Nigeria’s new central bank chief Godwin Emefiele took office on Tuesday with the immediate task of protecting a weak naira.
With government spending also expected to rise ahead of next year’s presidential election, the new governor will have no room to let up on monetary policy and will have to raise interest rates at some point over the next year, analysts say.
Emefiele’s appointment follows the departure of governor Lamido Sanusi, a vocal critic of the government’s record on tackling corruption, who was suspended by President Goodluck Jonathan in February.
His removal raised concerns about the bank’s independence and Emefiele will be closely watched by markets fearful of government interference at the bank.
The government accused Sanusi of irregularities in his handling of the central bank’s budget and President Jonathan has said the bank’s independence will remain sacrosanct.
Africa’s biggest economy, which imports around 80 percent of what it consumes, is struggling with a weaker currency, down 3 percent against the dollar this year, and dwindling foreign reserves, reports Reuters.
Political risk over February 2015 elections and a violent Islamist insurgency that has killed hundreds this year are also clouding Nigeria’s outlook, with the abduction of more than 200 school girls by Boko Haram making world headlines recently.