Nigeria's economy officially in recession
(Nigeria) Nigeria's economy nosedived into a recession, official data released on Wednesday, showed, with oil production hammered by militant attacks on pipelines and foreign investment at a "record" low.
Output in the three months to the end of June was -2.1
percent with the oil sector reporting a double-digit decline following a wave
of attacks by militants in the oil-producing Niger Delta region, according to AFP.
The slowdown was recorded across many sectors in a sign that
Africa's economic giant is wrestling with deeper structural issues than just
the low price of crude.
During the oil boom, sales of oil at high prices had made
Nigeria the biggest economy in Africa.
But when the price of crude crashed from more than $100 a
barrel in June 2014 to below $50 today, Nigeria's economy collapsed.
The crisis was compounded by President Muhammadu Buhari's
unorthodox decision to prop up the naira at 197-199 to the dollar causing foreign
currency reserves to tank.
International investors, wary of the controversial currency
peg, avoided putting money into the country, leading to a "record"
decline in capital importation, reported Nigeria's National Bureau of
Statistics.
The $647 million worth of capital imported into Nigeria in
the second quarter represented a "fall of 76 percent" compared to
2015.
"This provisional figure would be the lowest level of
capital imported into the economy on record, and would also represent the largest
year on year decrease," said the statistics agency.
"There was considerable uncertainty surrounding future
exchange rate policy which may have deterred investors," it added.
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