Sweeping Changes at CBN

E kaaro o, Ututu Oma, Barka da Safiya - Good morning and welcome to a new week.

Last Friday, the President announced Yemi Cardoso as the new governor of the Central Bank of Nigeria (CBN). His appointment is the worst kept secret since the world realised jam was good on bread. He also announced four new deputy governors, making it a clean sweep of the management of the apex bank.

While uncertainties remain about the resignations and time of leaving of the current crop of deputy governors, it will be the first time in Nigeria’s history that all the five governors of the Central Bank are nominated and will be confirmed the same time. That means their terms will also expire the same time in five years. At least this year, it will not only leave the Central Bank without leadership (irrespective of whether the ones there remain in office) for as long as the confirmation takes, but also leave the Bank without overlapping transitional leadership.

I don’t think it’s a good idea at this most critical time.

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Markets

• The benchmark NGX All-Share Index (ASI) rose to 67,395.74 after Friday’s trading, a daily change of 0.07% and an overall year-to-date gain of 31.5%.

• Oil prices continue to climb amidst tighter supplies. Brent futures rose 1.07% to US $93.93.

• forecasts for warmer weather and higher demand over the next two weeks than previously expected. Traders also noted that prices rose on a big drop in daily in U.S. output.

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National Headlines

• Sweeping Changes at the Central Bank of Nigeria – President Bola Ahmed Tinubu made sweeping changes at the CBN Friday. He sacked the four deputy governors of the apex bank and nominated Yemi Cardoso as the new CBN governor and four deputies. Uncertainties remain. First, it is not clear yet if the current deputy governors have been asked to resign, leave office immediately or wait until the confirmation of the new set of governors. What is clear though is that the announcement has created an unprecedented leadership vacuum at the apex bank at a time most needed. Even if the present deputy governors remain, no important decisions can be taken anymore by them. The annual World Bank / IMF meetings hold next month in Morocco. Most importantly, as it is, because they will all be confirmed same time, it means their dates will expire same time in five years, leaving the Bank exposed to lack of overlapping leadership.

• NNPC / Indorama signs deal on gas – The Nigerian National Petroleum Corporation (NNPC) over the weekend signed a deal with Indorama for an initial US $8 billion gas supply. The essence of the deal is the further development of Nigeria’s extensive gas reserves, estimated at 208.83 trillion cubic feet for domestic power generation, fertilizer production, and condensate refinery. Though it is part of the decade of gas plan of the federal government, this underscores the focus of the President on gas. The government sees gas development as key area for expanding foreign earnings and domestic energy development

Global Headlines

• Its UNGA week – This week, world leaders, including President Bola Ahmed Tinubu will gather in New York for the 78^th United Nations General Assembly. For the President of Nigeria, the focus is attracting investments into Nigeria. The 78^th General Assembly is holding amidst renewed global economic and political uncertainties, including in Africa. The meeting will discuss myriads of issues including geopolitical tensions, food poverty and insecurity, energy transition and climate change etc. The focus for Nigeria and Africa is on the faltering progress on the 2030 sustainable development goals (SDGs). Halfway to the 2030 target of ending hunger and achieving food security, it is estimated that about 600 million people will still be hungry by 2030.