Nigeria's economic crisis deepens

Nigeria's third-quarter gross domestic product (GDP) contracted by 2.4 percent year-on-year in real terms, the country's National Bureau of Statistics reported Monday.

Third-quarter growth in Africa's most populous nation was 0.13 percentage points weaker than in the previous three months, sending it officially into recession - defined as three quarterly contractions in a row.

Nigeria's economic plight sharpened in the July-to-September period, as rebels renewed their bombing of oil pipelines in the restive south, and businesses struggled to access foreign currency.

Major challenges ahead

"During the period under review, oil production averaged 1.63 million barrels per day," the statistics office said. That marked a 22-percent drop from the same period a year earlier, when Nigeria produced 2.17 million barrels per day.

"There seems to be no quick fix for uniting a heavily divided region, so for now we expect further attacks and subsequent volatility in Nigerian crude output," Energy Aspects analyst Rhidoy Rashid said in a statement.

Oil production accounts for around 70 percent of government revenue, and the bulk of the nation's export earnings.

President Muhammadu Buhari has been fighting an uphill battle to stabilize the national currency. But the government's efforts to prop up the naira has drained foreign currency reserves, necessitating the abandonment of the naira-dollar currency peg in June of this year.

Despite that measure, a dollar shortage still persists, with black market rates hovering around 440 naira to the greenback this month, compared with the official bank rate of 320 naira to the dollar.

Two years ago, in 2014, Nigeria overtook South Africa to become the continent's largest economy, measured by GDP. Yet the country faces severe infrastructure challenges, and it still suffers from chronic power shortages.

hg/nz (AFP, AP)