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New Nigeria central bank governor takes post

Tuesday - 6/3/2014, 11:00am  ET

MARAM MAZEN
Associated Press

LAGOS, Nigeria (AP) -- Nigeria's new central bank governor takes office Tuesday and is expected to keep a lower public profile than the suspended governor he has replaced, an analyst said.

Incoming governor Godwin Emefiele, the former managing director of Zenith Bank Plc, comes from a long career in banking.

President Goodluck Jonathan had suspended Lamido Sanusi in February after Sanusi accused the state-run Nigerian National Petroleum Corp. of withholding $20 billion from state coffers. Jonathan suspended him over accusations of financial recklessness.

"The Sanusi dismissal had little to do with monetary policy, but rather stemmed from his outspoken criticism of government corruption and waste," Philippe de Pontet, Africa director at Eurasia Group said in an emailed statement. "Emefiele will keep a low public profile on these issues, but will retain his predecessor's core policy leanings."

A controversial figure at home, Sanusi was highly respected among foreign investors who had confidence in his transparent methods in running the bank. Sanusi rescued the banking sector from a near collapse in 2009, as he fought mismanagement in the sector. He fired the chief executives of eight banks two months after he took office in 2009. He was named central bank governor of the year by London-based The Banker magazine in 2011.

Foreign reserves started declining last year, putting pressure on the naira. Sanusi said the billions of dollars held by Nigerian National Petroleum Corp. should have been in the reserves supporting the naira. NNPC declines it has kept any owed funds from the treasury.

During the Senate confirmation in March, Emefiele said he agreed with the main policies of the central bank under Sanusi. The bank kept monetary policy tight, which has helped boost foreign currency reserves, stabilize the naira and keep inflation within the bank's target.

Emefiele takes over a central bank whose deputy governors carried on the same policies since Sanusi's suspension. That helps reassure investors that the bank's core system is strong and that it will keep similar goals.

"The Jonathan administration is not likely to meddle directly in the central bank under Emefiele, having gotten a clear negative signal from markets after the Sanusi ouster," said de Pontet.


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