Friday, November 21, 2014 11:18 AM / Meristem Research
A major challenge for Africa's biggest economy over the years has been its over-reliance on crude oil revenues.
Recent events following sustained decline in global oil prices once again accentuate the susceptibility of the Nigerian economy while amplifying other related and non-related risk factors.
This has also amplified investors' apathy and aggravated the rate of funds outflows in search of safety.
The vicious cycle, which began with the slowdown in inflow of easy money (QE tapering) amidst expectations of political and security headwinds in 2014, appeared under control as the monetary policy committee (MPC) further tightened its monetary instruments to ensure exchange rate and price stability.
In the light of recent developments, we analyse the pass-through effects of falling oil prices on Nigeria's 'fiscal strength amidst the austerity measures proposed by the government to cushion economic shocks as revenues dwindle.
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