Experts predict positive market outing despite Emefiele’s suspension
Amid the suspension and arrest of the Central Bank of Nigeria (CBN)’s Governor, Godwin Emefiele, economic experts are optimistic that markets will likely have a positive outing this week.
President Bola Tinubu had on Friday, suspended Emefiele with immediate effect, a development that the government said was linked to an investigation into the governor’s office and its planned reforms of the financial sector.
Emefiele’s suspension had been expected after he drew sharp criticism in the run-up to the February presidential vote from Tinubu’s camp. Tinubu allies had accused Emefiele of trying to sabotage the election campaign when his plan to swap old naira bank notes caused severe cash shortages and triggered public outrage.
There have been concerns as to how the market might react to this news after it resumes from the June 12 holidays, however, experts predicted that there is likely going to be a positive outing despite the news as this is hinged on Tinubu’s inaugural speech.
Speaking during a programme monitored at the weekend, the Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the suspension did not come as a surprise as it was going to be a matter of time.
Yusuf noted that going by the President’s inaugural speech, something was going to happen especially when he spoke on unification of exchange rates, resentment on the naira redesign policy, reduction of interest rates amongst others.
“So that relationship between the duo was never going to work because most of the policies under the Emefiele’s administration somewhat distorted the business environment in the economy.
This is still early days and this suspension was announced on Friday and so our markets will begin to react effectively from Tuesday but generally the perception is that we need to undertake some critical reforms in the monetary policy space, I feel the market will react positively and I say that because some of the policies the President wants to reverse are policies that have been having very negative effect both on the economy, investments and welfare of the people and so the outcome for me will tilt towards positivity”, Yusuf said.
Meanwhile, data obtained from the FMDQ’s website revealed that total inflows into the Investors & Exporters Window (IEW) increased by 46.8 per cent month-on-month (m/m) to $1.14 billion in May 2023 compared to relative $775.70 million recorded in the previous month.
Although foreign inflows settled higher to $207.10 million (April: $96.20 million), it remains underwhelming relative to pre-pandemic levels (2019 FY monthly average: $1.56 billion) because of the lingering FX liquidity constraints, an overvalued
