Quiet as it has been kept, shares of the Global X Nigeria Index ETF (NYSArca: NGE) are off 2.3% Thursday on nearly triple the average daily volume on news Nigerian President Goodluck Jonathan suspended Central Bank Governor Lamido Sanusi.
Although Sanusi’s term expires in June, his suspension could damage global investors’ appetite for assets in Africa’s second-largest economy behind South Africa.
“Analysts predicted that foreign investors would now be active sellers of assets in Africa’s second biggest economy, just when it had been attracting more interest than ever for the huge potential of its 170 million population and a backlog of work needed to update its inadequate infrastructure,” Reuters reported.
Sanusi was suspended, many believe, due to his criticism of Jonathan’s inadequate track record of fighting corruption, arguably one of the top issues that have kept global investors from becoming more enchanted with the country’s economic potential. Nigeria’s senate cannot intervene in the suspension, but can overturn Sanusi’s removal, should the situation reach that point.
The news comes with NGE in an already fragile place. The ETF entered Thursday down almost 11% year-to-date and 12.3% in the past month. That after Nigeria was one the best performing equity markets in the world last year. [Best Global Equity Markets by Single-Country ETFs]