The prolonged decrease in oil prices has decidedly impacted the global economy more negatively than one thought initially. While consumption in advanced economies hasn’t benefited from an a priori favorable dynamic, the situation of Nigeria, Africa’s largest economy, embodied well the ambivalence of economic development in a globalized context.
If Nigeria is now on the brink of recession for the first time since 2004 that is also evidence this country progressively integrated itself into the global economy up to the point that it now undergoes its effects when one or several parameters change. Nigeria’s economy contracted by about 0.4% in Q1 2016, meaning that in case of contraction in the current quarter, Nigeria will officially be in economic recession, which is the most likely hypothesis according to local economists.
In addition to low oil prices, the government appeared unable to fix national refineries and to increase the value of the national currency naira (NGN) against the US dollar (USD) for the imports of gasoline of which the price set by the state jumped 69% recently. Nigeria Labor Congress (NLC)-led opposition to President Muhammadu Buhari demanded a competitive devaluation as large demonstrations were spreading across the country where the security situation remained precarious especially for oil pipelines in the Niger Delta region.