Nigeria’s currency fell and bond markets closed Thursday following news that the central bank’s governor, Lamido Sanusi, had been dismissed by President Goodluck Jonathan on allegations of “financial recklessness.” The move is fueling concerns among experts about the depth of corruption in one of Africa’s fastest-growing markets.
This action “only reinforces concerns that the government is intent on eroding the independence of the CBN, which until now has been one of the more credible institutions in the country,” Capital Economics Africa economist Shilan Shah wrote Thursday in a note.
Sanusi has long been vocal about government corruption. He recently wrote to parliament about the state-owned Nigeria National Petroleum Corporation, which he claimed owed the federal government $20 billion. The letter, leaked in December, was not the first time he had drawn attention to corruption among state officials.
In a phone interview with CNBC Africa, Sanusi, who was out of the country, said that he was concerned about the future of the institution.
“I have been fortunate to do some good work on the banks in terms of stability, I would not want to see all of that unravelled,” he said.
After the news, the naira spiked to a rate of 169 per American dollar, up from 165, its biggest swing since 2009.
“This will be a significant negative for the Nigerian naira and Nigerian financial markets,” said Razia Khan, head of Africa research at Standard Chartered, according to CNBC.
“Investors will pay attention to whichever successor is announced, but this is unlikely to sit comfortably,” he added.
When asked whether he thought the action was political, Sanusi replied: “I think the answer to that is obvious, but I’m not going to comment on that.”
Godwin Emefiele, managing director of Zenith Bank, will be installed as the next governor in June, pending approval from the Nigerian senate. In the meantime Sarah Alade will take over as acting governor.