By: Bello AbdulRauf Aremu (Rufy B)
First of all, I would like to assert that I am not a pro-Buhari or an anti- Jonathan, neither am I a PDP nor an APC member. Also, the content of this write-up is strictly based on my personal opinion and also based on the information available to me.
The tenets of this article is, to give detailed analysis of recession really mean and how we got to this stage.
It should be noted that the current economic distress Nigeria is faced with is not new. There had been downturn in economic activity in the past notably in the late 80s and during the global economic meltdown in 2008. But this current economic situation is the worst in
several years.
In the course of the analysis, I would try my best to use simple terms that a layman can easily understand. The aim of this article is to have a profound understanding of the phenomenon (i.e. economic recession).
With reference to ‘Investopedia’, economic recession is a ‘significant decline’ in activity across the economy, lasting longer than a few months. The technical indicator of a recession is two consecutive quarters of negative growth as measured by a country’s GDP.
• The gross domestic product (GDP) is one of the primary and most commonly used indicators used to gauge the health of a country’s economy. It represents the total value of all goods and services produced in a country over a specific period of time; you can think of it as size of the economy.
• The calendar year can be divided into four quarters, often abbreviated as Q1, Q2, Q3 and Q4.
First Quarter, Q1: 1 January – 31 March.
Second Quarter, Q2: 1 April – 30 June.
Third Quarter, Q3: 1 July – 30 September.
Fourth Quarter, Q4: 1 October – 31 December.
In the first quarter of 2016 (i.e. Q1:2016), the Nigerian GDP in real terms recorded a growth decline of 0.36% and further negative growth of 2.06% in the second quarter.
Though, even without the statistics, Nigerians have been experiencing untold hardship due to low income coupled with unbearable high cost of commodities; but with the statistics, it is official that the Nigerian economy is in recession(as two consecutive quarters recorded negative growth of 0.36% and 2.06% respectively).
The question is ‘how did we get here’? Did President Buhari destroy everything? Is Jonathan to be blamed? Are the ministers responsible? Or are Nigerians culpable for this recent development?
After independence, the Nigerian economy seemed very promising. Many saw Nigeria, with 25% of Africa’s population, as an emerging country. Nigeria is a well-endowed country with abundant mineral and human resources. Before the discovery of crude oil, Nigeria was a major exporter of Agricultural commodities ranging from cassava, cocoa, groundnut, millet, corn, palm oil, peanuts, rubber, rice sorghum, yam etc. Nigeria exported these commodities in large quantity, in which each region (there were no states then, Nigeria was divided into three main regions namely Northern region, Western region and Eastern region) was peculiar to a particular commodity.
The Northern region was mainly concentrated on groundnut; we had a very huge groundnut pyramid in Kano then. Other commodities produced in the Northern region include kolanut, hides and skin used in the production of leather shoes and belts, cottons for textile industries etc.
The Western region was mainly known for cocoa production. Even till today, it is the leading agricultural export of the country. The crop was a major foreign exchange earner for Nigeria in the 1950s and 1960s and in 1970, the country was the second largest producer of cocoa in the world but following investments in the oil sector in the 1970s and 1980s, Nigeria's share of world output declined. Cocoa is used to produce food items such as Milo, Bournvita, chocolates etc. It was from the proceeds of cocoa exportation that the then premier of western region, Chief Obafemi Awolowo used to facilitate numerous projects and programmes which include free education, free primary healthcare among others.
The Eastern region was specialized in palm oil, palm wine production, tin production, rubber production etc.
Each region was independent; there was competition as to which region was more developed. With late Sir Ahmadu Bello in the North, late Chief Obafemi Awolowo in the West, late Dr. Nnamdi Azikiwe in the East, all had to contest against one another and it was really good for economic development. With exportation of the commodities produced then, there was a very large output thereby leading to higher revenue for the government, low unemployment and food security. All these made the Nigerian economy to be really strong. Just 10 years after independence, Nigerian economy showed serious signs to be one of the world’s top 20 strongest economy.
We must have heard on several occasions that there was a time when a dollar was equivalent to a naira (i.e. $1 = N1), as against $1 = N402 that we have today. In fact, as at 1973, £1 = N0.72 (i.e. your N2 is £3). That’s how very strong the Nigerian economy was.
However, the story changed after the discovery of oil………………………………
What happened after the crude oil was discovered? Watch out for the next part………..
No comments:
Post a Comment