Men guide a boat carrying drums filled with refined stolen oil through a creek near the river Nun in Nigeria’s oil state of Bayelsa in December 2012. Reuters/Akintunde Akinleye
Boko Haram isn’t the only battle Nigeria is fighting. Africa’s biggest economy is not only on the front lines of the militant group, but is also struggling under record-low fuel prices, high inflation and tumbling economic growth.
Nigeria’s economic growth slowed to 4 percent in the first quarter of this year, down from 5.5 percent the year earlier, according to its National Bureau of Statistics. And economists say it’s probably going to get worse for the country’s incoming president.
“All in all, the poor performance underlines the challenge facing President-elect Muhammadu Buhari,” wrote Capital Economics’ John Ashbourne in a Thursday note.
Though he may be celebrating his recent victory over incumbent Goodluck Jonathan, Buhari will inherit an economy in desperate need of attention. Roughly 75 percent of Nigeria’s government revenue comes from crude oil sales. But global prices have fallen more than 50 percent over the past year, which has left a massive hole in the state budget.
Nigeria’s oil production has slowed to 2.2 million barrels per day. Even though the country is the largest oil producer in Africa, a lack of infrastructure means it is heavily reliant on imports, as CNBC reported.
Despite the record-low oil price and planned 90 percent cut to fuel subsidies, Nigerians around the country continually find themselves lining up for hours to gas up their cars thanks to fuel shortages around the country.
The one positive note has been the agriculture sector, which makes up about 18 percent of Nigeria’s economy. Though it was hit hard by instability in the northeast last year, this year it appears to be bouncing back — increasing by 7.4 percent compared with 5.9 percent in 2014.
But it’s not enough to change the general economic outlook for Nigeria in 2015, which isn’t bright.
“Given the combination of slow growth and relative exchange rate stability, it looks likely that the Central Bank of Nigeria will hold off tightening monetary policy until later this year,” Ashbourne wrote