Photo by Oshomah Abubakar
Between April and June of last year, a recession hit Nigeria. This was partly caused by low oil prices, which Nigeria depends on for importing to other countries.
BBC reports, “The price of oil has fallen from highs of about $112 a barrel in 2014 to below $50 at the moment.”
A recession doesn’t happen until there has been two consecutive quarters of drops in the economy.
CNN explains, “Nigeria’s second quarter GDP fell by more than 2% compared to last year, after slipping by 0.4% in the first quarter. Two consecutive quarters of decline mean Nigeria is now officially in recession.”
The value of the Nigerian currency dropped dramatically in addition to the price of oil dropping.
Quartz states, “Not only were Nigeria’s economic troubles stem from a faltering currency and plunging oil revenues. As global oil prices tumbled, the Nigerian government imposed a fixed exchange rate to check the outflow of funds. But when the naira became ever more overvalued, investors took flight. More than anything, the policy ended up exacerbating the difference between the official and black-market exchange rate, leading to calls for a currency devaluation. oil prices going down, but also the value of the currency went down.
A rebel attack on the main commodity made oil output (and thus the main source of income) fall. In addition, chronic power outages hit manufacturing and retail.
CNN reports, “Nigeria isn’t only hurting from low prices. Its output also fell sharply because of a series of rebel attacks on infrastructure. Other sectors suffered too, with manufacturing and retail hit by chronic power outages.”
Many critics of the government say they could have prevented the recession from happening.
Per BBC, “But critics say government policies made a bad situation even worse. The decision to delay devaluing Nigeria’s currency meant many businesses struggled to get foreign currency to pay for imports, which had a cooling effect on the entire economy.”
Even though at the time, the economy was dropping, the government was optimistic that it would start growing again and get up to 4% by the end of the year.
Quartz explains, “The IMF, though, has aggressively slashed its forecasts for Nigeria in recent months; at the start of the year, it expected the economy to grow by 4% this year.”
Mission Africa provides relief to those in Nigeria who are hurting and poor in their country.
Mission Africa reports, “We work to alleviate the suffering of street children and orphans in Nigeria, and also run an outreach to prostitutes and vulnerable women. Our missionaries are involved in a ground–breaking peace and reconciliation programme in the inner city, and we organise a project to help over 200 village children with nutrition, school fees and spiritual support.”
Please pray the people of Nigeria to be able to find Christ’s hope through Mission Africa.
BBC: Nigerian economy slips into recession
CNN: Blame oil: Nigeria slumps into recession, Norway stalls
Quartz: Nigeria, Africa’s largest economy, has slipped into recession for the first time in decades