I don't want my wife to make my SIL our daughter's Godmother, but she wants to
Is there a reason she is doing this? Does she owe her a favor or something?
I guess she's just trying to be a friendly person.
I wouldn't worry. A godparent is not the only important person, you can still play a strong role in their life.
Not a nothing, it's a big deal.
I would focus on how you can have a positive impact on the child and what you can do to start that process.