Nigeria's economy contracts - CNBC Africa

Nigeria's economy contracts

Western Africa

by Reuters 0

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Nigeria's gross domestic product contracted by 0.36 percent in the first quarter of 2016 after growing 3.96 percent in the same period last year, the head of the Nigerian Bureau of Statistics (NBS) said on Friday on his Twitter feed.

Africa's biggest economy is going through its worst economic crisis in decades, caused by the sharp fall in oil prices. Nigeria relies on crude oil sales for around 70 percent of national income and low prices have cut government revenues.

The economy's contraction in the first quarter of 2016 compares with growth of 2.11 percent in the fourth quarter of last year. Annual inflation quickened to a near six-year high of 13.7 percent in April.

Currency curbs were introduced by the central bank last year in an attempt to conserve dwindling foreign exchange reserves.

President Muhammadu Buhari has rejected calls by the International Monetary Fund for a more flexible exchange rate. The naira currency is officially pegged at between 197 and 198 per dollar but has fallen 40 percent below that level on the parallel market.

The central bank's monetary policy committee will meet on Monday and Tuesday. Speculation that the naira may soon be devalued has grown since the vice president said last week that currency policies needed to change to encourage investment. (Reporting by Alexis Akwagyiram; Editing by Catherine Evans)

 

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