Nigeria is going through biting recession on the way to a bigger recession accompanied by galloping inflation and looming restlessness among the citizenry. As one of the panacea, the federal government will soon commence the selling of $1 billion in Eurobonds to finance a budget deficit, Nigerian officials said on Friday . . .
According to some partisan Nigerian economic and financial “experts” including disgruntled politicians who lost power, the recession was accompanied by the emergence of the erstwhile opposition All Progressives Congress ( APC) which won the presidential election and formed a government. The economic downturn has gripped the major African oil producer and a member of the Organization of Petroleum Exporting Countries (OPEC) amid foreign currency shortages and double-digit inflation.
Reports indicate that the Eurobond sale is part of the Nigerian federal government’s plans to borrow $5 billion from the World Bank and some other international financial institutions abroad for capital infrastructure projects to boost Africa’s largest economy – after South Africa.
In line with this intervention to stem the recessive economy some $3 billion has been secured in low-cost, long-term loans from the World Bank and the African Development Bank (ADB), the government (through the finance minister, Kemi Adeosun) announced with the rest of the loans expected in bilateral loans from China and Japan.
Photos L-R: Nigeria’s President Muhammadu Buhari & falling oil prices
Nigeria is suffering from low prices of oil hit by the incessant fall by international oil (dollar) prices, which provides more than 70% of federal and state governments’ revenues. Prior to this impending intervention, Nigeria’s President Muhammadu Buhari said he will seek emergency economic powers to address the economic and financial crisis – with the accompanied opposition and criticisms from the main opposition Peoples Democratic Party (PDP) lawmakers in Abuja.
MBR conducted a research through a fact-finding process – devoid of Nigerian peculiar politics and/or politicizations which is all pervasive in the most populous black country in the world. The process revealed the real causes behind the Nigerian recession. It can be traced to 10 reasons , as follows:
- Falling international oil prices
- Corruption and profligacy of previous administrations, especially the Jonathan administration
- Bombing of oil pipelines in the Niger Delta
- Near total reliance on the oil sector
- Near neglect of other sectors, especially the agricultural sector
- Near total absence of the manufacturing sector
- Corrupt and inept bureaucracy and embezzlement of public funds
- Military spending to fight the Islamic Boko Haram in the northeast
- Embezzlement of defence funds
- Lack of sound and predictable economic, financial and fiscal policies