Politics
Nigeria’s suspended Central Bank governor, Lamido Sanusi, could have the last laugh
The macroeconomic environment under Sanusi’s tenure can at best be described as very stable, considering the poor performance of major world economies in 2010-2013. Foreign investors are increasingly dissatisfied and mistrustful of the Jonathan administration’s ability to fight corruption in the Nigerian financial system.
This loss of confidence in the system is what is currently exerting pressures on the FOREX and capital market. The major concern of the incoming CBN governor will be how to win back the confidence of domestic and foreign investors through continuation of a monetary policy regime that guarantees foreign exchange stability.
There is also a need to close the widening gap in the FOREX market between the official exchange rates and parallel market rates. Should Sanusi prolong the legal action over his suspension, the outcome of the court proceedings is likely to expose the weakness in Nigeria’s judicial system and further polarise the economy.
All this as Nigeria enters its election year, and tensions mount about challenges to Jonathan’s control of the ruling People’s Democratic Party. The economy could be in for a bout of turbulence.
Ikechukwu Kelikume is Head of Department of Accounting, Economics and Finance at Lagos Business School. Ikechukwu Kelikume does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was first published by The Conversation.
Copyright The Africa Report 2014
