Nigeria central bank meets after months of limbo

Abuja, Nigeria | AFP | The Nigerian central bank’s Monetary Policy Committee will hold its first meeting this year on Wednesday after a political standoff between the executive and the senate prevented a quorum for months.

Experts predict that the committee will hold rates at a record high of 14 per cent before cutting later this year if inflation continues to slow.

Inflation has been steadily coming down in West Africa’s largest economy, opening the door for easing monetary policy, though there are still concerns about foreign-exchange pressures.

“I expect they’ll keep rates on hold at 14 per cent,” said John Ashbourne, Africa economist at London-based Capital Economics.

“We think that rates will be cut later this year but they’ll wait for inflation to ease a little bit before moving.”

Since its last meeting in November, several new members have joined the committee, and they were finally approved by the senate at the end of March.

In a spat typifying political dysfunction in Nigeria, the senate refused to confirm the committee members in protest of President Muhammadu Buhari’s earlier appointment of anti-graft head Ibrahim Magu.

After being deadlocked for months, the senate finally “decided to do the right thing”, according to a senate source, and confirmed the new members.

Nigeria is recovering from its worst recession in 25 years after the crash in global oil prices in 2014.

As a result of increased oil revenue, Nigeria’s economy expanded 0.8 per cent in 2017, but growth in non-oil sectors remains tepid.