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(Wall Street Journal) The fall of crude prices to six-year lows in recent weeks has pummeled oil-producing countries from Venezuela to Iraq, threatening their ability to keep pumping petroleum and forcing governments to take painful measures to shore up national budgets.
Few countries have been as spun around as Nigeria, Africa’s top oil exporter. The nation of 182 million people depends on oil for 75% of its revenue, money it needs to roll out new infrastructure for a population that grows by 13,000 people a day. In April of last year, after a decade of 6 % growth underpinned by robust oil prices, the country became Africa’s biggest economy, with roughly the gross domestic product of Poland.
This year, the country recorded just 2.8% annualized growth in the third quarter, compared with 6.5% a year earlier. Half of the country’s states have been unable to pay their civil servants. To help pay them, the government has tried to scrounge up money by scrutinizing whether it is overpaying for airline tickets, office paper, conference-room sandwiches, and the like. Several senators have volunteered to cut their own salaries.
“Now we’re going to have to look inward. We’re going to have to be far more disciplined,” said Finance Minister Kemi Adeosun in an interview in Nigeria’s capital Abuja last week.
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