History is repeating itself in Nigeria, where the more President Muhammadu Buhari is urged to devalue the naira, the more he digs in his heels. Investors are beginning to surmise that politics -- rather than economics -- will determine the currency’s immediate future.
Even as growth slows, inflation rises and investors flee Africa’s biggest oil producer, analysts in a Bloomberg survey are backing away from estimates a devaluation will take place before the third quarter. Buhari, 73, has made it clear that he, not the central bank, has the final say on currency policy -- and that he is against taking that step, just as he was during his first stint in power in the 1980s. The former general is loath to be seen by voters as capitulating to foreign investors and the International Monetary Fund, both vocal critics of his stance, according to New York-based Teneo Intelligence.