Growth in Nigeria, already suffering from the oil price collapse, will be further impacted by the unorthodox monetary policy being enacted in the country, which � contrary to its professed aims � is stifling existing domestic non-oil production. Looser monetary and fiscal policy will not be sufficient to compensate. ...The protection of the naira is a crucial component of Buhari s overarching economic and political strategy for Nigeria. This determination to maintain the exchange rate at NGN-------/ USD, in the face of mounting disagreement from business voices and the parallel market � on which the naira is trading at around NGN---/USD in early February ---- � has led to investors biding their time in the expectation of an eventual devaluation which would render their investments less valuable. In order to facilitate the currency peg while trying to maintain reserves, capital controls have been imposed restricting access to dollars for the import of a range of goods. ...Equally, others have said that they were not given sufficient time to prepare for the ban on imports of certain goods. Whether the strategy would work in boosting domestic manufacturing in - Business Monitor International Ltd www.bmiresearch.com
...Growth in Nigeria, already suffering from the oil price collapse, will be further impacted by the unorthodox monetary policy being enacted in the country, which � contrary to its professed aims � is stifling existing domestic non-oil production. Looser monetary and fiscal policy will not be sufficient to compensate. ...Given the massive reliance on the oil sector, and the devastating effect fiscal leakage has had on Nigeria s develop- ment, these are worthwhile pursuits. However, the president � and Nigeria � must be prepared for hardship in their quest in the near term and we contend that too dogmatic a pursuit of these ideals will endanger the country s ability to attract foreign investment. The ramp-up in spending that the Nigerian government has proposed will outpace any growth in revenues, and the fiscal deficit will widen as a result. ...In light of the recent monetary policy meeting in Nigeria we maintain our forecast that there will be a ---bps cut to the policy rate in ----. Growth stimulation remains the primary concern, and with a naira devaluation looking increasingly uncertain, this will become even more important.
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