Nigeria’s economic growth slows as low oil prices weigh

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Godwin Emefiele, Nigeria"s central bank governor, speaks during a media briefing at the central bank headquarters in Abuja, June 5, 2014. REUTERS/stringer
Godwin Emefiele, Nigeria”s central bank governor, speaks during a media briefing at the central bank headquarters in Abuja, June 5, 2014.
REUTERS/stringer

Abuja (Reuters) – Nigeria’s economic growth slowed sharply in the second quarter as lower crude prices took their toll on Africa’s biggest economy and top oil producer.

Annual growth dropped to 2.35 percent from 6.54 percent a year earlier, the Nigerian Bureau of Statistics (NBS) said late on Tuesday.

Oil production fell to 2.05 million barrels per day from 2.21 million over the same period, the NBS said.

With oil accounting for more than 90 percent of Nigeria’s foreign exchange earnings and about 70 percent of government revenues, the fall in crude prices and output has hurt Nigeria’s finances and its naira currency, with foreign investors pulling out of its stock and bond markets.

The naira has fallen around 15 percent over the last year, with devaluations in November and February, despite the central bank spending billions of dollars to prop up the currency.

The weakening currency has fuelled inflation, which at 9.2 percent is at its highest annual rate since February 2013 and above the central bank’s target range.

On Tuesday, figures showed the continent’s second biggest economy, South Africa, shrank for the first time in over a year, raising the risk that labour disputes and slowing Chinese demand for commodities could push it towards recession.

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