Victims of the plunge in oil prices
The damage to government finances caused by the sharp slide in oil prices is spreading far beyond the Middle East, with Nigeria the latest to feel the pinch.
The damage to government finances caused by the sharp slide in oil prices is spreading far beyond the Middle East. This week, Nigeria was reportedly in talks with the International Monetary Fund (IMF) and the World Bank (WB) for a joint $3.5bn loan.
Oil revenues are expected to make up just 33% of income in Africa's largest economy, down from 70% last year, says Shawn Donnan in the FT. The budget deficit forecast has climbed to 3.3% from 2.2% and it hardly helps that the government has pledged to increase public spending by 40% this year. Nigeria also has a current account, or external, deficit and needs foreign money to plug the gap.
The spotlight is also on Azerbaijan, whose currency, the manat, has plunged to a record low against the dollar. Last year the government spent over 60% of its foreign-exchange reserves trying to keep the manat pegged to the greenback. It's said to be seeking $4bn from the IMF and WB.
Meanwhile, Russia, which needs oil at $80 a barrel to balance its books, has announced a $13bn privatisation programme to plug a budget deficit that could reach 6% of GDP. So who will be next? Venezuela, "if it can recognise the shambles it has made of its economy, looks like a prime candidate", reckons the FT.