Nigeria market reformers need support beyond election
A triumvirate of
reformers – Central Bank governor, Lamido Sanusi, AMCON chief
executive, Mustapha Chike-Obi, and SEC director, Arunma Oteh – has
turned Nigeria’s financial markets inside out over the past 18 months.
A $4 billion
commercial bank bailout in 2009 and the sacking of eight bank chiefs
for reckless lending, engineered by Mr. Sanusi, was thefirst strike,
shocking a corporate elite that was unused to close oversight.
Ms. Oteh, who took
office in January 2010, pursued stockbrokers with equal vigour, taking
260 individuals and entities to a special tribunal over alleged price
fixing and insider trading. AMCON, established last year to soak up
non-performing loans in exchange for government bonds, is hoping to
rebuild commercial banks’ balance sheets after the bailout and deepen
the fledgling debt market as it does so. The reform drive has pleased
foreign investors.
But by demonstrating the importance of a few individuals to
financial reforms, the triumvirate’s success indicates the reforms’
vulnerability. Next month’s national elections could cut the political
support that the reformers enjoy, particularly if a new cabinet is less
willing to give them free rein.
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