FinanceMaking the news

How oil-rich Nigeria failed to profit from an oil boom

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A surge in oil prices can do astonishing things. In Saudi Arabia a futuristic city is planned to rise from the desert, replete with an artificial moon made of drones. Angola’s long-beleaguered currency has suddenly become one of the strongest performers against the greenback. In the Middle East and Central Asia oil exporters are cock-a-hoop, since they may pocket $320bn more in oil revenues this year than previously forecast. Yet there is a conspicuous absentee from this merry petro-party. The net effect of the high oil price for the country that is usually Africa’s biggest oil producer is “nil or negative”, laments Zainab Ahmed, Nigeria’s minister of finance.

Africa’s most populous country, around 220m-strong, desperately needs the money an oil boom could bring. Some 40% of its people live on less than the equivalent of $1.90 a day. The government is struggling to service its debts. Social services are dire. The woeful economy has contributed to the violence that afflicts much of the country. In the first half of this year, nearly 6,000 people were killed by jihadists, kidnappers, bandits or the army.

 

Source: Economist.com

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