Market News

BY  William Clowes, Bloomberg News

(Bloomberg) -- Nigerian President Bola Tinubu criticized the country’s central bank in his inaugural speech, signaling there will be a change in how the monetary authority manages policy. 

Monetary policy requires a “thorough housecleaning,” Tinubu said on Monday after taking the oath of office, with Central Bank of Nigeria Governor Godwin Emefiele in attendance. The bank must work toward unifying the exchange rate, a reform that will “direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy,” he said.

Nigeria’s $10 Billion Fuel Subsidies Are ‘Gone,’ Tinubu Says

The incoming president also used his address to call for a reduction in borrowing costs to “increase investment and consumer purchasing in ways that sustain the economy at a higher level.” Emefiele has increased rates by 700 basis points in the past year in a bid to curb inflation, which accelerated at the fastest pace in 18 years in April. The bank has said it’s prepared to raise rates further. 

Emefiele’s term as governor is scheduled to end in in June next year.

On the campaign trail, Tinubu’s allies frequently attacked Emefiele’s attempt to replace high denomination banknotes in the run-up to February’s elections, alleging that the cash shortage it caused was a deliberate bid to undermine the ruling party’s prospects.

Meanwhile, Nigeria’s secret police – the State Security Service – has been investigating Emefiele for alleged offenses including corruption. Two court orders issued in December have frustrated the agency’s efforts to detain the governor.