This study seeks to examine and analyzed the impact of the current economic recession in Nigeria on the masses, using the Federal University of Benin (UNIBEN) in Edo State as the case study. Five research questions and two hypotheses were formulated to guide the study. The population consisted of 200 students and lecturers from the University of Benin in Edo State, Nigeria. Data collected with a well-structured questionnaire was analyzed using simple percentage while hypothesis formulated were tested at 0.05 significance. The study revealed that the current recession has a positive effect on the lives and wellbeing of Nigerians. This goes a long way to say that increase in inflation leads to increase in the cost of living of the citizens. The study suggests that citizens and government should synchronize and work together to tackle the damaging effects of economic recession.
1.1 BACKGROUND OF THE STUDY
There is a difference between Economic growth and economic development. Economic growth is purely GDP but economic development is a broader concept that includes not just GDP but also indicators like social justice, income distribution, political freedom, pollution, Equality of income. GDP captures average national income, but do not reflect how that income is spent. Recession has remained a chronic problem for Nigerian citizens for some time now.
Recession is not a new word in the world economy and not out rightly bad, but the case of Nigeria is severe because it has destabilized the entire economic frame work ever since it sets in. This problem has brought about reduction of purchasing power discouragement of real investment balance of payment disequilibrium and unemployment.
Recession in Nigeria can be said to be a direct result of the policies of the country’s government to stimulate a fast rate of economic growth and development since 1951 when it was introduced. Inflation trend since independence shows to distinctive period. Until 1969 we had single digit inflation and even a negative growth rate in 1963, 1967 and 1968. The year 1975, recorded 33-7 percent indicating the effect of 1974 Udojji salary Awards (Adigun, M.S 1985 “Reviving the Nigeria economy”).
The Nigerian economy seemed to have experience moderate inflation prior to the advent of the structural Adjustment programme (SAP) in 1986. Recession on its own is not bad as studies have shown that there exists a positive relationship between inflation and growth. But the problem lies on a country continuously having high inflation rates. It has been revealed that a close relationship exists between recession and diminishing growth rate across a variety of recession ranges. Average growth rates falls slightly as inflation rate across a variety rates more towards 20-25 percent. The growth rate declined more steeply as recession rates approaches 25-30 percent and growth rates became increasingly negative at a higher rate of inflation (Ogwuma, P.A. 1986; Gains and pains of inflation in the manufacturing sector of the Nigerian economy”.
During the recession, economic hardship knows no limits and boundaries, it affects livelihood of everybody in one-way or the other- and this naturally gives impetus to survival instincts as people work harder and more effective to tackle the new economic realities (Invest Advocate, 2016).
In a recession, families with little or no buffers to resist the effect of recession are most likely to be hit severely – but there are ways the unfortunate condition could be managed. In additions to what our previous articles on recession had shown, we write on how to improve situation while awaiting economic interventions from FG in near future.
Job loss or unemployment is usually high during recession as employers deploy rightsizing approach to cut overhead cost- Job loss destabilizes families, which may trigger other unintended consequences like depression and alcoholism that may have serious effect on wellbeing. The effect of no source of income to meet basic family needs and obligation may cause frictions among families, which may lead to long lasting damaged family relationships. For instance, some families had already cancelled holidays abroad, sold houses and changed children’s schools to public schools as a way to cope with recession (Invest Advocate, 2016).
According the National Bureau of Statistics (NBS) the Nigerian economy slid into recession path in first quarter (Q1) of 2016 (since 2004) with real GDP of-0.36 percent, the contraction of economic activities resulted from an evaporation of confidence and no new investments, inordinate delay in government speeding during the period, acrimonious legislative squabbles in approving budget, erosion in the value of Naira in the forex market, pipelines vandalism, misaligned currency and forex shortages, high interest rate environment as well as trade and import restrictions. The current recession seems to affect socio political structures, Nigeria’s credit condition general living standards, imports, production and employment as well as consumption demand in Nigeria (Agri, Maliafia and Umejiaku, 2017). The economy lost over 500,000 jobs, power supply down from the grid, down to 2,2023.3MW from 3593MW, unemployment and underemployment now up 31.2 percent, labour productivity growth down to (-0.4 percent) , stagnant wages and decline in retail sales. Macroeconomic indicators get worse by the day, showing that, if there is no appropriate intervention by the government, the economy may slip further into depression.
1.2 STATEMENT OF THEPROBLEM
The present economic recession in Nigeria is a manifestation of long-term ills in the structure of the economy that became full-blown under the present government. The recession seems to affect socio-political structures, Nigeria’s credit condition, general living standard, imports, production and employment as well as consumption demand in Nigeria. 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. The prime topics of discussions at bus stops, beer parlours, sports arena, country clubs etc. are issues such as inflation, falling wages and inability of governments to pay salaries, rising taxes, rising cost of petrol. Whilst some may state that there is nothing new in the obvious negative public perception of the economy. The study therefore aimed to find out the impact of recession on the Nigerian populace.
1.3 OBJECTIVES OF THE STUDY
The main objective of this study were to examine the impact of recession on the Nigerian populace. The specific objective tends to;
- i) To investigate empirically the relationship between inflation and the Nigerian populace.
- ii) To assess the impact of recession on the citizens and residents of Edo State.
iii) To examine the impact of economic recession on socio-economic in Southern, Nigeria.
- iv) To proffer solutions on how to revamp recessed economy in Southern, Nigeria.
1.4 RESEARCH QUESTION
The following research questions will guide the study;
1. Does recession have a significance impact on the Nigerian populace?
- Does the current recession have any positive effect on the lives and wellbeing of Nigerians?
- Are there effect of recession on the monetary sector of the Nigerian economy?
- To what extent does recession affect socio-economic in Southern, Nigeria?
- How would economic be recovered in Southern, Nigeria?
1.5 RESEARCH HYPOTHESIS
H0: the current recession have not affected the lives and wellbeing of Nigerians
H1: the current recession have affected the lives and wellbeing of Nigerians
H0: there is no solution to the Nigerian economic recession.
H2: there are solutions to the Nigerian economic recession.
1.6 SIGNIFICANCE OF THE STUDY
The research will give the general public an insight to the factors responsible for the persistent rise in the price of goods and services produced in the economy since the reoccurrence of recession. It will provide appropriate recommendations on the ways, of eliminating inflation or reducing it, so as to empower the economy for self-sustained development capable of enhancing the economic wellbeing of a greater number of populations. It will also equip the policy makers with adequate tools in formulating the right policy. It will serve as a reference point to future researchers willing to embark on any topic related to recession.
1.7 SCOPE AND LIMITATION OF THE STUDY
The study on the impact of recession on the Nigerian populace covers a wider population as it involves a whole state, but in the course of retrieving valid data the researcher centers on the Federal University of Benin (UNIBEN), Edo State.
In carrying out the investigation sources of data posed a problem of its own. It is difficult to lay hands on up to data statistical data for empirical analysis especially in developing countries such as Nigeria. In any case one had to make the best use of what was available.
Resulting from the short time limit couple with the financial constraints, the researcher was limited to primary and secondary sources.
Generally the researcher suffers frustration owing to administrative logistics. Below are some of the identifiable limitations.
Unpublished data were rarely made available to researcher by head of departments who avoid violation of the official secrecy act.
Secondary data on the subject was stale and scanty in most of the libraries visited including the school and state library.
1.8 DEFEINITION OF TERMS
Recession: In economics, a recession is a business cycle contraction which results in a general slowdown in economic activity.
Populace: the people living in a particular country or area.
Inflation: In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.
Unemployment: Unemployment is the situation of actively looking for employment but not being currently employed. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage.
Import: An import is a good brought into a jurisdiction, especially across a national border, from an external source. The party bringing in the good is called an importer. An import in the receiving country is an export from the sending country.
Household Income: Household income is a measure of the combined incomes of all people sharing a particular householder place of residence. It includes every form of income, e.g., salaries and wages, retirement income, near cash government transfers like food stamps, and investment gains.
Poverty rate: The poverty rate is the ratio of the number of people (in a given age group) whose income falls below the poverty line; taken as half the median household income of the total population.
Economy: The economy is defined as a social domain that emphasizes the practices, discourses, and material expressions associated with the production, use, and management of resources.
Economic Recover: An economic recovery is a period of increasing business activity signaling the end of a recession. Much like a recession, an economic recovery is not always easy to recognize until at least several months after it has begun.
1.9 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 highlights the theoretical framework on which the study is 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 recommendations made of the study.
THIS MATERIAL GOES FOR #3,000 ONLY.