Nigeria’s Economy Could Face Massive Downturns
The economy of Nigeria could face massive downturns in the near future and there’s hardly anything you or I can do about. The Nigerian minister of finance said Nigeria is not broke, but this makes me to feel she’s clueless or is trying to hide the truth from us like most politicians do.
Here’re some reasons why Nigeria’s economy could face massive downturns:
Oil prices are low and may go lower
Oil prices are low and may even go lower. Obviously, Nigeria would definitely be one of those worst hit, because its economy majorly depends on oil exports.
The Nigerian government was so short sighted and wanted quick money that they did not see the need to invest massively in other sectors of the economy.
Nigeria’s oil customers have reduced in oil demand
As if the low oil prices is not enough. Most of Nigeria’s oil customers have greatly reduced their oil demand. Just today, I read news that said Ghana would decrease its gas imports from Nigeria. USA, a major buyer of Nigeria’s oil has greatly reduced its demands too.
The massive investment in Shale oil in the USA has caused USA to decrease its oil imports from other countries.
The increase in oil production around the world is much higher than the worldwide demand for oil. According to economics, more output plus less demand equals to lower selling price.
The discovery of oil deposits in different countries has let them to decrease imports from other countries.
Some countries who do not belong to OPEC intentionally decrease oil prices to get more buyers.
So what does this mean to Nigeria’s economy? Potential disaster! Since the Nigerian government ignored developing, other sectors of the economy years ago, Nigeria might be affected by this development. I know other sectors of the Nigeria economy are doing quite well, but not at the needed pace.
The 2015 Nigeria Elections
Elections in Nigeria are characterised with a massive game play or deception by Nigerian politicians. They promise heaven and earth to gain votes. They spend a lot of money on their campaigns to pay touts, supporters and more.
“Every time Nigeria has an election inflation goes up ….” says Anna Rosenberg, associate practice leader for sub-Saharan Africa at Frontier Strategy Group in London.
The Nigerian government has spent a lot of money “trying to combat terrorism” in the country. This money would have been beneficial if used in other sectors for the benefit of the Nigerian economy.
Terrorism in Nigeria has led to the destruction of lives, livelihoods and properties and this has affected the country’s economy directly and indirectly.
Terrorism in Nigeria has led to migration of people from terror-prone areas in the north to different areas in the South, West and East. This has caused a strain on infrastructure and increased prices for basic goods in urban centres.
It is sad; terrorism may not stop even after a presidential winner is declared in 2015.
“Every time Nigeria has an election inflation goes up, but I think this time it’s a little bit worse because it’s married with the Boko Haram conflict,” says Anna Rosenberg, associate practice leader for sub-Saharan Africa at Frontier Strategy Group in London.
With the way things are going, it seems the danger of a massive economic downturn is imminent. Nigerians should prepare for the worst. Unemployment rates could rise, strikes could increase because of unpaid wages, tax rates could increase and more. However, It is better we only look towards the positive, and pray God helps us all.
Update: I was right. As of 13/04/2017, Nigeria is still facing an economic recession.