What’s Happening in Nigeria’s Economy?
7:09 AM EST DEC 19, 2014


Russia has been perhaps the most high-profile victim of the recent oil crisis, but further afield, the Nigerian economy is also being hamstrung by crashing prices despite the central bank’s best efforts to stem outflows. So what’s happened, what measures have been taken and why does it all matter, in Nigeria and beyond? Here’s the short answer.

How dependent is Nigeria's economy on oil?
Africa’s top economy and crude producer has grown 7% a year for the past decade. As retail and telecommunications companies have taken off, the oil industry has shrunk to a more balanced 14% of economic activity. Nonetheless, oil and natural gas still make up almost all of Nigeria’s exports and around 80% of government revenue, according to the International Monetary Fund. Brent crude has slipped more than 45% year-to-date and that is seriously damaging the value of Nigerian exports and assets.

How have markets fared so far?
The most obvious sign of the pressure that the slipping oil price is exerting on the Nigerian economy, is in currency markets.  The naira has fallen more than 17% so far this year against the dollar as investors have pulled out, and on Thursday it hit yet another record low of 187.40 against the buck. In December alone, the naira has depreciated by 5%.

Equity markets are feeling the heat too. The Nigerian all-share index is 15% lower this month and down almost 30% so far this year. Nigeria has three dollar bonds outstanding which have all dropped in recent weeks too. Nigeria has revised its budget on the assumption that oil will hover around $65 a barrel, which is still higher than current prices. The country’s economy is now expected to grow 5.5% this year, rather than the 6.4% previously forecast.

“We fear that the currency’s sharp depreciation is likely to impact negatively on inflation as Nigeria is a very import-intensive market,” Barclays economists write in a note.
What measures have been taken to limit damage?
The Nigerian central bank has implemented a number of measures in recent weeks to try to control the situation. In early November, the bank barred importers of goods, including electronics, generators and telecommunications equipment, from procuring dollars at its foreign-exchange auctions. Later in the month, it raised its key interest rate by one percentage point to a record high of 13%. Since then, the central bank has also intervened several times, according to traders, by selling dollar reserves to prop up the naira.

This week, it banned dealers from depositing currency-trading funds overnight, preventing traders from placing bets for or against a single currency at the close of a trading session. So far though, all of these measures appear to have had little impact though. The naira remains stubbornly pinned close to a record low against the dollar and economists have said that until the price of oil drastically rises, Nigeria will suffer.
How important is the Nigerian economy to Africa?
In a word: very. In April this year, and as a result of efforts to measure one of the world’s biggest informal markets, the country’s National Bureau of Statistics said that Nigeria’s nominal gross domestic product was $510 billion in 2013, which was 89% larger than previously estimated, and $190 billion more than South Africa’s slow-growing economy.
How did it rise to the top?
Nigeria’s rise is primarily a triumph of demographics. Its population will be seven times as large as South Africa’s by 2050, the U.N. projects. That trajectory is drawing investment and emboldening businesses. Nissan Motor Co., General Electric Co. and Procter & Gamble are just some of the multinationals that have invested in Nigeria of late. Last month, Carlyle Group LP, a private-equity firm, bought a $147 million minority stake in Nigeria’s Diamond Bank PLC, betting that a new mobile banking service will help rapidly boost the lender’s customers and profits. Separately, private-equity firms are considering bids for drinkscompany Chi, a person familiar with the company said in November.

But the country’s recent plight does raise questions over how long investors will be willing to battle with Nigeria’s myriad woes. Nigeria is facing other problems. Its government is heading toward a costly presidential election in February, and is also spending around $6 billion a year battling the Islamic insurgency Boko Haram, which on Tuesday kidnapped at least 191 women and children from a northeastern village.

-       Drew Hinshaw, Patrick McGroarty and Simon Clark contributed to this post

http://blogs.wsj.com/briefly/2014/12/19/whats-happening-in-nigerias-economy-the-short-answer/?mod=e2tw

Nigeria gradually turning to a laughing stock...Ohmatshe oh!!

The should stop mocking us because we will still survive it. God bless Nigeria!!

Firefire:


A roaring lion kills no game.

Let the negative media opposition called APC continue to throw all their missile out.


International disgrace is imminent come February 14th 2015 Insha Allah!

Hahahahahahahaahahahaha...wen did u com out?

Nigerian economy?
Does Nigeria have an economy.
A pretend economy which is resistant that basic rules of economics.

Where is the mockery in this article ?

Firefire:


A roaring lion kills no game.

Let the negative media opposition called APC continue to throw all their missile out.


International disgrace is imminent come February 14th 2015 Insha Allah!

but I told you to stop smoking wet weeds

fresh air

Many people are ignorant that they think myopically, the reason oil price and nigerian currency is falling is a way Usa used in punishing Russia but they think is nigeria's internal problem. Smh...check russias economy is about crumbling and their no1 source of income is through oil and gas...

okiezman:

Many people are ignorant that they think myopically, the reason oil price and nigerian currency is falling is a way Usa used in punishing Russia but they think is nigeria's internal problem. Smh...check russias economy is about crumbling and their no1 source of income is through oil and gas...

So, u want to tell me dat common sense didn't tell you dat sooner or later wt d way Gej and his clowns were administering Nigeria dat our economy wasn't alredi doomd 2 crumble? Guy, in 2015 we will use d ballot paper to speak our mind...Relax.

August21:
So, u want to tell me dat common sense didn't tell you dat sooner or later wt d way Gej and his clowns were administering Nigeria dat our economy wasn't alredi doomd 2 crumble? Guy, in 2015 we will use d ballot paper to speak our mind...Relax.

Guess you got hold of a nice phone gej is not the reason why oil price fell or currency went up...is a result of Russia annexation of crimea from Ukraine as a result of the sanction us placed on them it affected on all oil producing country as well

okiezman:


Guess you got hold of a nice phone gej is not the reason why oil price fell or currency went up...is a result of Russia annexation of crimea from Ukraine as a result of the sanction us placed on them it affected on all oil producing country as well

pls tell the olodo again

A Good manager knows how to manage his economy during Crisis like dis while a bad one is always dumbfounded and as such starts blaming d gods,usa,opec etc

talktimi:
pls tell the olodo again

Even you too wan comment...hahahahahaha

talktimi:
Where is the mockery in this article ?

Read again and ask me.

August21:
A Good manager knows how to manage his economy during Crisis like dis while a bad one is always dumbfounded and as such starts blaming d gods,usa,opec etc

hm

okiezman:

Many people are ignorant that they think myopically, the reason oil price and nigerian currency is falling is a way Usa used in punishing Russia but they think is nigeria's internal problem. Smh...check russias economy is about crumbling and their no1 source of income is through oil and gas...

You are the ignorant and myopic one. How much of the money made in the last four years have been invested in infrastructure? What has been your government response to the oil price challenge? Looking at 2015 budget, does it look like PDP govt is ready to make hard choices? This is Nigeria's internal problem. The article talks about an upsurge in foreign investment and we just came out of a period of high oil prices - why didn't the naira appreciate? Why do you think Sanusi cried out that money was missing? See the big picture and stop being myopic.

Firefire:


A roaring lion kills no game.

Let the negative media opposition called APC continue to throw all their missile out.


International disgrace is imminent come February 14th 2015 Insha Allah!

Did you really typed this yourself Adonbilivit

For your MinD, APC owns every media house abroad

chemali:


You are the ignorant and myopic one. How much of the money made in the last four years have been invested in infrastructure? What has been your government response to the oil price challenge? Looking at 2015 budget, does it look like PDP govt is ready to make hard choices? This is Nigeria's internal problem. The article talks about an upsurge in foreign investment and we just came out of a period of high oil prices - why didn't the naira appreciate? Why do you think Sanusi cried out that money was missing? See the big picture and stop being myopic.

August21:
A Good manager knows how to manage his economy during Crisis like dis while a bad one is always dumbfounded and as such starts blaming d gods,usa,opec etc

oduastates:
Nigerian economy?
Does Nigeria have an economy.
A pretend economy which is resistant that basic rules of economics.

APC dreamers

We have told you guys several times that until our internal and export economy is diversified the naira will always be subjected to crises like this.


The fastest economic route to achieve diversification are

1) Resource control

2) Fiscal federalism

3) Privatization


Which will see the States LGAs Corporations and Individuals aiding FG in economic development


So keep thinking that a Buhari whose Hausa Fulani people are anti all these listed above will do the magic

The fact is Buhari will continue with status quo and confuse himself and you guys who lack proper understanding of economic development with few projects

WhiteTechnology:







APC dreamers

We have told you guys several times that until our internal and export economy is diversified the naira will always be subjected to crises like this.


The fastest economic route to achieve diversification are

1) Resource control

2) Fiscal federalism

3) Privatization


Which will see the States LGAs Corporations and Individuals aiding FG in economic development


So keep thinking that a Buhari whose Hausa Fulani people are anti all these listed above will do the magic

The fact is Buhari will continue with status quo and confuse himself and you guys who lack proper understanding of economic development with few projects

From what you have written, we are in agreement that the status quo is detrimental to our growth, right? Now you say with certainty that a man whose actions in public life runs parallel to the status quo will continue with the status quo? It just doesn't add up. You struggle to find reasons on why not to elect him.These ideals you listed are contained in APC's manifesto and if you have an open mind, we can hold them to this for the next four years. If they don't perform, we elect another government. We cannot reward inefficiency and failure with another four years because of an irrational fear of APC.

chemali:


From what you have written, we are in agreement that the status quo is detrimental to our growth, right? Now you say with certainty that a man whose actions in public life runs parallel to the status quo will continue with the status quo? It just doesn't add up. You struggle to find reasons on why not to elect him.These ideals you listed are contained in APC's manifesto and if you have an open mind, we can hold them to this for the next four years. If they don't perform, we elect another government. We cannot reward inefficiency and failure with another four years because of an irrational fear of APC.

Face reality


Hausa Fulani people believe they can't survive in a decentralized and restructured Nigeria that is why they opposed change in the last CONFAB


Buhari is a diehard Hausa Fulani


You Yoruba people are deceiving yourselves that a typical Hausa Fulani will change over night


Buhari will build some projects fill it up with his supporters deceiving himself and his supporters that he has achieved much not knowing that overcentralization of Nigeria must be discarded if Nigeria must grow

WhiteTechnology:


Face reality


Hausa Fulani people believe they can't survive in a decentralized and restructured Nigeria that is why they opposed change in the last CONFAB


Buhari is a diehard Hausa Fulani


You Yoruba people are deceiving yourselves that a typical Hausa Fulani will change over night


Buhari will build some projects fill it up with his supporters deceiving himself and his supporters that he has achieved much not knowing that overcentralization of Nigeria must be discarded if Nigeria must grow

Your mind is made up. No point arguing.

chemali:


Your mind is made up. No point arguing.

Study history again


Just take a look at the last CONFAB

It is better to have a leader who takes decisions and damns d consequences than to have one who sits and watch events unfold before his eyes...Looking @ gmb u wil kno he is a Man of Action but just take a very gud look @ Gej?

CONFAB said it all, the Hausa are not ready for any change,
they want everything to remain the same, their slaves will not agree,
go and search the CONFAB info and find out what the Hausa's said they want,
they even boasted that they know how they will get it, they dont have any intention for any change,
they want things to be the same because it is favoring them,

chemali:


You are the ignorant and myopic one. How much of the money made in the last four years have been invested in infrastructure? What has been your government response to the oil price challenge? Looking at 2015 budget, does it look like PDP govt is ready to make hard choices? This is Nigeria's internal problem. The article talks about an upsurge in foreign investment and we just came out of a period of high oil prices - why didn't the naira appreciate? Why do you think Sanusi cried out that money was missing? See the big picture and stop being myopic.

U made zero sense

IT IS WELL..

Dem dey talk say money no dey.

One man say him cement nah N1,745

Who send am kwanu ?

1 usa dollar to N193.33 this morning...Flight to USA at N357.000.....This country is going backward....God help us

talktimi:
Where is the mockery in this article ?

Nah him I dey find..