Nigerian President Muhammadu Buhari's tenure, still in its infancy, can so far be characterised by a number of blunders - the adoption of unorthodox policy, delayed implementation of his budget and exclusion from the JPMorgan bond index. Furthermore, the president inherited structural constraints, ranging from infrastructure shortages to elevated corruption and policy and security concerns, which will continue to cast a dark shadow over the growth prospects of the Nigerian economy.The contraction of Nigeria's GDP in the second quarter therefore comes as very little surprise given the policy mishaps that followed the decline in the oil price - Nigeria's main source of export revenue - which has weighed immensely on the country's terms of trade.In the second quarter , GDP declined 2% year on year from 0.4% in the first quarter. Oil GDP plummeted into deep negative territory (-17.48%) due to a notable reduction in production, which has been disturbed by attacks on pipelines by the Niger Delta Avengers.Should this persist, it is difficult to see how Nigeria will lift itself out of these recessionary conditions.Persistent weakness in the non-oil sector - the largest contributor to economic activity - is particularly concerning. Import restrictions imposed by the Central Bank of Nigeria with the aim of defending the naira's peg to the dollar accelerated the deterioration in non-oil GDP. The restricted items were mostly intermediate goods that are essential for manufacturing.Non-oil GDP declined -0.4% year on year in the second quarter from -0.2% in the first quarter, led by a sharp decline in industry, which fell -9.5% year on year from -5.4%, and a deterioration in services GDP, which was down 1.25% from 0.8%. The slump in GDP was, however, limited by a pick-up in agricultural production.Higher inflation, monetary policy tightening, low oil prices and low levels of confidence are likely to continue to weigh on demand growth. Credit demand is already contracting and indicators of manufacturing production continue to fall. As such, overall real economic activity is expected to remain weak unless oil prices recover notably.The only way Nigeria can lift its growth constraints is by attracting foreign capital to fund infrastructure growth and domestic consumption. Unfortunately, foreign investors have reacted negatively to the central bank's attempts to limit hard currency and many portfolio investors have moved their investments out of the country.Furthermore, the Central Bank of Nigeria's foreign exchange policy is seen as unsustainable by the market and any possible investments into the country have been stalled by expectations for large future currency devaluations. Fiscal policy uncertainty remains high.Inflationary pressures also continue to mount. Headline inflation has been running above the central bank's 6-9% target for just over a year with no clear indication of it returning within target any time soon.Data released by the National Bureau of Statistics showed that headline inflation rose 17.1% year on year in July from 16.5% in June.Core inflation increased 16.9% year on year, up 0.7 percentage points, driven by persistent structural issues, specifically the power and energy challenges facing the country.Food inflation in particular rose to 15.8% from 15.3% in June .Structural challenges aside, the near-term outlook for Nigeria remains uninspiring. The current account deficit and negative real policy rate imply the naira will continue to weaken. In turn, this will push the inflation rate even higher. Consequently, the central bank in all likelihood is not yet done tightening given that persistently high inflation discourages savings and further compromises the central bank's efforts to attract foreign investment. While rate hikes will likely deepen the recession, they would be positive for the naira.The outlook for what was recently one of Africa's shining stars is poor.Nxedlana is FNB chief economist..