Nigeria’s main opposition candidate for president wants to overhaul the central bank by separating supervisory and monetary policy functions, and to transition the naira to a managed float, a spokesman for him said on Monday. Atiku Abubakar, a businessman who served as vice president between 1999 and 2007, is the main challenger to President Muhammadu Buhari in the Feb. 16 election.
“Bankers are really conflicted when you put them in the role of regulators,” Abubakar’s spokesman Osita Chidoka told Reuters, adding the central bank had not divided sufficiently its supervisory and monetary policy functions as other countries do.
“The central bank is high on the list of agencies that will witness a restructuring to be sure that it is reflective of the dynamics of today’s economy.” Chidoka also said Abubakar did not think current governor Godwin Emefiele was best placed to continue at the helm given his past record supporting the government.
“He wasn’t independent,” said Chidoka, who had just returned from a trip to Washington with Abubakar, of the main opposition People’s Democratic Party (PDP). “You really need a development mindset and an economist … it doesn’t have to be a banker, it has to be someone who thinks about the economy in a holistic way.”
Emefiele’s office did not immediately reply to a request for comment. Emefiele imposed currency restrictions in 2015, defying bankers’ advice to float the naira and raise interest rates as some other oil exporters had done. His decisions were in line with current leader Buhari, a staunch opponent of letting the naira float freely. The currency restrictions saw investors cutting their exposure to Nigerian asset as the once promising emerging market was ejected from key bond indexes. Chidoka also confirmed Abubakar planned to oversee the currency transition into a managed float that would give more flexibility but also reflected the fact that Nigeria’s oil-dependent economy hugely depended on crude oil prices.
“Nigeria cannot afford to keep the naira at 305 (to the dollar), creating a window for arbitrage. On the street it is 360 – a 55 naira difference.” Nigeria has a plethora of exchange rates against the U.S. currency and has been selling the dollar on the interbank market to boost liquidity after floating the naira for investors. However, the official rate stood at around 307 to the dollar on Monday – a level it has been close to since late 2016, while black market currency dealers quoted the naira at 362. Nigeria vies with South Africa’s to be the largest economy on the continent, but has performed below par since 2016, when it suffered its first recession in 25 years. Reuters
Pix: Abubakar Atiku
