The age of oil is over for nigeria

Also, most market watchers and economists now believe that the current situation in the oil market may not be transitory, but, seemingly permanent. Godwin Emefiele, CBN, Governor, at Chartered Institute of Bankers Dinner, in Lagos, December, 2014.

The Governor of the Central Bank of Nigeria, CBN, is charged with formulating monetary policy which is expected to be complimentary to the fiscal policy for which the Minister of Finance is responsible. Unlike the Minister, the CBN Governor, once appointed and confirmed by the Senate, cannot be removed by the President for five years  unless proved guilty of an indictable offense. That was why President Jonathan’s suspension of former CBN Governor, Lamido Sanusi, would have established a legal precedent  if Sanusi had not been made Emir of Kano. Generally, the autonomy of the Central Bank, in most countries is sacrosanct and cannot be intruded upon by elected officials.

For the sake of those who might not know, as well as those who already know, the CBN Governor, in setting monetary policy aims to achieve three main objectives: exchange rate stability, interest rate and full, or near full employment. Full employment, however, does not mean all those needing jobs will be employed. The term full employment allows for about four per cent unemployment.

Nobody needs to be told that Nigeria had achieved relatively stable exchange rate, about N155-158/US$1 for several years; — until last month when the CBN was forced to devalue. Even now, nobody can predict where it will settle. The safe bet is that this is only the first in a series of devaluations. Interest rates, although high by global standards, had also remained fairly stable. Inflation, which is a reflection of how those two rates had been managed, had been below ten per cent for almost three years — until now. Only the jobless rate had been way off the mark; and is now set to get worse.