Nigerian Government 's Current Account And Balance Of Payments

1335 Words Aug 31st, 2015 6 Pages
According to Hedley and Gokkent (2015), as a result of the negative shift in Nigeria’s current account and balance-of-payments, foreign investment is forecasted to decrease similar to the substantial reduction the country experienced in 2014. As a result, the Nigerian government has attempted to harden their monetary policies through the increase of government spending (utilizing international reserves and savings accounts) and alleviate the number of investor outflows (Hou et al, 2015; Hedley & Gokkent, 2015). For example, the Nigerian government’s oil savings account has depleted from a favorable amount of $21 billion in 2008, down to $2 billion in 2015 (Wallace & Mbachu, 2015). However, despite these changes and a subsequent 1% increase to their interest rate, their currency value continues to depreciate due to a lack of faith in Nigeria’s ability to withstand continued oil price reductions (Hou et al, 2015; Hedley & Gokkent, 2015). Therefore, Hou et al. (2015) propose that the Nigerian government attempt to discover new bases of growth, especially considering their substantial dependence on oil revenues are causing major adverse effects on both their financial position, government employees, and citizens.
The significant decrease in the value of oil has also exacerbated the economic decline of the Nigerian government, their employees and citizens due to their extreme reliance on oil profits, which accounts for two-thirds of their total revenue (Wallace & Mbachu, 2015).…

Related Documents