Analysts accuse Nigeria of unconventional economic policies

Financial analysts have accused the country’s policymakers of using “unconventional economic policies” that are becoming difficult to predict, particularly, the Central Bank of Nigeria (CBN).

Already, seven of 19 analysts in survey have predicted interest-rate cut, adding that the ongoing Monetary Policy Committee’s meeting might lower rates, as it will benefit government through low cost borrowings, according to Bloomberg.

The analysts noted that while African central banks from Ghana to South Africa are tightening monetary policy to protect their economies from plunging currencies, speculations are rife that CBN will reduce the benchmark rate tomorrow, which would be the first in six years.

The Chief Executive Officer of the Financial Derivatives Limited, Bismarck Rewane, said: “People are divided because they are starting to believe that decisions are being made devoid of any economic rationale. Some of the decisions being made now are made with political rationale.”

CBN Governor, Godwin Emefiele, has resisted pressure and calls for devaluing the currency, while imposing foreign-exchange restrictions on imports to limit demand.

The policy has also received the endorsement of President Muhammadu Buhari and his deputy, Yemi Osinbajo.

The analysts have maintained that lower interest rates will help support Buhari’s administration as it ramps up borrowing to fund the budget and compensate for drops in oil earnings.