What does Recession in Nigeria mean?
Yes, it isn’t news anymore.. Nigeria is in a recession. Recession. A word that seems to be stinging the ears of Nigerians. If i may ask, what is recession? I am with the millions of Nigerians that will like to understand what it means to be in a recession.
According to www.study.com, “Economic recession is a period of general economic decline and is typically accompanied by a drop in the stock market, an increase in unemployment, and a decline in the housing market”. Simply put, people are going to lose their job, the value of the nation’s currency is going to drop and people will lose their homes.
Economic recession didnt just happen overnight. There where some mitigating factors that led to the collapse of the Nigerian economy. These factors are:
1. Decreased consumer confidence : consumers are less likely to spend money when they believe that the economy is bad. The psyche of Nigerians is adversly affected when they hear that the economy is in recession.
2. High interest rates: This is another factor that leads to recession. High interest rate leads to decrease in liqudity i.e, the money avaliable for investment is greatly reduced.
3: Inflation: This is probably the main reason why Nigeria’s economy crashed. Inflation is defined as the general increase in in price of goods and services over a period of time. It is no news that the price of foodstuffs and other commodities have steadily been on the rise for the past ten years. The percentage of price of commodities rises in tandem with inflation
4. Bad Leadership: The blame for recession rests squarely at the foot of the government. The policies of the government most at times led to the country entering into a recession. Selfish and greedy political decisions of the government often leads to recession.
How to end the Economic Recession.
So many people have postulated solutions to end the recession. Some are realistic, some are just unrealistic. Here are some solutions according to erudite statesmen and scholars in and around Nigeria.
1. Pay workers and contractors: According to The Guardian, “an economist, Dr Aminu Usman, has advised the Federal Government to pay contractors and award new contracts as part of short term measures to reflate the economy. He said that government should ease border controls to allow for food importation to reduce food price inflation.”
2 Intervene in Rural infrastructure: Dr Aminu Usman also advised the government to intervene in rural economies through rural infrastructure initiatives like the defunct Directorate of Food, Roads and Rural Infrastructure (DFFRI).
According to him, these initiatives will unlock recovered corruption money.
He advised the government to invest heavily on infrastructure and create favourable business environment, especially through sound macro-economic policies on long term measure
3.Micromanaging; “Nigerians need to adjust to the present conditions and living patterns” This is according to Prof John Bulus. Such changes may include relocating to affordable accommodation and switching of children’s school to affordable ones.
4. Grab business opportunities: This is the time to make the most of business opportunities like Lowcost Canteens, Lowcost transportation business, sale of affordable food items, small scale crops and animal farms.. This is because people’s needs will be reduced to basic amenities like foodstuffs and the rest. It is actually a good time to do business and it resuscitates the economy.
In all, we should be grateful that we arent in a depression. That is much worse. The economy will eventually bounce back better and stronger.