Although his name may not be ringing a bell in the ears of many Nigerians, Adebisi Folashodun Shonubi, is one professional banker that the nation’s economy needs to ride through the rough waves, leading to the renewed hope the Bola Tinubu administration promised Nigerians.
With the Herculean task ahead of him in his capacity as the acting Central Bank of Nigeria Governor, not many people would envy his new role, at least for now.
Being a central banker in Africa’s largest economy could be exciting and challenging too, given some recent global economic headwinds that buffeted mast countries lately, but for Adebisi Shonubi, the story could just be different when some of the critical economic parameters are carefully taken into consideration.
For instance, with May 2023 inflation figures at 22.4 percent and Naira exchange rate to the US dollar at over N750 as at last week from N197.8 in 2015, Shonubi already has his hands filled with knotty economic puzzles to keep him awake all night long.https://c68bb22a4ba352082ff48babb9fdea52.safeframe.googlesyndication.com/safeframe/1-0-40/html/container.html
But like an athlete set for a hundred meters dash, or better still like one assigned to a relay race, all eyes are on him to deliver and restore normalcy to Nigeria‘s embattled economy.
Indeed, the task may be onerous and quite demanding, Nigerian citizens are in a hurry to see results where the negative and worrisome economic scores of the country are reversed and life of the ordinary man returned to pre2015 indicators at the very least.
Since his appointment, some observers have wondered whether the new CBN boss will ever have enough leg room to formulate and implement independent decisions that will help the economy breathe without being led by the nose by the political powers.
However, those who have followed his trajectory in the nation’s financial services sector already see him as the best man for the job. At the, having been around for quite some time and had delivered on several previous responsibilities assigned him at different times many are of the view that the new Acting GovernorAdebisi is certainly not a stranger to the twists in the national and global economy and would obviously apply the benefits of hindsight to steady the ship of Nigeria’s wobbly Naira exchange rate and galloping inflation to restore confidence in the economy..
First as a commercial banker in various financial institutions and as deputy governor in charge of Operations Directorate over many years, Shonubi would be in good stead to feel the pulse of the Nigerian and global business community in the area of monetary and financial intervention policies that could trigger the renewed Hope mantra of the Tinubu administration.
For instance, beyond his robust cognate experience in commercial banking, Shonubi had represented the CBN on the board of the Federal Inland Revenue Service (FIRS) from December 9, 2019.
He began his working career as a consultant engineer at Mek-ind Associates between, 1984 to 1989 before moving on to Inlaks Computers Limited as a marketing executive from 1989 to 1990.
The new CBN boss also worked at Citibank Nigeria Limited as Head of Treasury Operations from 1990 to 1993 after which he joined Agusto & Co Ltd, a consulting firm, as a supervising consultant from 1993 to 1996.
He was at some time, a Deputy General Manager (Banking Operations and Information Technology) at MBC International Limited
In 1999, he moved to First City Monument Bank (FCMB) Limited as Vice-President (Operations and Information Technology) and was there till 2002 and moved on to Ecobank Nigeria Plc as an executive director in charge of Operations and Information Technology.
He was also a member of the Board of Union Homes and Director, Information Technology and Corporate Services at Renaissance Securities Nigeria Limited, with responsibility for the Group’s IT infrastructure in Africa
which eventually led to his joining the board of Union Bank of Nigeria Limited as an executive director (Operations, Technology and Services) in September 2009.
It was from Union Bank that he was headhunted in April 2012 to assume a new responsibility as Managing Director of Nigeria Inter-Bank Settlement System Plc until 2018.
Mr Shonubi has since October 17, 2018 being Deputy Governor (Operations Directorate), a role he had masterfully executed since
He has been described as a resourceful banker with over 30 years of professional experience.
Born on March 7, 1962, he attended the University of Lagos from 1978 to 1983 where he obtained a Bachelor of Science in Mechanical Engineering. Two years later he capped it up with a Master of Science in Mechanical Engineering in 1985 with interest in Production from the university.
Statutorily the overriding mandate of the Central Bank of Nigeria (CBN) include ensuring monetary and price stability; issuance of the nation’s legal tender currency and maintain external reserves to safeguard the international value of the legal tender currency to promote a sound financial system in Nigeria.
It is an agent and banker to the Nigerian Government as well as being the lender of last resort.
But looking at how well these functions were executed over the last eight years of the former President Muhammadu Buhari administration would certainly stand as a guide for the new CBN helmsman.
As a banking professional craving for changes that would bring growth and development to the Nigerian economy, Shonubi had hit the ground running with reforms that many believe could soothe the nerves of the investment and business community with operational changes in the activities in the Nigerian Foreign Exchange (FX) Market.
This included the setting of June 30, 2023 deadline for end of its famous RT200 and Naira4dollar remittance programme through which billions of Naira rebate was paid to Nigerians exchanging export earnings in the local foreign currency markets.
In a circular titled; Operational Changes to the FX market, the apex bank said all segments are now collapsed into the Investors and Exporters’ (I&E) window, adding that applications for medicals, school fees, BTA/PTA and SMEs will continue to be processed via Deposit Money Banks (DMBs).
The circular read, “Operations in the “Willing Buyer, Willing Seller” model at the I&E Window Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DlR/ClR/GEN/08/007. All eligible transactions are permitted to access foreign exchange at this window.
The operational rate for all government-related transactions shall be the weighted average rate of the preceding day’s executed transactions at the I&E window, calculated to two (2) decimal places.
Proscription of trading limits on oversold FX positions with permission to hedge short positions with OTC futures. Limits on overbought positions shall be zero.
Re-introduction of order-based two-way quotes, with bid-ask spread of N1. All transactions shall be cleared by a Central Counter Party (CCP)”.
It further added that there would be a reintroduction of order book to ensure transparent orders and seamless execution of trades and added that operational hours of trades shall be from 9am to 4pm (Nigerian time).
“Cessation of R T200 Rebate Scheme and the Naira4Dollar Remittance Scheme, with effect from 30 June 2023. Further guidance on these matters shall be communicated in due course. All market participants and the general public are kindly enjoined to abide by these rules”, the apex bank said.
Another high stake awaiting the new CBN boss to unbundle is the huge stock of foreign airlines funds trapped in the country.
This would be vital to redeeming Nigeria’s image in the international community at a time the International Air Transport Association (IATA) said foreign airlines blocked funds in Nigeria, due to forex scarcity, had hit $812.2 million, making the country the highest defaulter globally ahead of Bangladesh ($214.1m), ALgeria ($196.3m), Pakistan ($188m) and Lebanon ($141.2m).
It however put overall airlines trapped funds worldwide at $2.27 billion as of last April.
Beyond the airlines trapped fund, the perversive scarcity of foreign airline had also taken its toll on profit repartiation by most corporations doing business in the country and resolving it would essential to winning their confidence for the Tinubu administration.
Meanwhile the Chief Executive Officer of Nigerian Exchange Limited (NGX), Temi Popoola, has lamented that the NGX which trades between $250 million to $300 million a day is concerned that this has declined owing to forex constraints.
“We are hopeful and we are beginning to see that the new administration wants to tackle the forex constraints”, he said.
Consequently, the apex bank’s boss’s ability to tackle some of these challenges will surely unleash a new lease of life to the economy and its operators.
Meanwhile in response to his appointment
Nigeria’s dollar bonds hitting 5-month high while the local stock market responded positively with investors gaining N1.22trn
Nigeria’s bonds priced in the U.S dollar galloped to their peak so far this year, hitting a 5 month-high on resumption of activities last week.
The nation’s domestic bourse also followed suit, climbing to 3.99 per cent as market capitalisation grew by N1.22 trillion to hit the N31 trillion mark.
This came amid the suspension of the Central Bank of Nigeria (CBN), Godwin Emefiele by President Bola Tinubu almost a fortnight ago. According to analysts who spoke on the development, said Emefiele’s suspension was considered a departure from a raft of policies that have kept foreign investors away from Africa’s largest economy.
Following the development, Nigeria’s international bonds jumped the most among emerging-market peers at the open on Monday, with its longest-dated dollar bonds rising to the highest since January. Some of the Notes maturing in 2051 rose nearly 3 cents on the dollar to 73.42, the biggest gain since April, as of 8:05 a.m. penultimate Monday in London.
But due to the June 12 public holiday, Nigeria’s stock and fixed-income markets could not react to the development same day but later did in the days following.
However, strong buys in stocks and price appreciation in bellwethers pushed the market up in the green as AccessCorp (10 per cent), GTCO (10 per cent) and Zenith Bank (10 per cent) and 58 others recorded gains in Tuesday’s trading session.
This resulted in the All Share Index (ASI) rising by 3.99 per cent to close at 58,163.55 points from 55,930.97 points recorded at the close of last week’s trading session. Similarly, investors gained N1.22 trillion as market capitalization closed at N31.670 trillion from an opening value of N30.454 trillion. Consequently, the market’s year-to-date (YTD) return stood at +13.49 per cent.
From a sectoral standpoint, the Banking (+8.76 per cent) index recorded the most significant gain, followed by the Insurance (+4.83 per cent), Consumer Goods (+3.63 per cent), Industrial Goods (+1.21 per cent) and Oil and Gas (+0.22 per cent).
Reacting, analysts said that with his appointment as CBN Governor, the nation’s benchmark interest rates may rise further as most of its assets now look more attractive to investors, adding that the scrapping of a multiple exchange rate regime could trigger a likely devaluation of the Naira.
“The market will receive the positive development, as his unorthodox policies had become an impediment to growth for Nigeria”, Ronak Gadia, director of Sub-Saharan banks research at EFG Hermes, said via email.
“His removal should be viewed as positive and could lead to improved risk appetite for Nigerian bonds and equities.
“A more normalised and conventional” policy “should result in higher interest rates in the short term as the CBN attempts to rein in on inflation,”, Gadia added.
Also reacting Mazi Okechukwu Unegbu said Emefiele’s removal and appointment of Adebisi Shonubi would impact positively on the capital market and the foreign exchange market, where multiple exchange rates were a huge threat to business
He lauded the choice of Shonubi as acting CBN Governor, saying “he is an experienced banker and a good public finance specialist who will competently hold the fort until the issues around Emefiele are resolved or a substantive governor is appointed for the apex bank.
Dr Muda Yusuf, Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE),
He said; “President Tinubu was very clear in his inaugural speech about his resentment of some current CBN policies such as the multiple exchange rate and the Naira redesign policy.
Credit: Daily Sun