The Central Bank of Nigeria (CBN) finds its top officials teetering on the edge as a special investigation into alleged financial misconduct reaches its zenith. Deputy governors of the CBN, including Acting Governor Folashodun Shonubi, and a majority of the directors are facing increasing odds as a confidence crisis comes to a head this week.
Nominees to replace the embattled suspended governor, Godwin Emefiele, and his four deputies are set to undergo crucial Senate screenings. Meanwhile, the existing leadership is facing relentless questioning by the Department of State Security (DSS) investigators, aiming to uncover their potential involvement in financial abuses reaching trillions of naira, according to sources cited by The Guardian.
Multiple sources have revealed that the investigative team has conducted lifestyle audits on deputy governors and directors to assess any illicit enrichment during their roles. While these audits don’t confirm guilt, they aid investigators in focusing their efforts.
Since early August, deputy governors and directors have made multiple appearances at the DSS facility for questioning. Acting Governor Folashodun Shonubi alone has been interrogated four times in recent weeks, prompting President Bola Tinubu’s decision to replace the entire leadership team.
President Tinubu’s nominations for deputy governors—Emem Nnana Usoro, Muhammad Sani Abdullahi Dattijo, Philip Ikeazor, and Dr. Bala Bello—are expected to bring a mandate to stabilize the financial system, address the foreign exchange crisis, and control inflation.
This week, President Tinubu is expected to finalize plans to transition the incumbent deputy governors, making way for a new era in the financial system. However, speculation suggests that some deputy governors may choose to resign, while the president may also consider outright sackings, which do not require legislative approval, as per the CBN Act.
The CBN Act stipulates that the President needs a two-thirds majority in the Senate to remove the CBN governor, safeguarding the office’s autonomy.
The fate of deputy governors Folashodun Adebisi Shonubi, Aishah Ahmad, Edward Adamu, and Kingsley Obiora remains uncertain. Some sources suggest that these deputy governors, feeling unfairly targeted for Emefiele’s perceived wrongdoings, may opt to resign.
Recall that some directors were entangled in alleged wrongdoing alongside the suspended governor. These directors might consider voluntary retirement to protect their reputations, with potential prosecution looming.
A retired Director of Finance at the CBN, Benjamin Fakunle, was reportedly arrested for manipulating the bank’s financials from 2016 to 2022 during a retirement celebration.
Additionally, the Special Investigation panel has interrogated officials of the Financial Reporting Council (FRC) accused of compromising their positions in auditing the CBN under Emefiele. The alleged fraudulent accounting guidelines have cast doubts on the bank’s audited accounts.
Notably, the investigation team is collaborating with the DSS, given concerns about the integrity of the Economic and Financial Crime Commission (EFCC). The DSS has been actively involved in arrests related to the probe.
Apart from the confidence crisis, the allegations against the CBN have serious implications for national security, as they involve substantial sums of money and possible cartel-like activities.
The incoming executive management faces the monumental task of rectifying a deteriorating monetary system and tackling soaring inflation. A key challenge will be stabilizing the exchange rate, which has lost significant value over the past nine years.
Market arbitrage and double-digit inflation rates further exacerbate the economic challenges. The new CBN leadership, led by Olayemi Micheal Cardoso, is expected to implement stringent policies to address these pressing issues.
Commenting on banking supervision, experts emphasize the need to revamp the regulatory framework to ensure banks focus on their core functions. Amendments to laws related to banking licenses, the Asset Management Corporation of Nigeria (AMCOM), and the external reserve currency basket are also suggested to restore stability.
In the midst of these developments, there are concerns about the legal aspects of Cardoso’s nomination, with questions raised about the resignation of Godwin Emefiele and the need for Senate support.
The road ahead for the CBN and its new leadership is fraught with challenges, but there is optimism that reforms can help restore confidence and stability in Nigeria’s financial system.