Is corruption protecting Nigeria from a downturn? Will the pain be felt in Switzerland?

Oil was 70% of Nigerian government revenues but is expected to be just one third this year due to the drop in prices. Nonetheless, the economy is expected to grow 3.25% this year, up from 2.8% last year and the budget deficit is expected to be only 2.2% of GDP. (Less that the US's 2.5%)

It is possible that the effects of the low oil price are attenuated in Nigeria by the fact that much of the oil money never reaches the economy in the first place. In 2014, for example, the head of the central bank lost his job when he complained to President Goodluck Jonathan that $20 billion had "disappeared" from the central bank's vaults over a single 18-month period. Likewise, when it turned out that despite having a big defense budget the Nigerian army soldiers sent to fight Boko Haram didn't have ammunition, one senator lamented that "we thought they were siphoning off 75% but it turns out it was 90%."

But no disadvantage is without some corresponding advantage, and we we seeing it in Nigeria. Since the money never reached the people, they do not feel its absence. The people who will ultimately suffer are the poor Swiss.

You may read the FT article on Nigeria's request for a $2.5 bn World Bank loan by clicking the picture below: