Opinion: as Cardoso assumes office as new CBN’s helmsman, by Kola Amzat
After months of speculation that surrounded his nomination, his eventual nomination by the president, as well as screening and confirmation by the senate of Federal Republic of Nigeria, Michael Olayemi Cardoso, a very accomplished Nigerian banker, chartered stockbroker and public policy expert, has ascended Nigerian Apex Bank as the 11th governor in the history of the Bank.
Cardozo, a Lagosian of Brazilian descent, with Bachelor’s degree (B.Sc.) in Managerial and Administrative Studies from Aston University, and Master’s degree in Public Administration from Harvard Kennedy School of Government, was granted a Doctorate degree in Business Administration by the same Aston University in 2017, is a Fellow of prestigious Chartered Institute of Stockbrokers.
The new CBN governor, suave, shrewd, calm, heavily built, always looking professional and reserved, has had a very illustrious career spanning over four decades in the public, private and development sectors as a leader, financial catalyst, and innovator of immense standing.
Among his most impactful roles are: Commissioner in Lagos State Ministry of Economic Planning and Budget; Chairman of the board of the African Venture Philanthropy Alliance and, most recently, Chairman of Citibank Nigeria Ltd, where he held sway for about 12 years, until he voluntarily took a bow in 2022.
But, his tenure as Commissioner for Economic Planning and Budget in Lagos is the most instructive and eventful.
He pioneered and superintended on Nigeria’s first stand-alone Ministry of Economic Planning & Budget, a ministry that later became the engine room and think-tank of the Tinubu administration in Lagos, as well as the champion of the state economic reform process, with analytical innovations and consultative mechanisms as the drivers of contemporary, purposeful and responsive governance.
He engineered a strategy document for the state poverty alleviation and wealth creation and authored the 10-point economic agenda that helped catalyzed the ongoing reforms and transformations in the state, as well as ensuring that performance and compliance of all ministries, departments and agencies are strictly & continually monitored.
Cardoso pioneered the Ehingbeti Lagos economic summit as a platform that enabled corporate leaders and other multi-stakeholders, including international development investors to contribute to solving the peculiar problems of a megacity in a voluntary and result-oriented manner.
Without any shadow of doubt, the eminent Banker and Stockbroker has indeed had a tremendous and enviable career in the financial, as well as public sector, all combined together to eminently qualified and particularly set him apart for the onerous job of helmsman of Nigerian Central Bank.
As much as the Nigerian people are appreciative of the insight and intuition of the president to identify and fish out such uncommon talent with skills set to take charge and control of Nigerian Apex Bank, it’s instructive to emphasize that there are enormous and very daunting tasks ahead of Mr. Cardozo as new helmsman of the Bank.
He’s assuming the office when monetary policy seems to have been totally bastardized and mangled by the immediate past CBN authority, so much that the all-important policy always stand totally at variance with the economic challenges it purposed to address.
Following the misapplication and mismanagement of monetary policy by Godwin Emefiele led CBN management, the nation is presently battling with policy somersault, galloping inflationary rate, explosive and very disruptive foreign exchange market leading to total erosion of populace confidence in the market, unbearable higher interest rate significantly stifling the operations in the real sector and economic activities by SMEs, exponential increase in energy cost and of course, general loss of confidence & trust in the activities of the Apex Bank, owing to so much indiscretions and manipulations by immediate past management of the Bank.
Meanwhile, the nation expect that topmost on the agenda of the new governor should be to immediately commence deploying resources towards the rebuilding and repositioning the domestic currency.
Even though, it looks a herculean task, spirited efforts must be made to clear the nation’s huge backlog of foreign exchange obligations of about $6.8 Billion that the governor made mentioned of, while been screened by the senate, as well as huge debt service obligations that need to be redeemed.
It’s imperative for the Bank management team to ensure strategic intervention in the foreign exchange market in order to curtail the effect of volatility.
Part of these measures is for them to look at the possibility of creating autonomous window in the banking system where the currency can trade freely without any hindrances. This is necessary to prevent the diversion of remittances to other transactions, and even, the black market.
It’s also important that the governor must henceforth put efficient strategy in place to prevent policy somersault that has attended the monetary policy over the last couple of years, a development that often made complete mess of Open Market Operations, Liquidity Ratio, Deposit/Reserve Ratio and even, Special Deposits by Commercial Banks with CBN, as well as largely hindered manufacturers and SMEs from accessing funds in the banks.
Over the last few years, Nigerian Foreign Reserves Account continually suffered depletion on account of large quantum of frivolous imports into the domestic market, which had to be settled from the account.
This has limited the capacity of the country in funding the real critical infrastructural items the country is in dire need for growth & development.
The immediate past CBN governor also got himself embroiled in phony and commercial transactions which are ordinarily the purview of manufacturers and business magnates.
How on earth could we explain CBN financing rice, tomato, pharmaceutical products importation? How do we justify the CBN dabbling into funding political activities?
Similarly, the CBN under new management may have to look at the import and export (I&E) window and possibly create an autonomous window in the banking system where the currency can trade freely without any encumbrances. This is necessary to avert the diversion of remittances to other jurisdictions or the black market.
The currency redesign policy introduced by Godwin Emefiele led CBN was a thoughtless, very undesirable and counterproductive exercise totally borne out of selfishness, unprofessional and unethical conduct and must therefore be discarded by the new management.
Moving forward, the CBN must ensure the strengthening of the financial intermediation role of the Commercial Banks to increase the quantum of credit to the private sector in Nigeria with a view to ensuring that Financial Institutions indeed play their primary role as major lender to real sector, for the growth and development of the overall economy.
It’s also in the public domain that the spread between deposits and lending rates in the Nigerian banking system was unduly too high, an indication of inefficiency and professional cheating in the banking system.
While the spread in Nigeria is over 20% per cent, the average for sub-Sahara African countries is about 10% per cent, with global average hovering around 6.6%. This is serious disequilibrium that the new governor must urgently addressed
Finally, the ways and means of financing CBN activities must be strictly maintained within statutory limits to prevent the destructive effects of high-wired funds on the macroeconomic environment plane and by extension the growth, development and prosperity of the country.
Under the watch of new governor, the nation expect the CBN to resume its key role of redirecting and refocusing the economy, as well as placing it on the path of sustainable growth capable of guaranteeing development, as well as ensuring prosperity for the country.
Kola AMZAT (FCA, FCIB)
LAGOS BASED FINANCIAL CONSULTANT,
09077509348
Kola AMZAT (FCA, FCIB, CTP, MBA) Lagos Based Financial Consultant
09077509348.
