Abstract
The present economic recession in Nigeria is a manifestation of long-term ills in the structure of the economy that became full-blown under the present government. The recession seems to affect socio-political structures, Nigeria’s credit condition, general living standard, imports, production and employment as well as consumption demand in Nigeria. Fast developing economies like China, India, Brazil, including Vietnam and Thailand depend on exports to drive their economies.
Nigeria cannot afford to do otherwise. 80 percent of Nigerians still lack access to electricity, decent housing, portable water and good healthcare. This figure is growing as a result of increasing unemployment caused by the recession. For many years, the importation of petroleum products covers 30 percent of Nigeria’s GDP, importation of toothpick, rice, fish, cassava starch, sugar and processed tomatoes take 20 percent; importation of garments and fabrics 15 percent, importatio
CHAPTER ONE
INTRODUCTION
1.1     ÂÂÂ
BACKGROUND TO THE STUDY
Recently
in Nigeria, the CBN and the Finance Minister have told Nigerians that the
nation is in an economic recession, it is very important that the impact of
this recession on the Nigerian populace is well understood. The causes can be
well understood if the definition of an economic recession is revisited. An
Economic Recession is defined as a significant decline in economic
activity spread across the economy, lasting more than a few months, normally
visible in real Gross Domestic Products, real income, employment, industrial
production, and wholesale-retail sales.(US National Bureau of Economic
Research).
Generally
in economics, a recession is a negative economic growth for two consecutive
quarters. It is also a business cycle contraction which results in a general
slowdown in economic activity (Merriam-Webster Online Dictionary, 2008).
Macroeconomic indicators such as GDP (gross domestic product), investment
spending, capacity utilization, household income, business profits, and
inflation fall, while bankruptcies and the unemployment rate rise.
Recessions
generally occur when there is a widespread drop in spending (an adverse demand
shock). This may be triggered by various events, such as a financial crisis, an
external trade shock, an adverse supply shock or the bursting of an economic
bubble. Governments usually respond to recessions by adopting expansionary
macroeconomic policies, such as increasing money supply, increasing government
spending and decreasing taxation.
A
recession has many attributes that can occur simultaneously and includes
declines in component measures of economic activity (GDP) such as consumption,
investment, government spending, and net export activity. These summary
measures reflect underlying drivers such as employment levels and skills,
household savings rates, corporate investment decisions, interest rates,
demographics, and government policies.
A
researcher, Koo (2009) wrote that under ideal conditions, a country