Nigeria’s Finance Minister Kemi Adeosun recently told a senate briefing that the economy is in a recession. Adeosun was speaking at a senate plenary session Thursday on measures the government is taking to assuage the effects of the recent fall in oil revenues and its impact on the Nigerian economy.
Adeosun said a country can be considered to be going through a recession if it experiences two consecutive quarters of negative growth. In her words, Adeosun admitted that “things are tough” but was quick to add that “we are not ignorant.” She insisted that the recession would be a relatively short one because the government was working very hard to get things under control.
Adeosun said, “We are not the only country in recession; many countries are doing far worse than us. But for Nigeria, what Nigerians want to know is ‘how’s that going to affect me,’ and I want to assure everybody that what we are doing is going to work and it’s going to turn this economy around.”
Nigeria is one of several petroleum producing countries around the world that have seen their economies suffer from the slump in crude oil prices. The export of petroleum products accounts for about 90 percent of Nigeria’s total export revenue. Crude oil prices have crashed from its 2014 peak of about $122 per barrel and now hover at less than $50 per barrel.
In addition to the fall in oil prices, Nigeria has had to deal with an upsurge in militant activities in the nation’s oil rich Niger Delta region. The activities of the militants insisting on greater autonomy for the region have nearly crippled crude oil production and have consequently set back the country’s expected export earnings.
The International Monetary Fund also said that the Nigerian economy was projected to contract in 2016. It cut the country’s GDP forecast from a previous 2.3 percent in April to 1.8 percent, the lowest in 29 years. Inflation has also risen and the country’s National Bureau of Statistics latest Consumer Price Index has risen by 16.5 percent, the highest in 11 years. Nigeria’s official currency, the Naira, also weakened to an all-time low, with it now exchanging for N330.50 against the dollar.