Nigeria's economy contracted in the third quarter as
businesses struggled to access foreign exchange and rebels continued to bomb
oil pipelines in the restive south, official data showed.
"The nation's gross domestic product contracted by
-2.24 percent year-on-year," the country's National Bureau of Statistics
said in a report.
The Nigerian economy is reeling and bruised following the
crash in global oil prices from over $100 a barrel in 2014 to around half that
today, according to AFP.
A contraction appeared inevitable when militants renewed
attacks on the country's oil infrastructure, strangling production that
accounts for around 70 percent of government revenue and the bulk of Nigeria's
export earnings.
The relentless sabotage has put the Nigerian government
under pressure as economists increasingly question whether President Muhammadu
Buhari can pull the country out of recession.
"During the period under review, oil production
averaged at 1.63 million barrels per day (bpd)," the statistics agency
said.
That is a 22-percent drop from the same period last year,
when Nigeria was producing 2.17 million bpd.
Manufacturing also took a big hit, shrinking by 2.9 percent
in the wake of a devalued naira and currency controls that have curbed trade.
"This is partly due to the continued fall in the
exchange rate, which makes imported inputs more expensive, thereby increasing
business costs," the statistics agency said.
"This is greatly a result of the continued fall in
naira to dollar rate which translates to much higher cost of business
operations."
In early 2016, Buhari had vowed not to ‘kill the naira’ by
letting it fall in value, in opposition to depreciations by fellow major oil
exporters Angola and Russia.
His government tried to prop up the naira for months, but
that drained foreign currency reserves and it eventually abandoned the currency
peg in June.
A dollar shortage persists, with black market rates hovering
around 440 naira to the dollar this month compared to the official bank rate of
approximately 320 naira to the dollar.
The economic troubles look to last, with peace talks between
the Nigerian government and oil rebels falling apart this month — the Niger
Delta Avengers claimed they bombed three pipelines last week — and foreign
investors steering clear until they see a more coherent currency policy)
