Are Nigeria’s reforms driving market stability?

Nigeria's Vice President Kashim Shettima recently shared his optimism about the government's ongoing reforms, highlighting the potential for a stable future for the country. In a recent CNBC Africa interview, Mustafa Chike-Obi, Chairman of the Bank Directors Association of Nigeria, provided valuable insights into the key takeaways from the country's economic reforms, particularly focusing on the execution of monetary and fiscal policies. Chike-Obi emphasized the importance of understanding the three crucial steps to achieving a public good: defining the objective, setting the supporting policy, and executing the policy effectively. While acknowledging the merit of recent policies such as removing oil subsidies and rationalizing the FX policy, he raised concerns about the execution and the need for a more strategic approach. Discussion revolved around the monetary policies, particularly the FX reforms and the efforts to attract foreign investors. Chike-Obi emphasized the significance of engaging with global financial hubs like Washington, New York, London, and Tokyo to secure the necessary funds to stabilize Nigeria's currency. He suggested the implementation of special treasury bill auctions to attract foreign investment and stressed the importance of moving beyond cosmetic measures to address the root causes of economic challenges. The conversation also delved into the challenges faced by the industrial sector, with a spotlight on the critical issue of power supply. Chike-Obi underscored the need for a rigorous selection process to appoint qualified individuals to oversee key sectors like power and finance, ensuring a focused and effective approach to policy execution. On the fiscal front, the dialogue touched upon revenue generation and the broader economic reform agenda of the government. While acknowledging the ambitious targets outlined in the economic plan, Chike-Obi cautioned against unrealistic objectives like achieving a $1 trillion economy in ten years. He emphasized the importance of aligning fiscal and monetary policies to avoid conflicting priorities that could hinder economic growth. The interview shed light on the current focus on combating inflation and stabilizing the currency, highlighting the need for clear communication and coordination between fiscal and monetary authorities. Chike-Obi emphasized the pivotal role of the president in setting the overarching objectives and ensuring alignment between policy directions. In conclusion, Chike-Obi called for transparency, consultation, and collaboration among key stakeholders to create a cohesive and coherent economic strategy. He expressed support for the government's intentions while stressing the importance of clarity and consensus in decision-making to drive sustainable economic growth and market stability.