Arab Today, arab today nigeria faces currency woes in wake of oil price plunge
Last Updated : GMT 07:47:21
Arab Today, arab today
Arab Today, arab today

Nigeria faces currency woes in wake of oil price plunge

Arab Today, arab today

Arab Today, arab today Nigeria faces currency woes in wake of oil price plunge

in Nigeria many are feeling the pain as Africa's biggest oil producer struggles
Lagos - AFP

Onele Vincent and his colleagues are fed up with the rising cost of living. So they decided to do something about it and led a noisy protest at a top Lagos hotel where they work.
"Things are more expensive, rent is high, food is high," Vincent told AFP last week in the lobby of the Southern Sun hotel, a favourite of the monied elite, politicians and expatriates.

"Everything has increased and yet the staff salary has remained the same."

Vincent and the other hotel workers are far from alone voices in Nigeria, where many are feeling the pain as Africa's biggest oil producer struggles to adapt to the record lows of global oil prices and its naira currency is under devaluation pressure.

Daily newspaper headlines warn of "Hard times ahead", while many billboards in the commercial hub of Lagos stand stark white, just blank signs, an indication that companies are trimming costs.

Even high fliers are taking a hit. Importers of French wine complain that demand has dried up. Luxury car dealers and real estate agents say business has dwindled.

Africa's leading economy is projected to have grown by 3.0 percent in 2015, its slowest pace in over a decade, according to an International Monetary Fund report in January.

Unlike Norway, which invested hundreds of billions of dollars of its oil money into stocks, bonds and real estate, Nigeria spent its riches when times were good.
Now that crude prices have slumped more than two-thirds since $100 per barrel in mid-2014, Nigeria is exposed.

Dollar reserves currently stand at a low of $28 billion -- $20 billion less than in April 2013. There is only enough for five months of imports for a country heavily dependent on foreign goods.

- 'Lack of direction' -

While the huge drop in oil prices is a major headache for Nigeria, analysts say it is the government's response that is the biggest cause for concern.

The central bank governor, Godwin Emefiele, on Tuesday dismissed calls to devalue the naira in his monetary policy committee statement.

Instead he chose to continue propping up the currency at 197-199 naira to the dollar and maintain foreign-exchange restrictions.

As a result, the naira on the black market is hovering around a record low of 305, fuelling complaints from domestic and foreign businesses who can't access dollars needed for imports.
With little domestic manufacturing and years of under-investment, mismanagement and corruption in the oil sector, Nigeria depends on imports for almost everything, from milk and machinery to petroleum products.

Jittery investors, fearing the inevitable devaluation of the naira, have held off doing business in the country until there is a clearer monetary policy.

"The situation right now is causing a lot of anxiety and uncertainty because no one knows how to plan for it," said Anna Rosenburg, emerging markets analyst at Frontier Strategy Group.

"Everyone is complaining about the lack of direction from the government."

- Investment limbo -

Attempts to shore up the naira are designed to protect the nation's dollar reserves.

But the tight forex controls have led to accusations growth is being strangled in Africa's most populous country.

"At this stage, a weaker naira is less important for fostering the resumption of needed international investment flows than the lifting of the foreign exchange restriction," JF Ruhashyankiko, a Goldman Sachs economist, said in an investor note.

Now Nigeria is in limbo, badly needing foreign investment but unable to get any.

"If you're not attracting those inflows and you're not generating a surplus from the export of oil, then it's going to be more difficult to sustain foreign exchange reserves where they are," added Razia Khan, an economist at Standard Chartered Bank.

"That could impact on its perceived credit worthiness, which isn't a good thing when Nigeria is thinking of borrowing externally to fund some of its more ambitious infrastructure programmes."

President Muhammadu Buhari last month announced a record six trillion naira ($30 billion) budget to avoid a recession, planning to pour money into massive road and railway projects.

But the budget is based on an oil price of $38 per barrel, above the current market price of around $33, and relies heavily on borrowed money.

After Buhari remarked in December that he would consider devaluing the naira, some investors took it as a sign the currency situation would be resolved early in the new year.

Yet on Thursday Buhari put those hopes on the back burner, saying on a visit to Kenya he will not have the naira "killed" and is "optimistic" his policies will soon stabilise the economy.
Source: AFP

arabstoday
arabstoday

GMT 10:22 2017 Sunday ,15 October

ADNOC strengthens energy partnership

GMT 17:02 2017 Saturday ,14 October

IMF, Spain warn on economic growth

GMT 05:05 2017 Saturday ,14 October

Saudi Aramco considering ‘range of options’

GMT 07:46 2017 Friday ,13 October

Canada still optimistic for new NAFTA

GMT 19:45 2017 Thursday ,12 October

Economic reform results 'exceed expectations'

GMT 15:34 2017 Thursday ,12 October

IMF: 'Fluid' situation for banks

GMT 22:53 2017 Wednesday ,11 October

NBE ranked 1st among African banks

GMT 21:35 2017 Wednesday ,11 October

The New Administrative Capital...Facts
Arab Today, arab today
Arab Today, arab today

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today nigeria faces currency woes in wake of oil price plunge Arab Today, arab today nigeria faces currency woes in wake of oil price plunge

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today nigeria faces currency woes in wake of oil price plunge Arab Today, arab today nigeria faces currency woes in wake of oil price plunge

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today EasyJet, Lufthansa among seven to bid

GMT 06:49 2017 Tuesday ,17 October

EasyJet, Lufthansa among seven to bid
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Israeli court convicts Palestinians of 2016

GMT 04:39 2017 Tuesday ,17 October

Israeli court convicts Palestinians of 2016
Arab Today, arab today Iran's Facebook shuts down

GMT 23:50 2017 Monday ,16 October

Iran's Facebook shuts down
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today British actress becomes fifth woman

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman
Arab Today, arab today Three killed, 360,000 without power

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Anoshka happy for reactions to her talk show

GMT 12:33 2017 Friday ,13 October

Anoshka happy for reactions to her talk show
Arab Today, arab today India to close colonial-era military farms

GMT 18:49 2017 Monday ,16 October

India to close colonial-era military farms

GMT 10:55 2017 Thursday ,12 October

Safaa Sultan happy for “Love School”

GMT 10:37 2017 Thursday ,12 October

Cara Delevingne accuses Weinstein

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 12:02 2017 Saturday ,14 October

Conservation cutbacks put Brazil's

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 12:25 2017 Saturday ,14 October

Squeeze on UK health gives advanced

GMT 07:02 2017 Sunday ,15 October

German minister sparks uproar

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 03:59 2017 Sunday ,15 October

US mobile carriers Sprint, T-Mobile to merge

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday