THE IMPACT OF GLOBAL FINANCIAL CRISIS IN NIGERIAN ECONOMY


      The global financial crisis has taken the whole word, this is like an epidemic disturbance that discourages countries to invest from their business or to delay their plans in infrastructure, government project, basic necessity expenses and things such as these has become the effect of such crisis. There is also decline in tourism, import and export are weakening, private and public sectors geared to decrease their income expectedly and mostly Gross Domestic Products of most countries are unstable.


      The global financial crisis has also been the result of most company shut down and retrenchment of employees; it is also causes desperate allocation of budget and deficit. Countries have also found a need to borrow money from World Bank and International Monetary Fund. The banking sector and currency trading has been highly affected entirely around the world and up to the present times the economy has been experiencing a sudden impact of such crisis. Some countries have declared recession because of this crisis some countries who suffered more from natural calamity including typhoon, tsunami and natural phenomenon has made it more severe to lose their momentum in international trade and mostly their stocks.     


      The truth is that the impact of global financial crisis in Nigeria is evident and highly foreseen in their economic situation this has become contagious in their socio-economic development and their ability in recovery. The crisis in Nigeria and downfall in their economy as shown in 2007 is way down low from previous years of their country’s Gross Domestic Product (GDP) their GDP in 2003 was 9.07% that surge way down to 6.22 in 2007 alone. But they have somehow recovered in their non oil products that they have a record high GDP of 3.44% from 2003 to 6.99% in 2007 but this is just a small part of their production.


      The Manufacturing sectors shows a 3.1% decrease in production that has an estimated rate of 52.6% in 2007 has shown only 48.6% in 2008 and this has been because of lack of funds in export materials, low electrical power production, diesel export price imbalance increase and decrease while some companies even down sized their employees. In External trade and Financial outcome has been largely affected because of various factors including export diversification and direct investment, inflation rate and the government budget deficit.


      One of the most disadvantages that has become a factor in low trading system is the price changes imbalance of crude oil that prevented some of their production companies to generate more that comprises largely of more or less 80%o their foreign trade and earning. The direct impact of external trade affected mainly is their banking sector who received largely foreign remittance during those fiscal years. Their overseas labor force from other countries from around the world shows a stable remittance last 2006 but shows a more reliable outcome last 2007 that continues to soar in the mid of 2008 but falls back on the last 2008.


      One of the most highly affected areas of their government is their national budget last 2009 that has a deficit of 1.09 trillion that shows a very unsustainable remarks during those years that they will need to sort out some ideas to meet their needs by taxation and accrual extension from sales of some privatized companies, added to it is the unspent allocated budget from the previous years. Although there are confusion and distribution about graft and corruption that may occur that they need to make sure the distribution of funds will go through to its real cost. The National debt also increases during the year of 2006 to 2008 from .3 Million US dollar of 2006 rises up to .2 Million US dollar in 2007 up to .3 Million US dollars in 2008 that usually varies up to the present time because of crude oil price and production in International trade.


      Their Agriculture sector is not much affected mostly that comprises a large scale in their industry in fact it even shows a remarkable improvement and all the agricultural sectors have been largely contributing to this potential of growth. This is in response to the countries low production that they have recovered and increased in this sector they have released 53,610 tons of grains by the month of March to May of 2008 and that was a good production compared to the previous years as recorded by National Strategic Grain Reserves (NSGR). The production of their livestock and aquatic foods also grows including their staple food like maize, yams, meat, fruits and vegetables of 2008 compared to the previous years.


      In their present situation there are so much sectors that needs various consideration including household income or employment, social health and more before they can say that they can fully recovered but as long as they are committed to their economic condition to implement such great given plans and government policy or renewal perspective and nationwide development, they can highly survive and hopefully recovered from the crisis in their economy.       


 



Credit:ivythesis.typepad.com


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