Nigeria: Averting Economic Collapse

opinion

By now it is clear that the Nigerian economy is headed for a massive hit, possibly even a collapse if everything continues on its current course. The overwhelming majority of Nigerian government revenue is still derived from oil exports. Since oil prices have fallen from 115 dollars a barrel to 50 dollars a barrel, economic indicators in Nigeria have taken a downward spiral. The naira has fallen to record low of around 230 to 1 dollar, and Nigerian capital markets have performed poorly in recent months.

The naira remains flat, hovering at around 200 to 1 dollar, with a devaluation seemingly imminent. With global capital markets currently reeling from the Greek default crisis in the Eurozone, oil commodity prices will continue to fall and sovereign borrowing costs will continue to rise rapidly especially for governments low-credit worthiness. It is now the responsibility of the new All Progressives Congress(APC)-led administration to arrest the current economic slide. The only way to do that is to increase government revenue, immediately.

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