Subdued growth in the economy for oil-rich Nigeria could be undermined if<\/p>\n
the country’s production levels don’t recover, Moody’s Investors Service
\nsaid.<\/p>\n
The Nigerian Bureau of Statistics said last month the economy had slipped
\ninto recession. A member of the Organization of Petroleum Exporting
\nCountries, the oil-sector contribution to total real gross domestic
\nproduct for Nigeria declined by 1.45 percent year-on-year.
\nPublished from Dubai, Moody’s said in a report the government of Abuja
\nshould be able to withstand some pressures, but rising inflation and other
\ngrowth challenges remain.<\/p>\n
Between 2010-2014, inflation rate was between 6%-8% while unemployment
\nrate was 21%. Under President Buhari’s one year, inflation rose to 17.1%
\nwith a 75% unemployment rate.<\/p>\n
“The government of Nigeria continues to face low oil prices, volatile oil
\nproduction, a spike in inflation that has eroded purchasing power, foreign
\nexchange scarcity and an economy that has entered technical recession,”
\nthe report read. “Moody’s projects stagnation in real GDP in 2016 and only
\nsubdued growth at 2.5 percent in 2017.”<\/p>\n
The Nigerian government said oil production during the second quarter
\ndeclined almost 20 percent from the previous period. Among the region’s
\nlargest economies, Nigerian crude oil production is at a 30-year low.<\/p>\n
Burdened already by revenue lost to lower crude oil prices, Nigeria
\nproduction is the target of a campaign from militant Niger Delta Avengers,
\none of the more active groups of its kind in the region. In an open letter
\nto President Muhammadu Buhari, the movement said it ended its hostilities
\nand was now calling for a restructuring of the country. It says the
\nadministration is sidelining the interests of the people in favor of oil
\ninterest in the Niger Delta.<\/p>\n
On the financial front, Moody’s said a government move to devalue the
\ncurrency could help offset some of the loss from the oil sector, but could
\nalso push the rate of inflation toward 20 percent by the end of the year.<\/p>\n
“We expect that Nigeria will contain pressures on its public finances in
\nthe short term,” Aurelien Mali, a credit officer at Moody’s said in a
\nstatement.<\/p>\n
“However, there is greater doubt about the severity of the impact of these
\nchallenges, particularly on government liquidity and economic growth, over
\nthe medium term.”<\/p>\n","protected":false},"excerpt":{"rendered":"
Subdued growth in the economy for oil-rich Nigeria could be undermined if the country’s production levels don’t recover, Moody’s Investors Service said. The Nigerian Bureau of Statistics said last month…<\/p>\n","protected":false},"author":1,"featured_media":52796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-52795","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exclusive"],"yoast_head":"\n