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Oil, naira drag on Nigeria

Wednesday, February 18, 2015 - 02:19

Nigeria trims its 2015 growth forecast, from an estimated 6.23 percent down to 5.54 percent, amid uncertainty over oil and the continued slide in its currency, the naira. Hayley Platt reports.

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Nigeria's economy had been motoring. But weaker oil prices and a slide in the currency has forced the government to trim expenditure. Economic growth for 2014 is now seen at 5.5 percent down from a previous estimate of 6.2 percent. Nigeria is Africa's top economy and its biggest oil exporter. The industry accounts for 95 percent of its foreign exchange earnings and it provides 80 percent of the government's revenue. Yemi Kale is from the National Bureau of Statistics. (SOUNDBITE) (English) YEMI KALE, CHIEF EXECUTIVE OFFICER, NATIONAL BUREAU OF STATISTICS SAYING: "On the one hand you have less revenue coming directly from crude. On the other hand you have a lot less expenditure on buying imported PMS which means that again it depends on which of those two factors dominate. That would determine whether the balance is positive or negative." The country's currency is certainly negative. Last week the naira fell below a key level of 200 to the dollar. And the central bank has been burning its way through $110 million dollars a day of foreign exchange reserves. Central bank governor Godwin Emefiele. (SOUNDBITE) (English) GODWIN EMEFIELE, GOVERNOR, CENTRAL BANK OF NIGERIA SAYING: "We have put a lot of models in place to look after the various different scenarios. We will look at what action needs to be taken as we attain various levels in the price of crude." The revised growth figure comes as President Goodluck Jonathan faces an election. Voting has been delayed until the end of March for security reasons - as the militant group Boko Haram steps up attacks in the north of the country. Some fear the delay could further weaken the economy. JP Morgan's Kerry Craig. (SOUNDBITE) KERRY CRAIG, GLOBAL MARKET STRATEGIST, JP MORGAN, SAYING: "The prospect of the election being delayed and what the leadership will do there in terms of trying to reinvigorate the economy away from oil sectors towards non oil sectors production in terms of non oil growth and how much that will play out, that kind of change takes time. It takes a long time for a shift in economies to play out that way." The number of rich Nigerians is continuing to grow. But so too is the gap between rich and poor. Poverty remains a problem. Almost 100 million people live on less than $1 a day.

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Oil, naira drag on Nigeria

Wednesday, February 18, 2015 - 02:19