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Nigeria Central Bank Must Be More ‘Political,’ Tinubu Aide Says - BLOOMBERG
BY , Bloomberg News
A street currency dealer holds Nigerian 1000 naira banknotes at a market in Lagos, Nigeria, on Monday, Sept. 25, 2023. The Nigerian naira extended its slide and hurtled toward the 1000-per-dollar mark in street trading, as the central bank held back from supplying dollars to a panic-stricken market. Photographer: Benson Ibeabuchi/Bloomberg , Bloomberg
(Bloomberg) -- A senior aide to Nigerian President Bola Tinubu urged the central bank to pay attention to the political impact of its decisions, amid a public backlash over the fallout from recent economic reforms.
In an article on the “dilemma” facing Central Bank of Nigeria Governor Olayemi Cardoso, Tinubu spokesman Tunde Rahman reflected on the collapse in the Nigerian currency, as well as criticism over plans to relocate some of its staff away from the capital, Abuja.
“The CBN governor must always pay attention to the political ramifications of his decisions,” Rahman said in the op-ed, shared via the Presidency’s X handle and posted on the government’s website. “He must be political without being partisan.”
Cardoso next week leads the first meeting of the monetary policy committee since July, at which the central bank is expected to raise interest rates sharply to support the currency and combat inflation.
The article did not criticize Cardoso’s policy decisions since his appointment by Tinubu in September. It also sympathized with the tough task he faces in stabilizing the naira, which has fallen by almost 70% against the dollar since its currency peg was loosened in June.
Currency weakness, alongside Tinubu’s removal of widely-criticized fuel subsidies, have sent inflation surging to a nearly three-decade high of 29.9% in January.
That’s triggered public protests over the soaring cost of living and Tinubu is being closely watched to see if he backtracks on the reforms – which he initiated after taking office in May — to limit their political cost.
‘More Flexible’
The president “does not micromanage those he gives responsibilities to where their unique expertise and experience are called to service,” Rahman wrote. Still, he urged Cardoso “to be a little more flexible particularly in matters that have wider political connotations.”
Cardoso has vowed to return to orthodox central banking after a number of years in which the institution blurred the lines between monetary and fiscal policy.
His predecessor Godwin Emefiele was removed from office by Tinubu and subsequently charged with crimes including fraud. He has denied the allegations and his trial is ongoing.
