The storm may soon be over for Nigeria as the World Bank expects the rebound in the price of oil will pull the country out of its worst recession in 25 years. According to the bank’s latest forecasts, it expects Africa’s largest economy to grow by 1 percent in 2017 after contracting 1.70 percent last year. This will bring immense relief to a country cash strapped economy.
The central bank in bid to curb inflation and stop the external reserve from continued bleeding pegged the naira at N197-N199 for 15 months before adopting a flexible exchange rate regime in June last year that saw the currency lose 60 percent of its value against the US dollars.
Experts are of the view that the rise in oil price alone is not enough to pull the country out of the recession but a reversal of the capital control policy and the devaluation of the naira. The continued refusal to weaken the currency has caused capital flight as investors pull their money out of the equity market for fret that a sudden devaluation would lead to a significant loss of investment.