THE IMPACT OF ECONOMIC RECESSION ON THE NIGERIAN POPULATION A CASE STUDY OF EDO STATE

Abstract

It is pertinent to say that the objective of the study is to ascertain the impact of economic recession on the Nigerian populace, other sub objectives include to ascertain the effect of economic recession on the productivity of Nigerian; to ascertain the impact of recession on economic growth; to ascertain the relationship between recession and economic growth and to evaluate the role of recession on economic development. The instrument of data collection that was used for this study is the questionnaire, and the questions was adequately structured to obtain the needed information from the respondents, and the method of data analysis was the chi square in which adequate hypotheses was adequately analyzed and relevant conclusion and adequate recommendation was maid by the researcher.

 

 

 

 

CHAPTER ONE

INTRODUCTION

• Background of the study

Nigeria as a nation started enjoying economic buoyant before and after independence despite the fact that her economy was a primitive one. Oyewole (2016) noted that Nigeria economy is a primitive one which its fundamental production tools remain among others hoe, axe and cutlass, and production depended on energy stored in muscles. Not long to the independence oil was discovered and continues booming till 1970s. As a result of this, the agriculture which had been the mainstay of Nigeria economy was abandoned due to the discovery of crude oil in large quantity. It is obvious that every Nigerian has now realized the dangers of an economy that is largely based on oil revenue which its price is dwindling in the global market. The dependence coupled with the huge cost of running and maintaining our political structure was always a recipe for disaster. Consequent upon this, Nigerians have finally been confronted with the stark reality that the economy is in recession. The effects of this economic downturn are already being felt by all and sundries in the form of unpaid salaries, inability to pay rent, inability to pay children school fees and even inability to feed. The word recession according to Wikipedia in Afe (2016), is a state of 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. 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. NDE (2004) affirmed that the emergence of global economic recession in 1980s has led to the galloping state of Nigeria economy. Conversely, Oyewole (2016) observed that about 57 percent of Nigeria citizens are living below $1 per day and live very poorly in all development indices. The factor behind this is over population. National Directorate of Employment NDE (2010) said Nigeria has a population of over 150million people and an average annual growth rate of 2.5 percent. The challenge brought by over population and standard of living below $1 per day is diverse socio-economic ranging from inflation, unemployment, poverty, lack of access to potable water and medical care, lack of basic amenities and high level school dropouts among the youths (FRN, 2004). The above mentioned diverse socio-economic are challenges of economic recession that Nigeria is battling with since 1980s despite the fact that the country was ranked among the 50 richest countries in the world in the early 1970s (FRN, 2004). Unfortunately, Nigeria has retrogressed to become one of the 25th poorest countries at the threshold of the 21st century. Igbuzor (2006) noted that Nigeria is the sixth largest exporter of oil and at the same time hosts the third largest number of poor people after China and India and currently challenged with economic downturn. Hornby (2006) described challenge as a demanding task or situation. It is an act or statement that calls something into question. The author further stated that it is the act of raising doubt as to whether something is true or genuine. Challenge is a problem that someone face to attain the set objectives. It is a problem of implementation. Therefore, the challenges of economic recession are the problems that arose as a result of short term economic reduction in the country. The challenges of economics recession ranging from insecurity, inadequate payment of salaries and wages, child abuse, scarcity of food supply, improper education, loss of job, unemployment, high cost of production, embezzlement, poverty, lack of access to portable water, high level of school dropout, inflation and stagnation. Ogbimi (2007) asserted that most government began to spend huge sums of money on military projects and abandoned the old tradition of balanced budget which resulted into inflation and stagnation.

• STATEMENT OF THE PROBLEM

It has been observed and with reports from various quarter that Nigeria’s economy is under renewed tension, as reports on key fundamentals, including Gross Domestic Product, GDP; inflation, employment/ unemployment, capital importation, among others, were worse than expected. According to National Bureau of Statistics (2016), Nigeria’s GDP at constant basic prices, contracted in the second quarter of 2016 by 2.06 per cent after shrinking 0.36 in the first quarter. Technically, given that Nigeria’s GDP has now showed a decline for two consecutive quarters is evidence that the economy is in recession. According to the report, the continuing decline in the value of capital imported into the economy was symptomatic of the difficult period that the Nigerian economy is going through. The recession had brought about an undeniable feeling of disappointment in the economy, affecting the naira and generating series of discussions.

• OBJECTIVE OF THE STUDY

The main objective of the study is to ascertain the impact of economic recession on the Nigerian population; but for the successful completion of the study, the researcher intends to achieve the following sub objective

1. to ascertain the effect of economic recession on the productivity of Nigerian;
2. to ascertain the impact of recession on economic growth;

• to ascertain the relationship between recession and economic growth

1. to evaluate the role of recession on economic development
   • RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H₀: economic recession does not have any effect on the productivity of Nigerians

H₁: economic recession does significant effect on the productivity of Nigerian.

H₀²: economic recession does not have any significant impact on economic growth of Nigeria.

H₂: economic recession does have a significant impact on the economic growth of Nigeria

• SIGNIFICANCE OF THE STUDY

The study will be of great importance to the government of Edo state as the study will help them to formulate policy that will aid productivity amidst recession. It will contribute immensely to the exploration of the effects that have led to the backwardness of industries in the area of study and suggested possible solutions to those effects identified and it will be of significant value to the three tiers of government which are federal, state and local in the allocation of resources so as to cater for potential and aspiring industries that are on the rise.

Furthermore, it will be of significance to manager existing and potential entrepreneurs and directors of subsequent industries in Edo State. Knowledge about its significant finance will equip incoming and aspiring investors who tends to invest in the industrial sector so as to ensure efficiency and maximum prosperity towards development. The study will also be beneficial to researchers who intend to embark on study in similar topic as the study will serve as a guide to their study. Finally the study will be beneficial to academia’s students and the general public.

• SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers the impact of economic recession on the Nigerian population. But in the cause of the study, the researcher encounters some constrain which limited the scope of the study;

(a)Availability of research material: The research material available to the researcher is insufficient, thereby limiting the study.

(b)Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

(c)Finance: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover

1.7 DEFINITION OF TERMS

Oil glut:  Oil glut simply refers to a situation where there is excessive supply of oil by the various oil producing in a countries.

Economic recession: economic recession is a period of well lightening a period that is characterized by drastic cut down on aggregate demand for goods and services.

Infrastructural facilities: These are materials needed by new and existing industry to have effective and smooth running of the firm in order to ensure maximum profit and the firms actualizing it’s objectives.

Raw materials: It simple means the manufacture outputs (goods and services)

1.8 Organization of the study

This research work is organized in five chapters, for easy understanding, as follows Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study its based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion and also recommendations made of the study.

 

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