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

Oil Shocks Hit Nigeria—and Threaten Jonathan’s Re-election
Supporters of Nigerian President Goodluck Jonathan attend a rally in Abuja, Nigeria, Nov. 11, 2014 (AP photo).

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.

As the government recalibrates, the opposition has taken advantage of the market’s uncertainty to articulate a leftist economic vision for Nigeria’s future. Meanwhile, some observers wonder whether the plummeting oil prices will affect the financing for incumbent President Goodluck Jonathan’s re-election bid or dampen Jonathan’s appeal. Others speculate that his campaign already has the funding it needs—licit or illicit—to dominate the field.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.