Nigeria as a country is one of the
biggest countries in Africa. It prides itself with the title: ‘The Giant of
Africa’. With its location situated at the gulf of Guinea, it is a beauty and
one of the most amazing countries in the world. Its amount of mineral resources
and arable land cannot be contested by any other country. It boasts of many
natural landmarks and wild life reserves. Areas such as Cross River National park
and Yankari National park have waterfalls, dense rain forest, Savanna and rare
primate habitats. One of the most recognizable sites is Zuma Rock, a 725m-tall
monolith outside the city of Abuja.
It
runs a Democratic system of Government, which takes care of the country by
trying to meet the needs of the citizens in the country. But when there is no
means to carry out that part successfully by the Government, then it spells a
major problem for the country. The Nigerian Economy has been hit with another
blow of Economic recession, since its last one in 2016. Lets look at the terms
carefully to grasp more of the issue at hand. Firstly, let’s begin with what
the word ‘Economy’ means.
Economy
refers to the state of a country or region in terms of the production and
consumption of goods and services and the supply of money. Conversely,
recession refers to a period of temporary economic decline during which trade
and industrial activity are refunded generally identified by a fall in Gross Domestic
Product (GDP) in two successive
quarters.
Economic
Recession can thus be referred to as a negative real GDP growth rate for two
consecutive quarters, and this can be caused by different things. During the Global pandemic, the world was in
total fear of the Corona virus and strict measures to curb the virus were
implemented by various Governments in different countries including Nigeria. Alot
went into the fight against the virus in Nigeria and both financial and Human
resources were harnessed and the results that comes in daily shows that the
Nigerian Government is winning the War. This is a report worth celebrating but
it came at a high cost. The Nigerian Government put a lot of resources especially
in the area of finance and this can be counted as one of the causes of this
recession that the country is facing right now. There may be other causes which
may include:
1)
Accumulation of debt servicing especially foreign debts.
2)
High interest rates
3)
Mass unemployment and others too numerous to mention but the most obvious is
the war against the Global pandemic that hit the country early this year.
The
data released by the National Bureau of Statistics (NBS) for Q3 2020 shows a
dip of 3.62% in real GDPfor Nigeria which strongly confirms that the Nigerian
Economy has officially fallen into a second recession in 5 (five) years since
2016 when the economy contracted by 1.62%. This does not hold well for the Nation
as this recession comes with its implications.
The
main costs of another recession in the country would be:
1)
Unemployment: This recession would bring about a rise in the number of unemployed
graduates in the country which was already a problem beforehand. A rise in the
number of unemployed youths in this country is certainly not what this country
can look forward to right now as plans were already being made by the
government to reduce the number of youths that are not gainfully employed in
the country to the barest minimum.
2)
Higher Government borrowing: This recession would force the present government
to resort to further borrowing of money from foreign countries which has almost
been a norm in the government of this country beforehand and it is not healthy
for the wellbeing of the country at all.
3)
Rise in poverty: As a result of this recession, an unavoidable rise in poverty
in the country is most likely inevitable. As little or no money is currently in
circulation, the rate of poverty is sure to rise and this is a problem for the
government of the day. These are some of the effects that would be brought
about by this second wave of economic recession that the country is presently
facing. There are others too numerous to mention but these few implications mentioned
are of great concern for any government facing economic recession.
In conclusion, possible solutions that may
help in salvaging this situation include the Nigerian government considering
enforcing a reduction in tax rate both of individuals and companies whether
large or small. There should be effective spending of the nation’s treasury. Also,
the Nigerian government should increase her expenditure on skills. The country
has this in abundance if we can only look inwards. Furthermore, there should be
an increase in Agricultural produce and exports.
As a country we will get out of this problem
as we have always done before. Together we are strong and we remain the ‘Giant
of Africa’.
Isaac
Ologbosere writes from Benin city, Edo State, Nigeria. 08128362829.
