By Afe Babalola
A recession has many attributes that can occur simultaneously and includes declines in component measures of economic activity (GDP) such as consumption, investment, government spending, and net export activity.
These summary measures reflect underlying drivers such as employment levels and skills, household savings rates, corporate investment decisions, interest rates, demographics, and government policies. A severe (GDP down by 10%) or prolonged (three or four years) recession is referred to as an economic depression, although some argue that their causes and cures can be different. As an informal shorthand, economists sometimes refer to different recession shapes, such as V-shaped, U-shaped, L-shaped and W-shaped recessions”
Economic crisis in history
The first recorded economic crisis occurred in the 3rdCentury when the Roman Empire faced collapsed as a result of pressure brought upon by invasion, civil war, plague and economic depression. It is reported that the Roman Empire as a result of the crisis split into three comprising of the Gallic Empire, Palmyrene Empire and an independent Roman Empire. Further down in time, further economic crises were recorded in the 14th, 17th, 18th, 19th, 20th and of late the 21st Century.
Of the crises stated above, the 1930 economic crisis which affected a number of countries including the United States and which is often referred to as the Great Depression is perhaps the most serious in recorded history. The crisis began with the fall in stock prices in the United States on 4th September, 1929 and culminated in a world-wide stock market crash on October 29th, 1929, a day still referred to as Black Tuesday. Many cities around the world were affected by this crisis and millions were plunged into poverty overnight. The effect of this crisis lasted until after the end of World War II.
In recent times, even countries regarded as developed also faced one economic crisis or the other. Between 1999 to 2001, the United States experienced what is regarded as the dot-com-bubble in which several internet based companies experienced a catastrophic crash in their stock prices leading to a loss of investment by many who had come to see the rise of such companies as a sure means of financial security.
The shares of ebay.com for example dropped from $107 to $7 per share. In 2014, Russia also began to experience a financial crisis brought upon by International Sanctions imposed on the country as a result of its annexation of Crimea and the recent decline in the price of oil. It is estimated that Russian loses billions of dollars for every singular drop in the price of oil.
Promising country at Independence
At independence, Nigeria was regarded as one of the countries, along with the likes of India and Brazil that would in time become world economic giants. However while Brazil and India have largely fulfilled their potential or at least are on the verge of doing so, Nigeria is still struggling with issues which with proper planning and adequate leadership should have been consigned to the past.
Without a doubt Nigeria did indeed and arguably still possesses attributes upon which the assessment of future viability and greatness was made. Nigeria is blessed with immense natural resources other than oil which if properly harnessed would be sufficient to generate the much needed funding for the development of the country.