Nigeria’s suspended central bank Governor, Godwin Emefiele, has been detained and is currently held in custody for investigative purposes, according to the Department of State Services (DSS) of the police. The decision to suspend Emefiele was made by the country’s new President, Bola Tinubu, on Friday, citing an ongoing probe of the governor’s office and the need for planned reforms in the financial sector.
Emefiele’s suspension was anticipated, given the intense criticism he faced during the lead-up to the February presidential election from Tinubu’s camp. Allies of Tinubu accused the governor of attempting to undermine their election campaign when his proposal to exchange old naira banknotes resulted in severe cash shortages and public outrage.
In an official statement, the Department of State Services (DSS) confirmed Emefiele’s detention, stating, “The Department of State Services (DSS) hereby confirms that Mr. Godwin Emefiele, the suspended governor of the Central Bank of Nigeria (CBN), is now in its custody for investigative reasons.”
Emefiele has not publicly commented on the investigation or his suspension.
According to Nigerian law, permanently removing a central bank governor from office requires a vote by the Senate.
During his inauguration last week, President Tinubu criticized Emefiele’s handling of currency and monetary policy, urging the central bank to work towards achieving a unified exchange rate.
Economic analysts anticipate a series of changes at the central bank, including a gradual devaluation of the naira.
“We doubt there will be a single ‘bullet’ devaluation to parallel market levels,” commented Razia Khan, Managing Director and Chief Economist for Africa and the Middle East at Standard Chartered.
Nigeria currently faces significant dollar shortages, prompting individuals and businesses to seek foreign exchange on the parallel black market, where the naira has experienced a steeper decline.
Under Emefiele’s leadership, the central bank implemented unconventional monetary policies, such as providing trillions of naira in low-cost credit to farmers and industries to boost production, and maintaining multiple exchange rates.
