Much of Nigeria’s problem comes down to a slump in the price of its main export, oil, and, by extension, government revenues. The trouble has been exacerbated by erratic currency policy—ranging from adopting a fixed exchange rate to cracking down on bureau de change operators—in response to plummeting foreign reserves. Rather than generating the desired effect, the policies have mostly worsened the crisis.
Nigeria’s tanking economy is compounded by spiking inflation, which recently reached an 11-year high, creating a stagflation environment. The timing couldn’t be any worse for Nigerians, with prices for goods inching up in the ever-busy festive season.