Nigeria’s economy shrinks in 2016 for first time in 25 years


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.