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How Sanusi and I stabilised the naira during our time in the CBN – Moghalu

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Kingsley Moghalu, a former Deputy Governor of the Central Bank of Nigeria, has described how the central bank managed to keep the naira stable against the dollar for five years between 2009 and 2014.

Moghalu, who served as the apex bank’s deputy governor from 2009 to 2014, said this during an interview with PUNCH.

Nigeria has in the last few years been struggling with the problem of a collapsing naira, which Moghalu, a member of the Advisory Council of the Official Monetary and Financial Institutions Forum, believes can be rescued with the right reforms and policies.

What is Moghalu saying?

Moghalu blamed the naira’s downward trajectory on the activities of speculators and the apex bank’s lack of autonomy. He said the apex bank worked on investors’ confidence during the period.

He said, “We worked very hard on the matter of the exchange rate because we wanted to create a very investment-friendly climate for both local and foreign investors in the Nigerian economy and we knew that one of the keys to that was an exchange rate that was stable.

“So, we made sure that you could bring in your money for investment in Nigeria and take it out, 100 per cent, it’s yours, with no real complications, that gave investors’ confidence.

“We, of course, had high oil prices at that time which also was helpful. So, the reserves were never really above the early 40s, in terms of billions of dollars.

Moghalu who was a former presidential candidate of the Young Progressive Party in the 2019 election, said that several efforts were made on the part of the leadership of the apex bank to clean up the system by introducing reforms that stabilised and opened up the economy for business.

“It was just the way we managed the Central Bank’s own responsibilities in the economy in general – the banking reforms that we did; we really cleaned out the system, we stabilised it and we opened it up for business.

He said amongst their many achievements was the introduction of Bank Verification Number and approval of innovations such as the payment systems.

“We laid the foundation for the fintech boom that we are enjoying today. We introduced a lot of payment system innovations like the Bank Verification Number when I was deputy governor of operations and responsible for the payment system reforms.

“It’s a whole set of factors that contributed to our success,” he added.

What you should know

Moghalu deputized under Sanusi Lamido Sanusi, the then CBN Governor from June 2009 to February 2014.

During the administrations of late President Umaru Yar’adua and then-President Goodluck Jonathan, both Sanusi and Moghalu led the apex bank.

During this time, the naira remained stable at roughly N150/$1.

However, since the beginning of the current administration of Muhammadu Buhari (retd. ), and the leadership of Godwin Emefiele as the CBN Governor, the naira has maintained an unusual downward trajectory.

The naira is currently trading at roughly N412/$ at the I&E FX Window, the CBN’s only official rate.

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