Pop quiz: Which oil rich economy hammered by the global slump in crude is in the throes of a full-fledged economic crisis — complete with rationing, civil strife and runaway inflation stoked by a weak currency?
If you guessed Venezuela, you'd be wrong. Although the South American country teeters on the edge of collapse and fits the above scenario, those same circumstances actually apply to Nigeria. Once a powerhouse of West Africa's economy, the effects of slumping oil prices have converged with mounting security concerns and widespread energy shortages.
Nigeria "is caught in a macro hurricane," famed short seller James Chanos told the annual Sohn Investment Conference last week. With currency reserves running low, the country could have "a big problem" within a few years, he said. Calling the country "a borderline failed state," Chanos added that he was shorting South African assets, in part because of their exposure to Nigeria.