FT: Dollar shortage threatens Nigeria’s economy

According to Financial Times, the shortage of cash dollars has led to a crisis in the Nigerian economy, which cannot cope with it, even despite the rise in world oil prices. Due to the restrictions imposed by the country’s authorities on foreign exchange transactions to stimulate the use of the national currency naira, the country has been experiencing acute deficit in dollars. The government has limited purchases of dollars and devalued the naira several times to boost revenue from declining oil exports.

Since the beginning of the year, the gold and foreign exchange reserves of Nigeria, which ranks tenth in the world in terms of oil reserves, have decreased by 5%, to $38 billion. on the black market – 700 naira. As the FT notes, large-scale corruption and ineffective economic measures have led to the fact that oil-rich Nigeria cannot increase the export of this commodity – if the OPEC quota for Nigeria is 1.8 million barrels per day, then the country exports only 1.1 million barrels per day .

The shortage of dollars in Nigeria hits local companies that do business with foreign partners, local investors and citizens whose children study in foreign educational institutions most of all – they all find it very difficult to find a currency to pay bills. It is reported that the Emirates airline Emirates has threatened to suspend its flights to the Nigerian capital Lagos after this airline was able to receive for its operations in the country only $265 million instead of the required $464 million, which the Central Bank of Nigeria allocated to it by special decree.

In the summer, MSCI compilers declaredthat, due to ongoing currency problems, they may exclude Nigeria from the frontier markets category (developing countries with high potential) of their investment index, where it is located along with countries such as Bahrain, Croatia, Kazakhstan, Estonia, Oman, Morocco, etc. .

Evgeniy Khvostik