Financial Times UK Calls “Nigeria Falling Economy” The Height Of Foolishness

Leading international business publication, The Financial Times UK has described the economic policies of the Buhari administration as the ‘height of foolishness’.

Steve Johnson, Deputy editor of the FT’s EM Squared section wrote
Copying Venezuela’s exchange rate policy and China’s failed equity market strategy might seen the height of foolishness.
The entire article is reproduced here:
Nigeria plans to create a $25 billion fund with public and private financing to modernize infrastructure and avoid a recession.

Copying Venezuela’s exchange rate policy and China’s failed equity market strategy might seem the height of foolishness.
But, at least in the opinion of John Ashbourne, Africa economist at Capital Economics, that is precisely what Nigeria, the continent’s largest economy, has just done.
“Low oil prices are battering Nigeria’s export-dependent economy, but it’s the government’s market-distorting response that risks pushing the country into a Venezuela-style crisis,” Mr Ashbourne says.
“Nigeria is sliding towards a Venezuela-style FX regime and adopting a Chinese-style stock market circuit breaker. Neither will reassure foreign investors, many of whom seem to be eyeing the exits.”
Both measures were announced after markets closed on Friday, January 15.
The circuit breaker on the Nigerian stock exchange, one of the worst performing in the world this year with a fall of 17.7 per cent, will pause trading for 30 minutes if stock prices fall 5 per cent. Trading will cease for the day if it is triggered twice in a session, or after 1.45pm.

                                                                                  This month, Beijing abandoned a similar policy after just four days, concluding that in a falling market the existence of the circuit breaker encouraged more selling as traders rushed to exit while they could.