A change in leadership is impending at Nigeria's central bank as the country prepares for a presidential election. Bank governor Godwin Emefiele is entangled in a political web that has resulted from his own ambition and maneuvering. His adversaries in the current government, and the main candidates looking to head the next government, have enough legal backing and political incentive to replace him before his tenure ends in 2024. For now, the central bank's foreign exchange regime will be unchanged while the governor hangs on to his job.


After weeks of popular speculation about Governor Emefiele's whereabouts, on 16 January the Central Bank of Nigeria (CBN) announced that Emefiele had resumed work after a ‘vacation abroad'. This statement comes in the wake of previous local media reports that Emefiele had been hiding from the State Security Service (SSS)1 hunting him for alleged corruption and terrorism financing offences. The secret police even tried to arrest him last month but were blocked by a court. His whereabouts then became speculative2. This turn of events is the penultimate act of play that begins with Emefiele's own changes to the way that the CBN is governed.

He is the first central bank governor to serve a second term since Nigeria returned to civilian rule in 1999. And he achieved this by being more deferential to the sitting president than any of his predecessors. However, his political ambition and a turf war in President Muhammadu Buhari's inner circle eventually made him a target – despite his efforts to please the president. In 2021, he joined the ruling All Progressives Congress and then sought to be the party's presidential candidate last May in the hope that the outgoing leader would endorse him as his successor. Isolated, Emefiele soon withdrew from the race.

The failed attempt to run for president (while simultaneously running the central bank) is related to his current travails in the sense that his attempts to store up political favours have made his continued stay in office untenable. To support the ruling party, he approved central bank overdrafts to the federal government beyond legal limits. To build friendships among the political elite, he exploited the wide gap between the official and parallel exchange rates by freely rationing dollars to individuals who then resold the foreign currency to profit from the arbitrage (one lawmaker described Emefiele's moves as making billionaires overnight).

The recent sale of Polaris Bank further exemplifies how Emefiele's moves to store up favours have entangled him. Polaris Bank is an insolvent bank that the state-owned Asset Management Company of Nigeria acquired in 2018. Last October, the bank was sold to an obscure company linked to President Buhari's nephew Mamman Daura and Auwal Lawan Abdullah, who is the son-in-law of the country's former junta leader Ibrahim Babangida. This antagonised other members of the president's inner circle who were eyeing the stake.

Now, the central bank governor is returning to work to continue overseeing a demonetisation programme that he began last month with little input from key stakeholders. New banknotes are slowly being released and old ones will cease to be legal tender at the end of this month. But Finance Minister Zainab Ahmed has said she was not consulted in the policymaking process, and the central bank only relaxed cash withdrawal limits after parliament summoned Emefiele to explain his programme. Here in Lagos, banks and ATMs continue to pay customers with the old notes.


Emefiele will likely be removed or made to resign before his term ends in May 2024. He will lean on Buhari to shield him from his adversaries, but Buhari is unlikely to prioritise his case because the president himself is preparing to leave office this May and will not run again in next month's election. Emefiele now faces the same fate as the head of the Economic and Financial Crimes Commission, who was similarly accused of corruption in 2020 and then abruptly removed in a turf war while the president looked on. But even if Emefiele survives in the short term, the presidential candidate who wins next month's election will have enough legal backing and political incentive to remove him after a new government starts this May. The central bank's foreign exchange regime will continue in the interim.


1 Also known as the Department of State Services (DSS)

2 NB he is included on the list of official attendees at the World Economic Forum in Davos, Switzerland.

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