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The
governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi,
has said that the banking sector will feel the death of late Umar Musa
Yar’Adua more than any other sector.

Mr. Sanusi made this assertion when he paid a visit to the Kano State governor, Ibrahim Shekarau, over the weekend.

“My
hope is for our new president, Goodluck Jonathan, to continue from
where late president Yar’Adua stopped so that there will be sanity in
the banking sector.” He said that late Yar’Adua was a dogged fighter
against corruption, which virus has eaten up the entire system,
stressing that his death has created a negative impact that can’t be
quantified.

Mr. Sanusi added that the banking reform will go a long way in reviving our country’s economy.

He
added that late Yar’Adua was one of the few leaders in Nigeria that has
done well within the short time that he was in leadership.

No major policy shift

Finance
experts, however, stated that there is likely to be no major policy
shift in sight, following the demise of the president of Nigeria.

Renaissance Capital, an international finance firm, said no major policy course shift is being expected.

“Nigerian
authorities will continue to pursue a countercyclical macroeconomic
stance, as illustrated by the expansionary 2010 budget that was
recently approved by Goodluck Jonathan. We believe some of the key
reforms initiated under the Yar’Adua administration are likely to be
implemented and executed going forward.”

“Last
week, the Senate adopted the asset management company bill, which has
to be signed by Mr. Jonathan and will be a critical step to help
restore confidence in the banking system and the real economy as a
whole. Added to this, the petroleum industry bill is being discussed at
the parliamentary level and could be passed into law at some stage,
boosting the relevance of the oil sector in Nigeria’s domestic output.

“Furthermore,
Mr. Jonathan has promised that the 2011 general elections will be free
and fair, and recent and forthcoming changes at the Independent
National Electoral Commission are likely to be monitored closely in
this regard. The tackling of corruption also remains a top priority for
the new administration. Additionally, the sustainability of the peace
process in the Niger Delta region is seen as a fundamentally important
issue by top officials, notably as oil production has rebounded to
1.95-2.0mn bpd since Dec 2009.

Finally,
we do not expect the markets to be volatile post the passing of the
president, as the recent political environment has already been priced
in.

Indeed,
Jonathan has asserted himself incrementally, especially after
appointing a new cabinet, and has emerged as the country’s leader
domestically and internationally (following his trip to the US) amid
indications that key reforms in the pipeline would be addressed, in
areas such as the financial system, the petroleum industry and
electoral reforms.”

State of the economy

Afrinvest
West Africa, a finance and research analysis firm, said Nigeria’s
economic performance, in line with the late president’s policies, in
the first quarter of 2010, proved remarkably resilient.

In
a report, Afrinvest says provisional data provided by the National
Bureau of Statistic (NBS) indicates that real Gross Domestic Product
grew by 6.7 per cent in first Quarter 2010, up from the 4.5 per cent
recorded in the corresponding period in 2009.

“External
reserves stood at $41.0bn at the end of March, compared to $42.4
billion in January 2010; this is expected to cover imports for the next
three quarters. Oil production peaked at 2.4million barrels per day
(mbpd) in the last quarter of 2009 and remained relatively stable
around the 1.9-2.1mbpd range throughout Q1, following the return of
stability to the Niger-Delta through the federal governments amnesty
program.”

The
report also added that “Oil prices also rebounded, largely trading
around the $80.0 per barrel mark. The 2010 budget had initially been
predicated on a conservative oil price estimate of $57.0 per barrel; we
believe oil prices will remain around the $80.0 mark in the near term
as the global economy firms up”.

Nigeria’s
President Yar’Adua passed away on May 5 in Abuja. His health worsened
last year, forcing him to seek medical treatment in Saudi Arabia in
late November. While he returned to Nigeria in February 2010, he did
not publicly address the nation in the weeks afterwards, fuelling
speculation about his condition.

The
controversial reforms in the banking sector, endorsed by the late
president and carried out by the Central Bank Governor, who was also
nominated by the president, can be said to be the hallmark of the
president’s economic reforms.

The
reforms, which started mid last year, have seen the exit of about eight
bank chiefs, a bailout package of N620 billion (about $4 billion) and a
declaration of losses by majority of banks who have released their 2009
common year end results, running into billions of naira, but of course,
have achieved better transparency in the books of the banks and the
presentation of more stable banks.