Africa’s biggest economy, Nigeria, has slipped into recession after the Nigerian Bureau of Statistics reported on Wednesday that the country recorded two consecutive negative growth rates in the first two quarters of the year.
The latest data showed that Nigeria’s Gross domestic product plummeted by -2.06% in April to June, following the -0.36% dwindling in the first three months which led to its first recession in more than 20 years.
Nigeria, which relied 70% of its government income from crude oil sales, has been hit by the persistent low oil prices over the past 2 ½ years.
Oil prices have hugely dropped from highs of about $112 per barrel in 2014 to below $50 a barrel in recent trading, making it as the biggest driver of the unwelcomed economic slump.
Aside from the struggling oil industry, data showed that the fall in Nigerian currency, naira, has also hurt the economy as it tumbled 30% to a record 282.5 against the dollar despite the central bank’s move to sell more than $4 billion to kick start the economy.
Oil prices closed in red zone on Wednesday as it slid more than 3%, pulling down major stocks indices in Wall Street, after the government data showed a large surprise weekly build in US crude and distillate stockpiles.
Crude stockpiles rose for a second straight week, tallying 2.3 million barrels last week that caused West Texas Intermediate futures to fall $1.65, or 3.6%, to close at $44.70 and the Brent crude futures to drop $1.33, or 2.8%, to finish $47.04 per barrel.
The decline in oil prices dragged US stock lower and gave S&P 500 its first negative month for the benchmark index since February as it shed 0.1% for August.The Dow Jones industrial average lost 53.42 points, or 0.29%, to close at 18,400.88, the S&P 500 gave up 5.17 points, or 0.24%, to settle at 2,170.95 and the Nasdaq Composite lost 9.77 points, or 0.19%, to finish at 5,213.22.