For Muhammadu Buhari, winning Nigeria’s presidential election in May, in which he became the first ever opposition candidate to defeat a sitting president, proved to be easier than expected. His next task – reforming the country’s oil dependent economy – is a much tougher prospect. In the second quarter of 2015, the country’s growth domestic product growth rate dipped to 2.35%, down from 6.54% a year earlier, largely as a result of slumping oil prices. The outlook for the rest of the year appears equally bleak. Investment bank Renaissance Capital has lowered its GDP growth forecast for Nigeria to just 2.8% in 2015.
Meanwhile, the dip in the value of the naira has edged up inflation in the country, which hit 9.3% in August, exceeding the central bank’s target range of 6% to 9%. Projections from Standard Chartered indicate that this number could hit 9.4% by the end of the year, before increasing to 9.7% in 2016. This has occurred as interest rates have remained set at a record high of 13% since November 2014, with the associated drag on private sector growth that this implies.
