The National Bureau of Statistics said on Tuesday that Nigeria’s economy contracted 1.5 percent in 2016 due to lower oil revenues and a shortage of hard currency, its first annual contraction in quarter of a century, Reuters reports.
Africa’s largest economy slid into recession in the second quarter of 2016 as a slump in crude prices hammered the OPEC member’s public finances and battered the naira currency. Crude sales make up two-thirds of government revenue.
“This contraction reflects a difficult year for Nigeria, which included weaker inflation-induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a concomitantly weaker currency,” the statistics office said in a report.
The International Monetary Fund had predicted Nigeria’s economy would shrink 1.8 percent in 2016. A Reuters poll forecast a 1.2 percent contraction.. Fourth-quarter national output shrunk by 1.3 percent, it said. However, non-oil sector production fell by only 0.33 percent during the three months to end-December.