Receeding Recession

At last, Nigeria is out of recession. Don't say amen, it's a statement of fact and not a prayer of faith. Nigeria has been out of recession since July 2017 according to Data published by the National Bureau of Statistics(NBS)which shows that the economy grew by 0.55% in the last quarter of the year in review. This information shouldn't be difficult for those who studied economic as a science, but for those of us who laboured through economics class as a social science, I hope this piece will aid our comprehension of it.


To the National Bureau of Economic Research (NBER), a recession is defined as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production and wholesale-retail sales".


Simply and beyond the fancy words, recession is the increasing price of foodstuff and other commodities, without a corresponding increase in pay. If you already know inflation, then you must be familiar with recession because they are first cousins. So, in a recession, businesses cease to expand, the GDP diminishes for two consecutive quarters, the rate of unemployment rises and housing prices decline. If these factors are still noticeable in our economy, then be wary of official reports.


There are text books factors for recession: inflation, deregulation, drop in GDP, deflation, rising unemployment, assets bubbles and so much more. But, we need not worry about all those because they are not directly responsible for our recession, and so, they are suspects that can be released on bail. Instead,horrendous leadership and gullible followership are to be held accountable for Nigeria economic recession.


Since the time of Babangida, the economy of the country has defied all logic and it will take the insane to take it back. The low prices of oil, the volatile state of oil production in Nigeria, bad debts gathered over time and corruption has led to lower purchasing power and foreign exchange scarcity.  We need to be more demanding on our leaders in not just accountability, but also in terms of policy formulations and executions.


It may be immediately dangerous to want to cut back heavily on spending both at macro and micro level, but the truth of the matter is that if exuberance spending is not curtailed, we may have a prolonged recession period that will germinate into depression. That is if we have not moved into a state of economic depression already. Between recession and depression,time is the defining factor.


While at it, you may want to adopt South Africa’s quick fix  approach to ending their own recession not just on papers but also in real life by doing the following: This would be the worst time to take a loan, invest in a risky business expenditure, or buy a new car or acquire a new wife. This may also be the wrong time to stand surety for someone.


Austerity measures didn't work the last time we practiced it because according to John Maynard Keynes  "The boom, not the slump, is the right time for austerity at the Treasury." In other words, there is absolutely no point in buying what you don't need to impress people you don't like. Spend responsibly.