Political uncertainty and low oil price, a threat to Nigeria’s strong economic history- Control Risks

Political uncertainty and low oil price, a threat to Nigeria’s strong economic history- Control Risks

By Justine Wangui

Email: justinewangui@gmail.com

Lagos, Nigeria - The Risk Map 2015 report, an established authoritative guide and key reference point for policymakers and business leaders seeking to plot global trends over the coming year published by  Control Risks, the global business risk consultancy has named political uncertainty and low oil prices as key hazards to Nigeria’s success history. The report was introduced yesterday, March 12, 2015 by Tom Griffin, Managing Director West Africa, Control Risks.  

Nigeria’s long unsuccessful battle with the infamous Islamist militant group Boko Haram over the past period has severely depleted its economy leaving some parts of the country in abject poverty.  The general elections that were to be conducted this year faced postponement due to the unrest in the country. 

“The postponement of Nigeria’s elections has unnerved some investors and made others delay their final investment decisions. The economic impact of that has been shown by the drop in the naira. The genuinely competitive elections are a critical juncture on Nigeria’s path towards becoming a mature democracy, but closely contested polls are uncharted territory for the country’s political system. Nonetheless, Nigeria has an impressive capacity for weathering impending crises and we believe that the upcoming elections will be no different,” said Tom Griffin.

As per the most significant underlying trends in global risk and security, and the most crucial markets in 2015 highlighted in the Risk Map, diversification of the economy remains crucial to improve the sustainability of West Africa’s economic growth.  The escalating political uproar following the postponement of the presidential poll to March threatens to depress investor confidence. The deepening political divisions between Nigeria’s regions over the presidential poll and the absence of a clear leader increase the risk of a contested outcome and a turbulent outcome.  

The drop in oil revenue will test Nigeria’s economy over the next year to show the extent to which the fast-growing non-oil sectors have become truly independent from the oil economy. In addition, the incoming administration in May will have to address a cash-flow crisis, the threat from Boko Haram while maintaining stability in the oil-producing Niger delta and reducing social unrest.

Tom Griffin pointed out Africa’s  constrains demonstrated by the current year 2015, among them being excessive reliance on commodities such as oil, bottlenecks in the economy, security challenges from criminal and militant groups and the need to improve governance.

 Source: (https://www.controlrisks.com)