Nigerian reform drive falters, threatening Africa's biggest economy

investing.com:

By MacDonald Dzirutwe and Libby George

LAGOS/LONDON (Reuters) — Nigerian President Bola Tinubu's lightning-fast reform push after taking office in May sparked hope that his administration would be a business-friendly antidote to mounting economic troubles facing Africa's biggest economy.

Fast forward to more than 100 days in office, and the key planks of his economic overhaul — unshackling the naira from its rigid regime, and allowing fuel prices to rise — are coming loose.

The naira hit a record low of 1,000 to the dollar on the black market this week, widening the gap with the official rate, which stood at 785 on Thursday.

Petrol pump prices, meanwhile, have not budged since July — despite a more than 30% rise in oil prices.

Some now fear Tinubu will not be able to wean Nigeria off the costly policies that have stymied investment and throttled economic growth.

«Momentum just seems...almost in reverse,» said David Omojomolo, Africa economist at research firm Capital Economics.

Public anger is swelling as inflation spirals higher, however, and Nigeria's two biggest workers' unions are planning an indefinite strike next week to protest over a cost-of-living crisis.

«Sentiment towards Nigeria has been continuing to sour as the initial reform momentum under President Tinubu's administration has faded,» said Tellimer analyst Patrick Curran.

DOLLAR DELAY

For years, Nigeria has tightly controlled the official naira rate, even amid declines in the price of oil, sales of which bring in 90% of the country's foreign currency supply.

But providing dollars at an artificially low rate has led to a yawning gap between official and black market rates, leaving businesses and investors unable to access dollars. The central bank has