The governor of Nigeria’s Central Bank, Godwin Emefiele, has been arrested by authorities shortly after being suspended from his position by the country’s new president, Bola Tinubu.
The Nigerian secret police confirmed Emefiele’s custody, stating it was for “investigative reasons,” although no further details were provided.
Emefiele had served as the governor of the Central Bank of Nigeria for nine years, overseeing the monetary policy affairs of Africa’s largest economy and most populous country.
However, following his suspension by President Tinubu on Friday night, his tenure was abruptly halted.
Emefiele’s suspension “is sequel to the ongoing investigation of his office and the planned reforms in the financial sector of the economy,” according to a statement from the Secretary to the Government of the Federation. Folashodun Adebisi Shonubi, a deputy governor at the bank, immediately took over as acting governor.
The arrest of Emefiele concludes several months of investigation into his position by Nigeria’s Department of State Services (DSS), which previously attempted to arrest him in December but was denied by a local court. The secret police had accused him of terrorism financing and economic crimes; however, a judge ruled that there was insufficient evidence to support these allegations. It remains unclear if any new findings have emerged from the ongoing investigation.
Financial analysts noted that Emefiele’s removal from office did not come as a surprise, citing certain controversial policies he implemented in recent months. These policies included the bank’s currency swap program and its decision to engage in continuous money printing and lending to the Nigerian government. Abiola Gbemisola, a financial analyst based in Lagos, highlighted these policies as contributing factors to the perceived controversy surrounding Emefiele’s tenure.
“The central bank governor was very powerful” in office, Gbemisola said.
“I wasn’t expecting him to stay under the new administration, especially given the fact that he was not so kind in his policies leading up to the (February presidential) election. Rather than focusing on reducing inflation, he contributed to Nigeria’s high inflation by giving money to the federal government, printing money essentially to give loans,” added Gbemisola.
Under Emefiele, Nigeria’s economy struggled with a weakened currency caused by the foreign exchange crisis as well as a surging inflation rate, which was at a near-two-decade high of 22.2% in April.
The bank’s move to replace the local naira currency with newly designed ones caused economic hardship for so many Nigerians that it affected the turnout in the February election while authorities were forced to reintroduce the old bank notes being replaced.
“The fact that he has been removed is a positive thing for the (financial) market and we can now expect to see something different,” Gbemisola said.