Nigeria’s Economic Recession. 2017 Budget As An Exit Strategy.
Before we dive into the aforementioned topic, we need treat what exactly an Economic recession means. According to what I did study in the university, An economic recession has been defined as a sharp decline in the gross domestic product (GDP) for two or more consecutive quarters. For GDP has been defined as the market value of all goods and services produced within a country in a given period of time.
If this be the case, Nigeria has been experiencing this situation for some time now.
No doubt about the fact that Nigeria as at now, is experiencing recession the worst the country have experienced. Well, we will be taken a holistic view on how the 2017 Budget will be an exit strategy. But before then, we need to analyse how did Nigeria actually found herself in this situation.
According to experts, “when a Nation refuses to plan ahead, it falls into mess as serious as this”. A nation that fails to plan, have already planed as it where. The current economic woes the Nation finds herself was not caused today by the present administration led by President Buhari that will be a lie if ever we say so. The lack of financial plan by the last administration was a prerequisite for the dire situation we are today.
We all remember that during the administration of Jonathan, oil went higher and Nigeria whose crude is the most valued among in international market sold a barrel for a very high significant cash but due to wide spread of corruption, that very administration could not give account for the wastage.
Factors that Cause Recessions
Now we need to analyse some basic factors that must have led to the current financial situation today.
We have what we call the High interest rates which are is a very huge cause of recession because these high interest rate do limit liquidity, or the amount of money available to invest.
When a country starts experiencing an increased inflation. From definition we could tell that Inflation refers to a general rise in the prices of goods and services over a period of time. That is to say that as the prices of goods increases, the percentage of goods and services that can be purchased with the same amount of money decreases. That is exactly what Nigerians are finding themselves currently. Where a bag of rice is sold for N27 thousand naira.
Reduced consumer confidence. In this scenario, If consumers do believe that the economy is bad as we have it in Nigeria, they are less likely to spend money because of the fear that it might not come back to them. This is the exact scene we are facing here in Nigeria. Experst do believe that consumer spending can have a real factor on the economic situation of the country though Consumer confidence is psychological.
Reduced real wages,. This means that a worker might be making money which he do makes before but his paycheck is not keeping up with inflation. This means that his purchasing power has been reduced drastically. This might also lead to inflation.
For the complete publication, click >>> Nigeria’s Economic Recession. 2017 Budget As An Exit Strategy