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Supporters of Nigerian President Goodluck Jonathan attend a rally in Abuja, Nigeria, Nov. 11, 2014 (AP photo).

Oil Shocks Hit Nigeria—and Threaten Jonathan’s Re-election

Monday, Dec. 1, 2014

Last Tuesday, Nigeria’s central bank devalued the country’s currency by 10 percent in an effort to shore up foreign reserves hard-hit by falling oil prices. The move comes months before a presidential election and highlights the country’s vulnerability to the price of oil, which makes up 70-80 percent of the Nigerian government’s revenue.

With Brent crude hitting a four-year low of $77.83 per barrel in early November, Nigeria, Africa’s largest oil producer, is feeling the pinch. Government coffers are emptying, and construction companies and other employers have begun to lay off workers. As oil prices could remain low for 2015, Nigeria must plan for a lean year. On Nov. 16, Finance Minister Ngozi Okonjo-Iweala announced that the government would cut expenditures by 6 percent in its 2015 budget, lower the budget’s benchmark for oil prices from $77.5 to $73 and raise taxes on certain luxury items. That move was followed by last week’s currency devaluation. ...

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