Nigeria’s Naira Slumps 2%, Causes Halt In Electronic Trade      

VENTURES AFRICA – Nigeria’s Naira fell 2.03 percent today, from its Tuesday close of N199.90 to N203.96, triggering a halt in electronic trading for the first time ever, dealers told Reuters news agency. The local currency has fallen by over 30 percent in the last six months. This was driven by the global fall in oil prices, and dampening investor confidence due to the elections.

The postponement of Nigeria’s election has wasted little time in inflicting more damage to the country’s already suffering economy. Since Monday the Naira has suffered daily records lows, a trend that analysts have blamed on the shift of the elections by Nigeria’s electoral authority (INEC) because of security concerns.
Ventures Africa, had on Saturday predicted negative economic reaction to the postponement of the polls, see story here. Nigeria’s economy, albeit Africa’s largest, could tumble further with a hike in political tension, which the postponement of the elections has a high potential of doing.
Foreign investors sold off Nigerian stocks valued at 846.5 billion naira ($4.5 billion) last year, Reuters news agency said last week, citing the country’s stock exchange. The shares sell off, 65 percent more than in 2013, was impacted on by the 2015 election tension as investors are unsure about keeping their funds in a volatile market. With the two rival parties at loggerheads, and postponement in the centre, there could be more divestment in the coming weeks.
Nigeria’s foreign reserves, starved of oil revenues and drenched by the costly but futile defence of the Naira, have dropped more than 25 percent. The government’s reviewed budget, 23 percent than the first draft,  has one of the  lowest capital spend ever. All of these issues have been driven by one single factor; uncertainty. Oil prices are still in free float, the Nigerian political scene is highly volatile, and so is the Nigerian investment space.