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Nigeria’s economy has no direction under Buhari – Experts

First Bank Nigeria

Nigerian equities tumbled the most since April 8 and the naira plunged in informal trading amidst concerns Nigeria’s President Muhammadu Buhari, who took office at the end of May, will further delay naming his much awaited cabinet.

The Nigerian Stock Exchange All Share Index declined for the first time in two days to wipe out this week’s advance, as three shares fell for every one that gained.

The gauge has dropped 8.2 percent since reaching its 2015 peak on April 2, the day after Buhari was declared the election winner.

The Nigerian naira fell on the parallel market trading Wednesday ,as importers sought alternative sources for dollars after the Central Bank stopped foreign-currency funding for some imports.

The currency declined to 230 per dollar from 226 on Tuesday, Aminu Gwadabe, president of the Association of Bureaus de Change of Nigeria, said by phone from Lagos.

The currency traded at 215 per dollar last week before the new restrictions, Gwadabe said.

In interbank trading, the naira advanced 0.1 percent to N198.85 per dollar at 12.05 p.m. in Lagos. The nation’s foreign-currency reserves have declined 16 percent this year, to $29 billion.

Buhari, 72, who defeated Goodluck Jonathan in March elections, postponed naming his cabinet until September to drive out corruption before appointed ministers arrive to take their posts.

The delay comes as a disappoint to investors expecting tighter fiscal policy, a devaluation of the local currency and a greater focus on tax collection after a drop in oil prices hammered Nigeria’s finances, Alan Cameron, an economist at Exotix Partners Ltd., said by phone from London.

“Investors are dissuaded by the fact that the present government have not given a direction for the economy,” David Adonri, chief executive officer of Lagos-based Lambeth Trust and Investment Co. Ltd., said by phone. “There is very low demand for equities. People are not buying, forcing stocks to sell lower.”

The index dropped 2 percent to 32,797.89 as of 2:15 p.m. in Lagos. Neimeth International Pharmaceuticals Plc led losers, falling 7.9 percent, while Evans Medical Plc, dropped 5 percent to the lowest since February 2013. Seplat Petroleum Development Co. rose 4.1 percent to the highest since May 21.

Source: Businessday

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