By Okey Ndibe
President Muhammadu Buhari has yet to outline the
direction and goals of his economic policy. Even so, major players in the
country’s economy are already feeling the impact of specific policy decisions
as they are emerging. For a wide segment of these critical players, the impact
is negative, even grave.
Under Mr. Buhari’s watch, the Central Bank of Nigeria
The motives behind the bank’s recent
monetary policies may seem sound—as former Governor Peter Obi recently told
reporters in Awka, the capital of Anambra State—but Nigerians appear to be
worse off for them.
With the price of crude oil showing no signs of going north soon,
Nigerians are in for a long season of hard times. We just came off an electoral
season in which all manner of politicians mopped up dollars for their
campaigns. If you factor in the flight of capital—as many foreign and local
institutional investors, scared of post-election uncertainty, pulled out of the
stock market—the picture is of an economy certain to pass through a significant
phase of scarcity and painful adjustment. The pressure on the naira remains
enormous, and has led to a significant drop in the currency’s value.
The CBN’s response has been to use monetary policies to defend the
naira. In pursuit of this defensive stance, the bank has chosen the role of an
umpire determined to favor some players in the economy while rigging out other
players. It has given the red card to importers of certain commodities. The
bank also made it significantly more difficult for Nigerians to make
transactions with their domiciliary accounts. It prohibited cash deposits into
such accounts, and set new limits for cash withdrawals from accounts. During
foreign trips, the daily withdrawal limit is N60, 000 or $300, a rule that
defeats the gain of joining the global financial village of electronic
bankcards.
