The uncertainty on whether the CBN governor would remain in office till the end of his tenure and the mysteries of who would succeed him should be properly managed if government is interested in foreign portfolio investment says Afrinvest, a top research company and financial advisor.

“The uncertainty surround (sic) this development should be quelled sooner to avoid adverse medium term effects, especially from foreign portfolio investors”, said Ike Chioke, chief executive officer (CEO) of the company

According to the firm in its January Inflation Report seen by Daily Newswatch, the situation also risk scuttling other well-meaning plans by the monetary authorities including that of price stability.

Reports had it that the head of the apex bank, Sanusi Lamido Sanusi was asked to resign by President Goodluck Jonathan, a request Sanusi bluntly refused to accede to, vowing to serve out his tenure which expires in June.

Daily Newswatch said that this  followed allegations that Sanusi leaked to the media a letter notifying the president of the misappropriation of nearly $50 billion.

Afrinvest warns that the choice of Sanusi’s successor would determine whether price stability would continue.

“The choice of candidate will determine the direction of policy and the likely continuation or end to the current CBN’s price stability focus.

Price stability, the firm known for the Nigeria International Debt Fund says, “is expected to preserve and further attract   Foreign Portfolio Investors (FPI) to the Nigerian markets in terms of the risk-adjusted return on their portfolio”, if preserved.

Daily Newswatch had also reported a fort night ago that investors may have started reacting to Sanusi’s imminent exit from the Central Bank of Nigeria as they switch to less risky investment class for fear that his successor may not be as bullish as him in fending off inflation.

Offshore investors are, buying up treasury bills and exiting long-term bonds and stocks.

Foreigners account for around 60 percent of stock trading on the local bourse, stock exchange data show.

“Net outflow in Nigeria would put pressure on bond yields … Overall, foreign investors are likely to move towards the short-end of the yield curve to reduce risks associated with currency weakening,” Angus Downie, head of economic research at Ecobank told foreign media.

“The lack of information on potential candidates to replace Sanusi is a concern. It’s possible his replacement could be keen to loosen policy given relatively low inflation,” Downie said.

There could be further capital reversal in Nigeria when the U.S. Federal Reserve fully tapers its bond buying programme, which has kept emerging markets awash with cash, analysts say.