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Nigerian Economy Drops To Recession Following a Consecutive Shrink In GDP - Alldamoney

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Nigerian Economy Drops To Recession Following a Consecutive Shrink In GDP

Nigeria, Africa’s largest economy, until recently has officially entered a recession following two consecutive quarters of contraction in the nation.
Based on the country’s National Bureau of Statistics (NBS)  data released on Wednesday.
GDP shrank by 2.06% in the second quarter of 2016, following a 0.36% shrinking in the first quarter of the year, those two consecutive quarters of economic shrinkage mean that the country is now in its first recession in more than 20 years. A recession is defined as a situation where a country sees two consecutive quarters of declining growth.

The cause of the slump in the economy has been largely the continual decline in crude oil price over the past two and a half years. Nigeria is the largest producer of the commodity on the continent and relies heavily on it thus producing roughly 2.4 million barrels per day. Given that oil’s price has slumped from more than $100 per barrel in 2014 to roughly $48 now, it is perhaps unsurprising that the country has struggled for economic growth.

The Naira is at all time low after the CBN let it float 

Series of disruptions in the oil-rich Niger Delta area largely caused by a militant group calling themselves the Niger Delta Avengers did contribute to the country's oil industry’s problems. Most notably, the Chevron offshore facility in May and the underwater Forcados export pipeline operated by Shell in late March.
Disruptions to production caused by these attacks have wreaked chaos to the already stricken industry.
Outside the oil industry, the figures show the fall in the Nigerian currency, the naira, has hurt the economy. It was allowed to float freely in June to help kick-start the economy, but critics argued it should have been done earlier
But the government says there has been strong growth in other sectors. Most especially the agricultural and solid minerals sectors the areas in which the federal government has placed particular priority

Nigeria lost the position of Africa’s  biggest economy  to South Africa some few weeks ago amid battling an 11-year high 17.1%  inflation rate since July.

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