President Tinubu suspended the CBN governor in a move reminiscent of Sanusi Lamido’s removal as CBN governor in 2014. Once again, the move has thrown up questions about whether the President has the power to suspend the CBN governor.
In an unexpected move on Friday night, President Bola Tinubu suspended the Governor of the Central Bank, Godwin Emefiele. In a statement that has now been published by several publications credited to the Director of information at the Office of the Secretary to the Government of the Federation SGF, Emefiele’s suspension was “sequel to the ongoing investigation of his office and the planned reforms in the financial sector of the economy.” Since Emefiele’s tenure as CBN governor ends in June, it is a surprising move that will now raise legal questions.
In 2014, President Goodluck Ebele Jonathan suspended the then-CBN governor, Sanusi Lamidoo Sanusi. Many called that suspension illegal, citing the CBN Act. Section 11 of the CBN Act provides for the cessation of appointment by a CBN Governor, Deputy Governor and Director of the CBN. Section 11 (2) ( c & f) of the Act stipulates that “the Governor, the Deputy Governor or Director shall cease to hold office in the Bank if he- [c] he is guilty of a serious misconduct in relation to his duties under this Act; or [f] is removed by the President; PROVIDED that the removal of the Governor shall be supported by a two-thirds majority of the Senate praying that he be so removed”
Against this background, many argued that Sanusi’s suspension was illegal. Tobi Balogun, a legal practitioner in Lagos, told TechCabal, “In the case of Sanusi Lamido v. President & Ors, it was decided by the Federal High Court that while the President cannot unilaterally remove the Governor, he can exercise some form of disciplinary control which includes suspension over him. The matter was not appealed.” Balogun added, “In the real sense, suspending the CBN governor as a disciplinary measure is meant to be exercised with the approval of two-thirds of the Senate. What is clear is that the President cannot outrightly and unilaterally remove the CBN governor. However, we understand that suspension more or less operates as a removal because there’s no path for him to regain office.”
A move that can affect the markets
Governor Emefiele’s time as Central Bank governor has been a mixed bag. Appointed under President Goodluck Jonathan, he remains the only Central Bank governor ever to serve two terms. However, since 2015, the CBN began to pursue pro-agricultural policies, which turned out to be controversial. One such policy was Anchor Borrowers Scheme. He is also rightly criticized for questionable monetary policy and an inability to exert the CBN’s independence, leading to record borrowing levels to the FG called Ways and Means. Those ballooning loans and 22% inflation have meant that Emefiele’s legacy as governor will be unflattering. His time as governor has also coincided with an increasing lack of transparency at the bank. The apex bank has not published its financial results since 2018.
Chuwkwudalu Akabogu, a finance expert, told TechCabal, “The CBN is an independent body and is supposed to be run as one. Despite this, I expect the market to react positively as the CBN under Emefiele has been marred by several allegations that have weakened investor confidence. The market has eagerly anticipated this move.”
