The Nigerian Stock Exchange All Share Index fell 3.7 percent on Wednesday to 25,072.66 by 2:22 p.m. in Lagos, the lowest level since September 2012 and the most among 93 global indexes tracked by Bloomberg after Egypt. The measure is down 12 percent since the previous peak on Dec. 31, more than the 10 percent drop that indicates a market correction, Bloomberg reports.
Nigeria, Africa’s largest oil producer, is struggling to cope with crude oil prices that have fallen to below about $31 a barrel. The slump is weighing on growth, which is estimated to have slowed to 3.2 percent last year, the slowest pace this century, according to a Bloomberg survey of economists.
The Nigerian government is also facing mounting pressure to devalue the naira. The central bank has held the naira at 197 to 199 per dollar since March and introduced trading curbs to conserve reserves but this is affecting businesses and manufacturers which are having difficulty accessing foreign exchange for imports. The Central Bank of Nigeria this week lifted a ban on dollar cash deposits, ending a six-month embargo on banks from receiving dollar deposits from customers. It also stopped selling foreign currency to BDCs in an effort to maintain its reserves.