violation of election and central bank guidelines.
Emefiele sued the electoral commission and Nigeria’s attorney general before abandoning his presidential ambitions.