Wheelbarrows to the rescue

YOU might think Godwin Emefiele, the governor of Nigeria’s central bank, had problems enough. The collapsing oil price has slashed Nigeria’s export earnings. Foreign reserves have fallen from more than $40 billion early last year to just over $30 billion now. In response Mr Emefiele (pictured) devalued the local currency, the naira, in November and again in February. The devaluations are stoking inflation. Like many other central bankers in commodity-exporting countries, he is faced with the unenviable choice of raising rates despite the damage to an already faltering economy, or leaving them be despite rising inflation and a swooning currency. Unlike other central bankers, however, Mr Emefiele has decided to compound the awkwardness of his position by getting involved in industrial policy as well.

In June the central bank said it would not provide foreign exchange for 41 categories of imports, ranging from wheelbarrows to private jets. The idea, Mr Emefiele says, is both to conserve dollars and to stimulate local manufacturing. “Central banks in developing countries like ours cannot sit idly by and concentrate only on price and monetary stability...

from The Economist: Finance and economics http://ift.tt/1MQlOa1