Nigeria

To stem an ongoing fall in foreign reserves caused by the oil price crash, Nigeria’s central bank introduced restrictions last summer that have effectively blocked imports of hundreds of items that typically enter Nigeria through its ports, the Financial Times reported. The policy, backed by President Muhammadu Buhari, also aims to boost local manufacturing and agriculture. The country has long used its oil revenues to bring in essential items such as steel and palm oil that the Buhari administration says should be made locally.

Nigeria’s central bank on Tuesday hiked its key lending rate four months after lowering it, as Africa’s largest economy navigates a perilous combination of record inflation and the worst growth in 17 years, The Wall Street Journal reported. Governor Godwin Emefiele said the bank would lift the rate to 12%, up 1 percentage point. That is meant to curb inflation, which rose to a three-year high of 11.4%, last month: “The balance of risk should be tilted toward price stability,” he said.

Stakeholders have expressed support for a new bill that repeals and re-enacts the 37-year-old Bankruptcy and Insolvency Act, Business Day Online reported. The new bill – Bankruptcy and Insolvency (repeal and re-enactment) bill, 2015 – also provides for corporate and individual insolvency to provide for the rehabilitation of the insolvent debtor as well as create the Office of the Supervisor of Insolvency.

A currency crunch in Africa’s top economy is escalating into a French fry shortage, The Wall Street Journal reported. U.S. dollars have become increasingly scarce over the past 18 months as global oil prices crashed, depriving Nigeria of most of its export revenue. So the central bank has toughened rules governing how easily businesses can purchase them. That helped the central bank freeze its reserves at about $28 billion, down around 20% from a year ago. But commerce is paying the price.

Nigeria has asked the World Bank and African Development Bank for $3.5bn in emergency loans to fill a growing gap in its budget in the latest sign of the economic damage being wrought on oil-rich nations by tumbling crude prices, the Financial Times reported. The request from the eight-month-old government of President Muhammadu Buhari is intended to help fund a $15bn state deficit, which has been deepened by a hefty increase in public spending as the west African country attempts to stimulate a slowing economy.

Economists have for months been criticising foreign exchange controls introduced to defend Nigeria’s currency against speculative attack. Now the restrictions are biting the country’s international jet set, who are, to their embarrassment and frustration, finding their debit cards rejected at ATMs, restaurants and shops from London to Dubai and from Paris to New York, the Financial Times reported.

Nigeria has asked the World Bank and African Development Bank for $3.5bn in emergency loans to fill a growing gap in its budget in the latest sign of the economic damage being wrought on oil-rich nations by tumbling crude prices, the Financial Times reported. The request from the eight-month-old government of President Muhammadu Buhari is intended to help fund a $15bn state deficit, which has been deepened by a hefty increase in public spending as the west African country attempts to stimulate a slowing economy.

As if being kicked out of one of the world’s biggest emerging-market bond indexes isn’t enough, Nigeria now faces the risk of its credit rating falling further into junk, Bloomberg News reported today. Standard & Poor’s, which rates Africa’s largest oil producer four levels below investment grade at B+ with a stable outlook, releases a review of its assessment on Sept. 18. A week later, it’s the turn of Fitch Ratings, which has Nigeria at BB-, one level above S&P, with a negative outlook.

The Nigerian government has resorted to chopping down trees lining the streets of its capital to thwart black market money changers, one of a range of unorthodox measures it is deploying to defend its weakening currency, the Financial Times reported. On an August morning in Abuja, a labourer who said he was hired by the city government cut branches from a towering tree with a chainsaw. Nearby other workers hacked away at smaller trees with machetes.

Some of the best-paid people in this country—its lawmakers—are proposing an unusual measure: docking their own salaries, The Wall Street Journal reported. The volunteered pay cut is part of a new austerity descending on Africa’s top economy. Nigeria’s government makes most of its money from oil revenue, which has shrunk along with global energy prices. President Muhammadu Buhari came to office in May pledging to root out extravagant spending by a government that has grown accustomed to unchecked oil wealth.