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Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy - Politics - Nairaland

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Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Itulah(m): 6:09am On May 09, 2016
Pop quiz: Which oil rich economy hammered by the global slump in crude is in the throes of a full-fledged economic crisis — complete with rationing, civil strife and runaway inflation stoked by a weak currency?

If you guessed Venezuela, you'd be wrong. Although the South American country teeters on the edge of collapse and fits the above scenario, those same circumstances actually apply to Nigeria. Once a powerhouse of West Africa's economy, the effects of slumping oil prices have converged with mounting security concerns and widespread energy shortages.

The OPEC country, which produces more than 2 million barrels of oil per day, is resorting to rationing crude: In order to fill their tanks, citizens must endure long lines overseen by authorities.

Nigeria "is caught in a macro hurricane," famed short seller James Chanos told the annual Sohn Investment Conference last week. With currency reserves running low, the country could have "a big problem" within a few years, he said. Calling the country "a borderline failed state," Chanos added that he was shorting South African assets, in part because of their exposure to Nigeria.

In the year that Nigerians elected a new president, oil prices collapsed by at least 30 percent. This week, Nigeria's stock market staged a relief rally after the closely watched MSCI Frontier Markets Index decided to keep the country in the benchmark, after warning last month that Nigeria was at risk of being booted from the index.

Still, the outlook for Africa's largest economy remains grim. The extremist group Boko Haram has created significant political and security challenges for the embattled government of Muhammadu Buhari, and raise risks that could hit oil production.

"Nigeria is in trouble," Steve Hanke, a professor of applied economics at Johns Hopkins, told CNBC in an interview. Amid double-digit inflation, Nigeria's foreign reserves are dwindling as the government races to shore up a swooning currency, the naira.

Using a purchasing power parity metric, Hanke estimates that the country's prices are surging by a whopping 46 percent, far above the official rate of between 11 and 13 percent.

Weak growth — Nigeria's economy expanded by less than 3 percent last year — has done little to curb soaring food prices, which have risen every month since December 2015.

Meanwhile, oil prices remain firmly under $50 per barrel, heightening the risk of what consulting firm PricewaterhouseCoopers noted in a 2015 report could become a "security shock," as weak growth feeds political instability. Currently, the country's 2016 budget assumes an oil price of $38 per barrel.

Razia Khan, chief economist for Africa at Standard Chartered, expects crude will rise later in the year, but growth is likely to remain muted. Khan noted that the International Monetary Fund "expects growth to decline even further in 2016, to 2.3 percent."

Oil gives Nigeria around 95 percent of its foreign earnings. Should crude remain at current levels, PwC expects growth to contract and oil revenues to dwindle to $20 billion. Meanwhile, the currency has already overshot PwC's worst-case forecast for this year, blowing past 320 to the U.S. dollar recently.

"The currency is junk and the government is incompetent and corrupt," said Johns Hopkins' Hanke. "The only sure-fire way to solve all these problems is for Nigeria to officially replace its junk currency."

Nigeria still has limited access to capital markets, and a $6 billion currency swap agreement with China may help contain the naira's losses. Yet with oil still hovering near historic lows, analysts are skeptical Nigeria will see a turnaround anytime soon.

"Following a tumultuous year for the naira in 2015 we believe the any recovery in the currency will have to be supported by a marked improvement in the crude oil price," Standard Chartered's Khan said, adding that oil would need to rise to near $55 to offset the effects of an "oversupplied market."

— CNBC's Dawn Giel contributed to this article.

http://www.cnbc.com/2016/05/06/nigeria-goes-from-powerhouse-to-pariah-as-hurricane-hits-economy.html

2 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by searchng4love: 6:32am On May 09, 2016
Interesting read.
Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Surfboard(m): 8:25am On May 09, 2016
Lai Mohammed, now we are a pariah state. Hope you understand what that means now?

49 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by phayvoursky(m): 8:25am On May 09, 2016
NOW U SEE...

WHERE ARE D GUYS DT VOTED FOR CHANGE?


A POWERHOUSE IS NOW A HOUSE ON FIRE.

34 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by adedolapo4(m): 8:26am On May 09, 2016
Hmm. Sounds pretty bad

3 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by YourNemesis: 8:26am On May 09, 2016
Hurricane of economic saboteurs.

4 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Category1: 8:26am On May 09, 2016
[size=13pt]God will punish b*hari ...I woke this morning to look for fuel, I couldn't find any filling station selling ,I just wasted my money.
Everything in the market are so f*cking expensive, not even that they added little money in it, its high high money. Something selling for 50naira before is now 150naira, what rubbish is that?....and the useless old man can't even tell us what's on ground...his dirty mouth have been shut months now[/size]
sad

57 Likes 7 Shares

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by c4tnoelz: 8:27am On May 09, 2016
U can't give what you don't have

10 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by fumisexy: 8:27am On May 09, 2016
with time we will surprise other countries

3 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by busybrain123(m): 8:27am On May 09, 2016
Let me read the post before I comment... cheesy

Modify...




Waiting for Lie Muhammad to come and explain what this means...you know lie Muhammad never lies...

1 Like

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by allthingsgood: 8:28am On May 09, 2016
All this attack started the instant we signed agreement with China. The west is scared to their bones to what this deal can achieve. All of a sudden Nigeria is no longer desperate for there slavish loans!

30 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Sweetguy25: 8:29am On May 09, 2016
Our junk currency. Lol, that was funny. grin

Buhari the dullard junketeer has made our currency junk.

5 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by phayvoursky(m): 8:29am On May 09, 2016
fumisexy:
with time we will surprise other countries



SURPRISE OTHER COUNTRIES WITH WHAT?

NIGERIA HAS BEEN A SURPRISE TO ITSELF.

12 Likes 4 Shares

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by seyilabi(m): 8:30am On May 09, 2016
No matter what foreign financial institution says about us, am sure Nigeria will be great again.

17 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by yongnoble(m): 8:30am On May 09, 2016
It seems the wailing has gone international grin

Zombies, Oya over to you. Come and defend the indefensible

30 Likes 4 Shares

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by tucky200(m): 8:30am On May 09, 2016
allthingsgood:
All this attack started the instant we signed agreement with China. The west is scared to their bones to what this deal can achieve. All of a sudden Nigeria is no longer desperate for there slavish loans!
no mind them!

Bunch of hypocrites!

14 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by SylarsMcQuins: 8:32am On May 09, 2016
Oya Zombies ova to u, some and do wat u knw wat to do best.

5 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Udofire(m): 8:33am On May 09, 2016
From worse to worst. Only GOD can save us.

4 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by stephmike(m): 8:33am On May 09, 2016
its look pretty bad. God bless Nigeria

5 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Orikinla(m): 8:34am On May 09, 2016
The solution to falling price of oil is simple and can be done and the price will double within 20 days.
Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Lordave: 8:34am On May 09, 2016
allthingsgood:
All this attack started the instant we signed agreement with China. The west is scared to their bones to what this deal can achieve. All of a sudden Nigeria is no longer desperate for there slavish loans!

Scared to the bone indeed!

Did you just say you're no more desperate for their loans? Who controls the world bank? Hasn't Buhari agreed to take a loan from World Bank?

27 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by allthingsgood: 8:34am On May 09, 2016
phayvoursky:
NOW U SEE...

WHERE ARE D GUYS DT VOTED FOR CHANGE?


A POWERHOUSE IS NOW A HOUSE ON FIRE.

Be careful not to swallow every shite you are fed, especially from western media. Most of them don't even know where Nigeria is on the map, so why the sudden interest. When we were begging for their devilish loans they didn't know we were pariah, now that we have signed deal with China to boycott dollars, all of a sudden we are poor??


This is nothing but sabotage and it wont work!

17 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by RexTramadol1: 8:35am On May 09, 2016
Dem dey give us Mule, Gbefun!






All of us know say our contiri is ferri............
Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Splinz(m): 8:35am On May 09, 2016
Where is that shameless liar called Lai? That pariah State he falsely accused GEJ of running now stares him in the face.

33 Likes 4 Shares

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Nobody: 8:35am On May 09, 2016
An understatement this is compared to the real thing on ground.

3 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by oshe11: 8:36am On May 09, 2016
Itulah:
Pop quiz: Which oil rich economy hammered by the global slump in crude is in the throes of a full-fledged economic crisis — complete with rationing, civil strife and runaway inflation stoked by a weak currency?

If you guessed Venezuela, you'd be wrong. Although the South American country teeters on the edge of collapse and fits the above scenario, those same circumstances actually apply to Nigeria. Once a powerhouse of West Africa's economy, the effects of slumping oil prices have converged with mounting security concerns and widespread energy shortages.

The OPEC country, which produces more than 2 million barrels of oil per day, is resorting to rationing crude: In order to fill their tanks, citizens must endure long lines overseen by authorities.

Nigeria "is caught in a macro hurricane," famed short seller James Chanos told the annual Sohn Investment Conference last week. With currency reserves running low, the country could have "a big problem" within a few years, he said. Calling the country "a borderline failed state," Chanos added that he was shorting South African assets, in part because of their exposure to Nigeria.

In the year that Nigerians elected a new president, oil prices collapsed by at least 30 percent. This week, Nigeria's stock market staged a relief rally after the closely watched MSCI Frontier Markets Index decided to keep the country in the benchmark, after warning last month that Nigeria was at risk of being booted from the index.

Still, the outlook for Africa's largest economy remains grim. The extremist group Boko Haram has created significant political and security challenges for the embattled government of Muhammadu Buhari, and raise risks that could hit oil production.

"Nigeria is in trouble," Steve Hanke, a professor of applied economics at Johns Hopkins, told CNBC in an interview. Amid double-digit inflation, Nigeria's foreign reserves are dwindling as the government races to shore up a swooning currency, the naira.

Using a purchasing power parity metric, Hanke estimates that the country's prices are surging by a whopping 46 percent, far above the official rate of between 11 and 13 percent.

Weak growth — Nigeria's economy expanded by less than 3 percent last year — has done little to curb soaring food prices, which have risen every month since December 2015.

Meanwhile, oil prices remain firmly under $50 per barrel, heightening the risk of what consulting firm PricewaterhouseCoopers noted in a 2015 report could become a "security shock," as weak growth feeds political instability. Currently, the country's 2016 budget assumes an oil price of $38 per barrel.

Razia Khan, chief economist for Africa at Standard Chartered, expects crude will rise later in the year, but growth is likely to remain muted. Khan noted that the International Monetary Fund "expects growth to decline even further in 2016, to 2.3 percent."

Oil gives Nigeria around 95 percent of its foreign earnings. Should crude remain at current levels, PwC expects growth to contract and oil revenues to dwindle to $20 billion. Meanwhile, the currency has already overshot PwC's worst-case forecast for this year, blowing past 320 to the U.S. dollar recently.

"The currency is junk and the government is incompetent and corrupt," said Johns Hopkins' Hanke. "The only sure-fire way to solve all these problems is for Nigeria to officially replace its junk currency."

Nigeria still has limited access to capital markets, and a $6 billion currency swap agreement with China may help contain the naira's losses. Yet with oil still hovering near historic lows, analysts are skeptical Nigeria will see a turnaround anytime soon.

"Following a tumultuous year for the naira in 2015 we believe the any recovery in the currency will have to be supported by a marked improvement in the crude oil price," Standard Chartered's Khan said, adding that oil would need to rise to near $55 to offset the effects of an "oversupplied market."

— CNBC's Dawn Giel contributed to this article.

http://www.cnbc.com/2016/05/06/nigeria-goes-from-powerhouse-to-pariah-as-hurricane-hits-economy.html
exactli y I hate Nigeria!




These set wud bliv dia party Loyalists n those set wud bliv dia own party loyalists nt given an iota of tot if dey r lieing or not!






I rili nid to travel out of dis country to Abuja!

1 Like

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Pavarottii(m): 8:36am On May 09, 2016
Buhari is now corrupt! cheesy

PMB d economy terrorist.

9 Likes

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Ooni: 8:37am On May 09, 2016
That is their business

all i know is that ondo produces 1.2 billion barrels of oil per minute

lagos offshore will produce 3 billion barrels of gas every second

ogun has unlimited deposit of uranuim

some people think ekiti produce only banana but ekiti has more gold than south africa and UAE put together

to hell with Niger delta oil. We can stay alone whether the economy is good or bad. I want my fellow sw youths to support me in my clamour for a south west that is not dependent on niger delta oil. I want us to shame the flaatheads

9 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Kowale: 8:37am On May 09, 2016
Hmmm. O ga
Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Nobody: 8:38am On May 09, 2016
allthingsgood:
All this attack started the instant we signed agreement with China. The west is scared to their bones to what this deal can achieve. All of a sudden Nigeria is no longer desperate for there slavish loans!


Wow so that was all you got from this? Wow! How old are you?

11 Likes 1 Share

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by Vado(m): 8:46am On May 09, 2016
This country isn't working and that is frankly because of its messed up foundation. We are living a lie.

1 Like

Re: Nigeria Goes From Powerhouse To Pariah As 'hurricane' Hits Economy by allthingsgood: 8:46am On May 09, 2016
lestat:


Wow so that was all you got from this? Wow! How old are you?

Pls shut up wailer!
Its only bad news that excites you. Rubbish

3 Likes

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