Nigeria Economy in Recession: What it Means

In economics, a recession is a period of negative economic growth; a period of temporary economic decline during which trade and industrial activity are reduced. While discussing recession, macroeconomics, which is a branch of economic study that deals with the performance, structure, and decision making of the economy, is brought into focus.

In a period of recession, macroeconomic indicators such as GDP (Gross Domestic Product), investment spending, household income, business profits, and inflation fall, while bankruptcies and unemployment rate rise. In addition, recession is generally experienced when there is a widespread decline in spending, triggered by the nation’s financial crisis and an adverse supply shock – i.e. when a sudden change in price of a commodity affects the equilibrium price of goods and services). With that said, it is however, sad to conclude that Nigeria is in this state of economic tragedy.

While economists proffer solutions for this state of economic growth, such as the government adopting expansionary macroeconomic policies by increasing money supply and government expenditure, and also through decreasing taxation, one will have to wonder if Nigeria government is capable and ready to go through with them, given their proven incompetence in these economic matters and the sad fact that Nigeria has a reputation for being one of the countries in the world with bad governance.

However, Nigeria government can choose to solve this problem of recession if it employs the services of master brains and economists who can both theoretically and practically analyse the economy situation of the nation. But I’m afraid they will be too busy with sentimental politics that serious national matters as this are often treated over political merriment and with absolute levity.