Nigeria ETF continues to sink

2015-02-13 09:25:09

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Since the beginning of September 2014 Global X Funds' Nigeria ETF has fallen 50%. This trend has not been stopped as since January 29 the ETF has already lost 15%.

 


Nigeria is the largest oil producer in Africa and oil used to account for 40% of the country's GDP and 80% of its geoverment earnings. In 2011 94% of Nigeria's exports was petroleum and 78% was crude petroleum. Recent 7-month-long oil prices' crash has been a financial catastrophe for the country and had an impact on its currency's strength. Recent oil prices' increases are helpful for a number of oil-exporting countries, such as Russia. However, Nigeria is still falling.


It's because oil price is not the only problem for this country. The terrorist organization Boko Haram is controlling large part of Nigeria. It organizes bomb attacks, mass murders and mass kidnapping. By the end of 2014 1,5 million people had fled the conflict zone. The goverment has recently decided to postpone elections. The currency (naira) still decreases and on January 20 the Central Bank of Nigeria did not lower interest rates, despite the slowdown, leaving the key rate at 13%.


The negative influence on the economy is severe. If the situation continues, the ETF will sink even more.

 

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