Nigeria is facing a recession.
The ministry of finance acknowledges this fact and described it as a “Technical recession.”
The falling currency value, high inflation, and a budget deficit all contribute to the economic woes of the country.
However, the country still has one ray of hope: low debt.
Nigeria’s low debt profile means there is enough legroom to tap international markets.
The Federal Government want banks to manage a Eurobond sale of as much as $1 billion.
This is the first since 2013.
Thanks to our low debt.
That said, the economic woes bedeviling Nigeria is no longer news.
Buhari’s economic team are under fire.
Last week, Governor El Rufai of Kaduna State took a swipe on the Central Bank of Nigeria’s Governor, Mr. Godwin Emefiele.
El-Rufai condemned CBN’s decision to increase the Monetary Policy Rate (MPR) from 12% to 14%.
According to El Rufai, “We have a Central Bank that has an MPR at 14% and banks lending at 20%.
“Unless the CBN and the banking system make a conscious decision to bring the interest rate down, one day it would be legislated.”
In response CBN said she its current monetary policy option is suited to address the current economic challenges.
“At this moment, what we are doing is what is best for the economy.
“The concern even among the youth is the slide in the value of the naira.
“We have told them that we also need to diversify the economy so that we could have more exports.
“We are also supporting the efforts of the government on this.
“Once we are able to achieve this, we would have the kind of interest rate that we want.
“But at this particular time, to be able to get through the situation, we would have to take the decisions.
“And the Monetary Policy Committee considers all these factors before we take decisions,” Emefiele said.
The CBN governor further explained that Nigeria’s inability to increase her foreign reserve is the reason behind a dwindling naira.
He attributed this inability to the recent drop in global oil prices.
Nigeria’s debt profile is one of the most advantageous ones in Africa and investors like it.
This might be our lifeline to securing foreign loans – that is if Buhari wants to tow that path.