0 Replies Latest reply: Dec 2, 2014 10:24 AM by bodunrin RSS

    Nigeria Economy at glance. Dec 2014

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      The recent devaluation of Naira from  N155 to N168 to one US dollar and increase in interest rate from 12 to 13 per cent, and the increase of private sector Cash Reserve Ratio (CRR) from 15 to 20 per cent by the Central Bank of Nigeria was a claim to discourage frivolous demand for Dollars by Nigerians. Dollar has increased to over 200 naira per Dollar. Pounds is now climbing to 300 naira. The price of crude oil has fallen drastically, despite the decision of OPEC to cut output in order to save price, Saudi has vowed to flood the market, since it already had huge amount of foreign reserves and seems to be targeting the incentive of the United States producing its costly shale Oil. Why will Saudi help the USA sustain price? What does all these means for Nigeria? The country is at a dilemma, its foreign reserve is dwindling, its currency is weakening on a daily basis due to massive over-dependence on importations for December sales by stores and businesses. A fall in price of oil has a negative effect on its budget and foreign reserves. A significant increase in the price of crude oil will be an incentive for the USA (its main buyer) to look inward by refining its own shale oil. This means low patronage for Nigeria Oil. All these is happening when the country is faced with insurgence, massive corruption and preparing for Elections at the same time. This is with the pockets of protests, ethnic and religious rivalry that has been the hallmark of the country since independence. Nigeria needs a restructuring, it needs objective regional leaders that can distant themselves from religious and ethnic sentiments. The country need to stop its overdependence on crude oil and save the country from External shocks. It needs to encourage more local productions, not only in the Agricultural sector but also in the manufacturing sector. There is need for massive orientation and training of public office holders and aspiring leaders on best practices on how to successfully managed and steer the affairs of a country. With the size of its population, massive resources and land mass, Nigeria has the potential of being a regional leader in Africa and a fall will have a negative impact on Africa.naira.jpg