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Nigerian central bank reassures after governor dismissed

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(Globalpost/GlobalPost)

The acting head of Nigeria's central bank reassured investors on Monday that the removal of the former governor would not change policy to strengthen the economy, the second-biggest in Africa.

President Goodluck Jonathan suspended the former Central Bank of Nigeria (CBN) governor Lamido Sanusi last Thursday over allegations of misconduct in a move seen by analysts as politically motivated.

Jonathan appointed Sarah Alade, the CBN's most senior deputy governor, to take the helm pending parliamentary confirmation of Zenith bank head Godwin Emefeile to succeed Sanusi.

Alade said "recent changes at the CBN will not in any way affect the monetary policy direction and pursuit of the bank's primary mandate of maintaining price and financial system stability".

Nigeria has the second-biggest economy in Africa after South Africa, which is one of the BRICS leading emerging economies.

Markets in Nigeria reacted negatively to Sanusi's dismissal, with the naira falling sharply against the US dollar, while most stocks in the banking sector also dipped.

Alade said in an advertisement published in Nigerian newspapers that the CBN had the capacity to meet the demands of foreign exchange users and there were no plans to devalue the currency.

"With the current level of reserves at seven months of imports cover as at end-December 2013, the bank's ability to intervene in the foreign exchange market is not in doubt," she said.

Nigeria's economy grew at 6.87 percent in 2013 and was "strong, sound and resilient" despite the turmoil at the CBN. Inflation had been in single figures for the last 13 months, she added.

The exchange rate has also remained stable, she said, promising to sustain the momentum.

"The bank is committed to sustaining these achievements through the use of appropriate policy tools to ensure price and financial system stability," she said.

Sanusi has rejected the claims against him, believing he was removed for highlighting alleged widespread graft in the oil and gas sector.

He told AFP in an interview on Sunday that President Jonathan was a "simple man" who had been undermined by "extremely incompetent ... extremely fraudulent" aides.

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http://www.globalpost.com/dispatch/news/afp/140224/nigerian-central-bank-reassures-after-governor-dismissed