The global economy is becoming so uncertain and there are concerns the world might slip into another financial crisis soon with the impending financial crisis in Europe which is now more complicated with Brexit, the political instability in some part of the Arab world, recessionary outlook of oil dependant countries and growth slump in China.
There is certainly no country or super cohesive group in the world that is having a good day managing the economy at the moment and Nigeria is one of the highly challenged countries because, though with valuable human and natural capital potentials, Nigeria has generated so much revenue from a mono product without tangible infrastructural and human capital developments. Mathias Okwe of the Guardian Newspaper on 20 June 2015 explained how Nigeria generated a whopping NGN41.6 trillion from oil revenue and taxes in 4 years between 2011 and 2014 without real economic growth. It is unfortunate that there are degenerative challenges today occasioned by low investment in infrastructural development and wanton looting of the treasury over the age of the country independence that have contributed cumulatively to the economic woes that the country now face, we have all the leaders that have served from inception to date to blame for it. We have not seen a good expression of political economy in Nigeria from inception and the various markets are still underdeveloped with so many underdogs and high exploitations by few. We have seen how some companies make double digits return on sales, the downplay of fairness and trade disclosure and one can only imagine that the woes are over.
The Nigeria economy has slumped into recession and there are panics in the expression of the crisis on the street because of price inflation, degenerating unemployment rate, primary healthcare issues and high level of insecurity among myriad of other issues. Now, what is recession?
Thebalance.com defines recession as when the economy declines significantly for at least six months. That means there's a drop in the following five economic indicators: real GDP, income, employment, manufacturing, and retail sales. People often say a recession is when the GDP growth rate is negative for two consecutive quarters or more. But a recession can quietly begin before the quarterly Gross Domestic Product reports are out. On the other hand, Wikipedia.com describes it as a negative economic growth for two consecutive quarters. It is also a business cycle contraction which results in a general slowdown in economic activity. 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.
The general knowledge of economic recession is defined around negative economic growth for at least two quarters, it is also a red alert when a nation’s population growth rate is higher than the GDP growth rate and all these have been experienced in Nigeria and we have seen contraction of about 2.06% in Q2 of 2016. There is absolutely growing hunger and insecurity. The effect of retrenchment, refrainment from salary payment by companies and government and the capital flight from the economy is alarming. It is expected that the devalued NGN should attract investors but there are daunting challenges that investors are experiencing ranging from lack of quotation of Nigeria bond on international indexes and poor rating of the economic outlook.
The trepidation of recession is high and thick in the air but Nigeria is not in total bad shape yet, yes, the woes are there but Nigeria with great demography of youth can launch a comeback. The first quick win strategy is for government to empower the youth to be useful in nation building. Secondly, government should invest in 'agri-commerce' and solid minerals, reborn some moribund industries like the textile industry, iron and steel and some other extractive minerals and then drive privatization and commercialization of the economy. The last point is for government to come out with a roadmap to recovery, communicate through the constituency outreaches and pioneer agri-commerce campaign with expansion of market opportunities, machineries and assistance for farmers. The state governments should be compelled to pay salaries of staff in the state without prejudice of sacking innocent people in the guise of elephant verification. Pensioners are dying daily while looters of their monies are jetting the countries of the world seeking health solutions in the best hospitals and lounging in luxury Islands.
The woes of recession are evident in the experience of the people of Nigeria but the wins are latent in government and government should come out bold, seat at the front row participating, this is lacking in the current government and our President needs to provide leadership to ensuring that the current economic recession do not last beyond this year. When recession last between two to four years, it is called depression and without working with all stakeholders to ensure the economy come back on growth track, depression looms as there are red indicators already.
It is also important for the people to become prudent and without panicking while the economy rebounds. One of the advantages of recession is that it creates new entrepreneurs out of the youth population and every youth in Nigeria should think fast and take advantage of the volatile environment to grow the future.