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This has become an exceptionally difficult market for those working in or with it, whether their customers are governmental or private. The reason, simply put, is the level to which world market prices for oil have fallen and the impact this has had on a country where the black gold accounts for some 70% of government revenues – close to 85% if indirect taxes are taken into account – and virtually all of the foreign earnings. Many other oil exporting nations have used the years of plenty, brought on by high oil prices, to accumulate nest eggs for the rainy day. The Nigerian system has proven to be far too corrupt for this and has allowed for the theft of vast amounts of money.

The former Central Bank Governor Lamido Sanusi has put the questionable diversions at more than a billion dollars a month. The mismanagement of the state oil company NNPC (Nigerian National Petroleum Corporation) has been a heavy drag-anchor on investment in new reserves and has sapped the spending power of the state. Now, the national treasury is depleted, many of the country’s 36 states are struggling to pay salaries and official international monetary reserves have plunged to less than four months’ import cover. Economic growth ground down to 2.8% last year from 6.3% in 2014 and the IMF probably errs on the side of optimism with its prediction that GDP this year will gain by 2.3% (which would already be slower than the growth of the population).

The biggest problem right now is that months of shrinking oil revenues have created an increasingly painful dollar shortage as the government hoards FX to try and safeguard minimal reserves and exporters & investors are holding on to their foreign currency as well, convinced that the naira is inevitably headed for another major devaluation. The Central Bank has progressively tightened access to foreign currency under a system in which it refuses to sell FX without proof that it is needed to fulfill a planned transaction. It has been trying to hold the official exchange rate at around 198 nairas to the dollar while in the money-changing stalls near the airport, in the black market, greenbacks can cost upwards of 380 nairas.

Even when an item is not on the much-lengthened banned list, it reportedly takes six to seven months to get a letter of credit established for dollars. No wonder that now factories and retailers cannot get the hard currency they need to pay suppliers abroad, often because the CB simply does not have the cash and frequently because it says that importers can get substitutes at home for what they want to buy abroad (which is by no means always true). Countless factories have had to gear back or even suspend production for lack of needed materials and spare parts. Supermarkets in Lagos & elsewhere are having a devil of a time trying to keep their shelves stocked. The country is suffering one of the worst fuel shortages in years, lacking, as it does, the infrastructure to refine its crude at home. Even power plants have had to stop producing electricity because they can no longer pay for maintenance.

Banks, too, have become considerably higher risks than they used to be, largely because they have lent heavily to local energy companies. Many are restructuring loans in the hope that the oil price will recover, but this is wishful thinking. By some accounts, if it were not for the restructuring, the energy sector’s non-performing loan ratio would be 15% (the CB currently puts it at 4.65%). There are doubts about the ability of borrowers to meet obligations as they come due, the value of their assets is close to zero in many instances, and a number of Nigerian banks, including the largest by assets (First Bank, where oil & gas debt makes up a whopping 47% of the total loan book) have issued profit warnings in recent months.

The government is seeking to borrow large amounts of money from, inter alia, China and Japan to manage the fiscal deficit and fund urgent infrastructure work. Finance Minister Kemi Adeosun has said that Nigeria this year may issue its first yuan-denominated bond. Talks are underway with the World Bank and the African Development Bank for billions in loans. But these could turn out to be risky borrowings considering the fragility of the naira. Meanwhile, President Muhammadu Buhari seems to think that the scarcity of foreign goods will prompt Nigerians to buy from their own farms and factories and will give rise to an industrial revival.

Generally, Nigeria has much going for it. It not only boasts vast oil and gas wealth but also fertile soil, untapped mining riches and entrepreneurial people with a reputation for excelling when they live and work abroad. Its population of 187 million makes for a potentially large market offering benefits of scale. Although often described as a “mono-commodity state” it does not really fall into this category since even at the recent peaks oil accounted for only about 10% of GDP. Almost half of the economic output now comes from services. A home-grown film industry, widely known as Nollywood, has become the world’s second largest by output.

President Buhari’s election last year marked the first time in the country’s 55-year history as an independent state that a ruling party was ousted by ballot rather than bullet. Since then, Mr. Buhari has accomplished quite a bit of what he had promised. He has restored a semblance of security to stretches of Northern Nigeria plagued by the murderous Boco Haram, now an affiliate of ISIS. He has begun to tackle rampant theft in the oil industry and tighten revenue collection. He has let it be known that the government will no longer subsidize fuel and sell it at below-market prices. Ministry payrolls are being cleaned up and “ghost workers” removed from them. There is progress against corruption. Government agencies now have to account for their revenues and expenditures.

Even the deeply troubled NNPC has started to post monthly updates of its financials and has published a detailed report covering its 2015 activities. A former ExxonMobil executive has been appointed by the President to head an entity charged with managing the country’s largest revenue stream. But even under the best of circumstances, straightening out what has gone so wrong will take time. While many are still willing to give Mr. Buhari the benefit of the doubt, others are becoming impatient and there is a sense of growing tension in Lagos and Abuja (the commercial and political capitals). The outlook is certainly not all bleak. For the foreseeable future, though, Nigeria will remain a high-risk market.