Falling oil prices have led to crude oil exporting countries into taking additional measures concerning their internal affairs, looking further into corruption cases and clamping down on laundered state funds from previous or existing high ranking politicians. Nigeria is a good example of such case.
The Federal Government of Nigeria has disclosed that as much as N54.8 billion have been recovered from a few of the people who were investigated. Additionally the state has prosecuted over $2.1 billion arms purchase deals which is now referred to as the Dasukigate.
Earlier in a press update the Federal Minister of Information and Culture, Alhaji Lai Mohammed stated the following:
“What so far has been recovered from those being prosecuted in respect of Dasukigate is about N54.8billion”
$2.1 billion for the Dasukigate case could appear to be big news, however, looking at the bigger picture, the corruption in Nigeria appears to be humongous. According to our sources in Nigeria only for the 55 individuals, who are currently under investigation over corruption cases, are expected to have stolen as much as N 1.34 trillion (Current rate: $6.8 Billion) between 2006 and 2013.
It is not just Nigeria suffering from falling oil prices and corruption, almost every oil producing country in the world has suffered from the recent falling oil prices.
One of the worst oil crisis, affected countries is reported to be Azerbaijan. The country has been previously subjected to international criticism when the State spent billions of dollars to host Eurovision and European games. This week the government has entered into negotiations with the IMF in order to get a $4 billion loan.
But IMF loans don’t come without certain conditions. Historically, the IMF demands the following reforms from governments when they accord loans:
- Significant reduction in state expenses
- Reduction in salaries of public servants financed by the state budget
- Reduction in state subsidies
- Liberating the trade laws
- Eliminating the import limitations
- Focusing on internal production and creating export based industries
- Devaluation of the national currency
- Clamp down on corruption
- Attract foreign investors
Thus, looking at the above picture we can see and expect that the challenge for these Oil Producing countries is just starting.
As the inflated oil money disappears, oil corruption in Nigeria and Azerbaijan struggle for power. Thus, we can expect to see further Nigerian Naira depreciation and additional devaluation rounds in the Azeri manat in an attempt to save these countries’ economies.
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