Dramatis Personae: Aisha Ahmad

Aisha Ahmad was not very famous in the world of finance until President Muhammadu Buhari tipped her as the Deputy Governor, Monetary Policy of the CBN to replace the highly cerebral Sarah Omotunde Alade. In Nigeria, policies, unfortunately, are politics-driven. In making this appointment, how much consideration did the President give to the fact that that Ahmad’s prospective portfolio is the most technical of all the portfolios at the level of the comity of Governors of the CBN? This is not clear but what is obvious Ahmad has worked all her life as a loan-and-deposit commercial banker rather than a scholar in monetary economics.

Ahmad is the stuff of the campaigners of the girl-child. She holds a CFA, a star achievement in a finance career. Forty or thereabout, she is already an executive director in a commercial bank at a time many of her age mates are stranded in the middle management level. If she is qualified, is she contextually eligible? The appointment of Ahmad, an indigene of Niger State, provokes the usual thought on the question of the Nigerian factor and if indeed President Buhari is ready to trade off nepotism for necessity or politics for progressivism especially in view of the fact that his appointments have been considered lopsided and the woman Ahmad is replacing is from Kwara, the same geopolitical zone with Niger.

The monetary policy function is the most academic, of all the portfolios at the CBN committee of Governors level. Ahmad's immediate predecessor holds a doctorate degree and worked as a lecturer in various technical departments of the CBN before becoming the Deputy Governor. As the Chairman of the Monetary Policy Implementation Committee of the CBN, she was responsible for setting the context for the discussion of the monetary policy committee on key macroeconomic variables during its meetings.

Alade worked under three CBN Governors (Charles Soludo, Lamido Sanusi and Godwin Emefiele) and even acted briefly as CBN Governor under Emefiele. But her regime as the CBN quant witnessed a relative period of stability across key macro variables, as evidenced in the relative stability in interest rates before the topsy turvy cycle of the recent post oil boom years. Does Ahmad have sufficient intellectual savvy to provide a solid theoretical framework for the decisions of a committee largely made up of university dons, most of whom have done considerable research in monetary policy issues?

To the extent of the aforementioned, Ahmad's appointment, though not totally odd, appears to raise a fit-to-role question. Monetary policy dynamics are better understood by Milton Friedman and John Maynard Keynes model of monetary economists than bread-and-butter commercial bankers. In advanced economies, Central banking is more of economics than finance.

The Board of Governors of the Federal Reserve Bank, the American Central Bank, has seven Governors, all of whom have substantial background in financial market economics and market theories. Janet Yellen, the current head, has a doctorate degree in economics and wrote many seminal papers on economic theories before taking up a job at the Fed. Her predecessor, Ben Bernanke, was a professor at Princeton and headed the economics department for a long time before getting on the fed. A mantra in the US finance world says “the economists go to the Fed, the finance guys go the treasury”.

Well, the public spotlight is not always on the deputy governor, monetary policy, not even the other deputy governors, so Ahmad has little to worry about. And in any case, it is not exactly clear what the KPIs of the CBN Board of Governors are if there are any. But she will do herself a world of good if she immerses herself in economic research in her first few months. This is for three reasons. First, she is the policy anchor of the apex bank. To that extent, the buck for the management of the economy stops on the table of the deputy governor, monetary policy but originates from her office. The second reason is related to the first. She supervises the research department. She is in charge of CBN statistics and publications. How those data, tables and figures correlate in the reckoning of local and international investors and analysts is a measure of her competence. This is more so given the crass inadequacy of data in this jurisdiction and given the equally appalling incompetence of the national data management agency, the National Bureau of Statistics, to manage the situation.

Thirdly, she is occupying a critical position at a critical time in the economic history of Nigeria. It is not exactly clear if the handlers of the country understand that the issues challenging the future of the state goes beyond politics. Oil faces an uncertain prospect as technology improves the chances of the electric car and deepens the possibilities for other sources of energy. How well the country can confront this challenge and position itself properly against the backlash depends on the competence of its key economic institutions, particularly the Central bank. Monetary policy tails fiscal policy. In an environment where fiscal policy is more of a political consideration than a tool for economic development, the monetary policy manager is more than a manager. How rigorous monetary policies determine the level of comfort and confidence investors will have.

Her CFA and CISA should help. Her youth should also help. But she needs to do a lot more to show that CFA and CISA are not just exams and that being young is an asset not a liability in a portfolio where depth and experience are required.