Good news for one of Africa’s biggest economies: Nigeria is seeing growth.
Although at only 0.8%, it signals an end to the country’s recession which was caused by a fall in global oil prices last year.
However, the IMF believes the recovery is still fragile and more importantly, it will not make any real impact on the country’s twin problems of poverty and high unemployment.
Although the government is making reforms, there’s calls for the nation to diversify, particularly in growing its agricultural output. This is because the country’s economy is primarily focused around oil production, which means its economic fortunes are intrinsically linked to a market where price fluctuations are common.
Nigeria is also having to use 40% of its revenue to make interest payments on debt owed to foreign investors and international bodies. This means it can’t balance its budget without asking the World Bank for more cash, leaving the country in a debt cycle.
It’s worth noting that at 15%, inflation is very high; if this can be lowered through a tightening of monetary policy, it may increase the value of the Nigerian naira, and give a degree of confidence to creditors that the country is on a long term path to growth.