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