GLOBAL RECESSION AND THE NIGERIAN ECONOMY - an article by Chinedu Vincent Akuta!

The challenges and task of managing this record breaking global recession has not been easy at all. The Western nations appear to be running out of ideas on how to jump start their economies. Countries of the Organisation for Economic Co-operation and Development (OECD) have committed more than $3.5 trillion dollars to help their banks rebuild their asset base and kick start lending again. The responses from these huge government bailouts have been disappointing. The world has never witnessed a recession of this magnitude. Warren Buffett (the richest person in the world during the first half of 2008 according to Forbes) described the current crisis as an economic “Pearl Harbour” He predicted that the US economy will be in shambles throughout 2009. Quoting Skynews, the world’s richest people have watched nearly a quarter of their wealth go in the last 12 months.

“In a February video message to his millions of supporters, US President Barack Obama told them that US had lost 3.6 million jobs since the recession began. But this is dwarfed by the worries of the International Labour Organization (ILO) which predicted in its annual publication, Global Employment Trends, that eighteen to fifty million workers will lose their jobs this year alone and two hundred million are likely to be thrown into extreme poverty” (The World Today, March 2009, Volume 65 Number 3 Page 5).

The survey carried out by the Indian Labour Ministry indicated that about 500,000 people have lost their jobs in just three months in 11 sectors of the economy. The Federation of Indian Export Industries have raised alarm that 10 million jobs are likely to be lost in the months ahead. China has also lost similar jobs and about 68,000 factories had closed in their coastal provinces as at mid October 2008.

The case of Japan appears to be worse than that of the United States and the European Union. Japan has suffered an immense economic recession due mainly to her high exposure to the slump in global car manufacturing, electronics, and investment equipment. “Russia has been hit hard by the global crisis, with the stock market down almost 80% from its peak, and the rouble sliding fast. Russia’s top 10 billionaires alone lost an estimated $150 billion last year” (The Guardian newspapers of UK, Tuesday 3 March 2009, page 15).

In the UK, a job will be lost every 25 seconds. Experts have also warned that about 320,000 jobs will be lost in the next three months as the recession hits harder. I wrote extensively on the global economic crisis which I titled; Capturing The Casualties From The Global Credit Crunches. (Published on Sunday, 14th December 2008 on http://briefsfromakuta.blogspot.com/). The global economy has deteriorated more, since my article was first published.

“The International Monetary Fund has identified 26 countries, half in sub-Sahara Africa, that are particularly vulnerable to the crisis. Central and Eastern European economies are estimated to face a financing gap of $100 billion in 2009. And the World Bank estimates that 129 developing countries are facing a financing shortfall of between $270 and $700bn” (The Guardian newspapers of UK, Tuesday 10 March 2009, page 31).

Since the world is a global village, Nigeria cannot escape from the global recession. Nigeria will be affected in some many ways. This is because Nigeria has needs to be met by the international community. There will be decreases in oil revenue owning to the problems in the Western economies. We will be affected mostly by the global withdrawal of credit. Foreign loans and international developmental assistance will surely reduce. International donors to Non governmental Organisations (NGO’s) and charity organization like Red Cross etc will shrink. Nigerian banks are most likely going to find it difficult to source foreign loans from their overseas partner banks. There would be decreases in money remitted from Nigerians in Diaspora. Nigerians in Diaspora remit home more than $5 million dollars each year. This is used for various projects at home. This amount will most likely go down.

The unemployment situation in Nigeria will be worsened by the above factors. I will agree with the Nigerian Finance Minister of state, Mr Remi Babalola who advised state governments in Nigeria to be prudent with their resources and look beyond the federation account for funds to execute their programmes. His advise was reported by the Guardian newspaper of Friday March 6 2009 online version. But I seriously doubt if the federal, state and local governments in Nigeria can ever be prudent since there is still high level corruption in all tiers of government. Besides we still have the official secret act. No transparency on the part of government businesses and no credibility. Nigerians do not have access to government documents. No freedom of information act. Therefore the question of prudence will be difficult to achieve. With the above factors, Nigerians should embrace themselves for the worse case scenarios arising from the global recession.

Having said the above, I will ask the government both at the federal and state levels to make some policy changes in our educational sector. The change am propounding is to make skills acquisition a compulsory subject/course in the primary, secondary, tertiary and university levels. If English Language, mathematics, and Gss courses are compulsory in secondary schools and universities, then I see no reason why skills acquisition should not be made compulsory. The idea will be to produce graduates with skills. Skilled people don’t need to search for jobs like unskilled people. Low level job creation is needed to reduce unemployment in Nigeria. Job creation is highly needed this period of global economic recession.

I will also wish to appeal to private educational operators to make skills acquisition a compulsory part of their academic curricular. With measures like this in place, schools in Nigerian will be graduating people with both academic qualifications and skills. Finally I will also appeal to the unemployed people to consider volunteering where they can acquire skill know how. This appeal also extends to various skilled people, workshop owners etc to train the unemployed people who cannot afford to pay for the cost of training. Let there be elements of humanitarian assistance in combating unemployment in Nigeria. We need jobs creation to combat the global economic down turn. May God bless Nigeria.

The author Mr. Chinedu Vincent Akuta is an activist and leader of “Support Option A4 Group” Leicester-UK and can be reached via akutachinedu@yahoo.com