As Nigerians continue to protest against government policies that have pushed inflation to a nearly three-decade high, the country’s economic troubles have deepened.
Nigeria’s sovereign-risk premium has soared to an eight-month high, while its dollar bonds have become some of the poorest-performing assets in the emerging markets, according to Bloomberg Africa Reports.
The nation’s sovereign-risk premium surged 16 basis points to 640 basis points on Friday, nearing its highest level since November, based on data from JPMorgan Chase & Co. Strategists from CitiGroup Inc., Alexander Rozhetskin and Luis Costa, attribute the decline in economic performance to political instability and a challenging environment for reform in Nigeria.
The economic hardship is stark, with 40% of the population living in extreme poverty. The protests, sparked by the rising cost of living, have already led to the loss of at least 13 lives on the first day alone. Nigeria’s sovereign bonds have notably underperformed over the past two months, especially in recent weeks, as concerns around the cost-of-living protests escalate.
The demonstrations, which began on August 1, demand better governance and relief from soaring living costs. However, the government’s crackdown on peaceful demonstrators has resulted in fatalities and injuries, with suspected sponsored hoodlums hijacking the protests in some areas, further complicating the situation.
Credit: Bloomberg Africa