THE AFTERMATH OF SANUSI’S SUSPENSION

After the suspension of Sanusi Lamido Sanusi yesterday, there is much uncertainty about the future of the Nigerian financial markets.

Sanusi Lamido Sanusi. PHOTO: WEF

“Naturally we expect reactions in the financial markets, but hopefully markets would be assured by the fact that Sarah Alade who has been in charge of monetary policy and who has been part of the team at the central bank is holding forth at least in the interim,” Opeyemi Agbaje, CEO, RTC Advisory Services told CNBC Africa.

Dr Sarah Alade who is the current Deputy Governor of the Central Bank has been appointed by the presidency to serve within an acting capacity.

“Sarah Alade is in safe hands but it is not about the capacity to run the central bank that is the issue. It is the signal that you send out to the investors both domestic and international about stability in the economic system and about the respect for the standard ways of doing things. This is the problem,” Bismarck Rewane, CEO Financial Derivatives said.

Analysing the effects of Sanusi's suspension

In a statement released earlier today by the presidential spokesperson Reuben Abati, the governor of the Central Bank of Nigeria Sanusi Lamido Sanusi was suspended for financial recklessness and misconduct.

Rewane believes that it’s important to reassure the markets that this is not a typical way of acting and that it has never happened in the history of of the West Afriocan state country and many other countries.

David Cowan, Chief Economist at Citi believes that what is more interesting, is whether it actually increases or decreases uncertainty and that markets looking at it from outside, need to bear those things in mind.

“The first of this, is the unfortunate timing because it happened at a time when generally emerging markets are under pressure and Nigeria sort of moved into that cycle so that is a problem, Cowan explained.

According to Cowan, as Sanusi was expected to leave in June, the ball is now in the authorities’ court as they would have to speed up the process of appointing a new governor.

“Once that person is in place, that could create some certainty back in the market so its short term uncertainty but it could lead to greater medium term certainty… when the markets open, there will be some exiting from initial positions but not as much as people think,” he added.