Daily Times

ABUJA: Nigeria’s economy nosedived into a recession – official data showed on Wednesday – with oil production hammered by militant attacks on pipelines and foreign investment at a ‘record low’.

Output in the three months to the end of June was 2.1% with the oil sector reporting a double-digit decline following a wave of attacks by rebels in the oil-producing south. The slowdown was recorded across many sectors in a sign that Africa’s economic giant is wrestling with deeper structural issues than just the low price of crude.

During the oil boom, sales of oil at high prices had made Nigeria the biggest economy in Africa but when the price of crude crashed from more than $100 a barrel in June 2014 to below $50 today, Nigeria’s economy collapsed.

The crisis was compounded by President Muhammadu Buhari’s unorthodox decision to prop up the naira at 197-199 to the dollar causing foreign currency reserves to tank. The $647 million worth of capital imported into Nigeria in the second quarter represented a ‘fall of 76%’ compared to that of 2015.

International investors – wary of the controversial currency peg – avoided putting money into the country which led to a record decline in capital importation, reported Nigeria’s National Bureau of Statistics.

“This provisional figure would be the lowest level of capital imported into the economy on record and would also represent the largest year on year decrease,” the statistics agency said and added, “There was considerable uncertainty surrounding future exchange rate policy which may have deterred investors.”