THE IMPACT OF ECONOMIC RECESSION ON THE NIGERIAN POPULACE (1980-2016)

ABSTRACT
This study investigates the impact of economic recession on the Nigerian populace. Secondary data were used in this study, the data were collected from CBN statistical bulletin also data were also gathered from journals and textbook that are related to the research topic. The overall significance of the regression is tested using Fisher’s statistics. In this study the calculated F* value of 0.629415 is significant at 69%. The result however, show that linear relationship exist between the dependent and the independent variables of the model. The evidence established that the independent explanatory variables have individual and combine impact of economic recession and populace in Nigeria. There is significant relationship between economic recession and populace in Nigeria. The finding of this study was from the test of the formulated hypothesis which the result has it that economic recession have statistically significant impact on the Nigerian populace. How recession impacts on socioeconomic and political lives in Nigeria, and should be studied to find the root causes and proffer solutions for sustainable economic development. It recommends that Nigeria needs positive economic change that is caused by structural and fiscal reforms. Nigeria should strive to diversify the economy, be self-reliance and corruption-free, eat what she produces, and mostly use what she makes. The paper concludes that Nigeria can get out of the recession.

BACKGROUND TO THE STUDY
Recently in Nigeria, the CBN and the Finance Minister have told Nigerians that the nation is in an economic recession, it is very important that the impact of this recession on the Nigerian populace is well understood. The causes can be well understood if the definition of an economic recession is revisited. An Economic 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 Products, real income, employment, industrial production, and wholesale-retail sales.(US National Bureau of Economic Research).
Generally in economics, a recession is a negative economic growth for two consecutive quarters. It is also a business cycle contraction which results in a general slowdown in economic activity (Merriam-Webster Online Dictionary, 2008). Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise.

Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock or the bursting of an economic bubble. Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation.
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 researcher, Koo (2009) wrote that under ideal conditions, a country’s economy should have the household sector as net savers and the corporate sector as net borrowers, with the government budget nearly balanced and net exports near zero. When these relationships become imbalanced, recession can develop within the country or create pressure for recession in another country (Koo, 2012). Policy responses are often designed to drive the economy back towards this ideal state of balance.
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 (Shiskin, 2004). As an informal shorthand, economists sometimes refer to different recession shapes, such as V-shaped, U-shaped, L-shaped and W-shaped recessions.

Unemployment is particularly high during a recession. Many economists working within the neoclassical paradigm argue that there is a natural rate of unemployment which, when subtracted from the actual rate of unemployment, can be used to calculate the negative GDP gap during a recession. In other words, unemployment never reaches 0 percent, and thus is not a negative indicator of the health of an economy unless above the “natural rate,” in which case it corresponds directly to a loss in gross domestic product, or GDP.
The full impact of a recession on employment may not be felt for several quarters. Research in Britain shows that low-skilled, low-educated workers and the young are most vulnerable to unemployment in a downturn. After recessions in Britain in the 1980s and 1990s, it took five years for unemployment to fall back to its original levels (Vaitilingam, 2009). Many companies often expect employment discrimination claims to rise during a recession (Rampell, 2011).

1.2 STATEMENT OF THE PROBLEM
Nigeria has been an economically slavish neocolonial state.
The present economic recession in Nigeria is a manifestation of long-term ills in the structure of the economy that became full-blown under the present government. The recession seems to affect socio-political structures, Nigeria’s credit condition, general living standard, imports, production and employment as well as consumption demand in Nigeria. Fast developing economies like China, India, Brazil, including Vietnam and Thailand depend on exports to drive their economies.

Nigeria cannot afford to do otherwise. 80 percent of Nigerians still lack access to electricity, decent housing, portable water and good healthcare. This figure is growing as a result of increasing unemployment caused by the recession. For many years, the importation of petroleum products covers 30 percent of Nigeria’s GDP, importation of toothpick, rice, fish, cassava starch, sugar and processed tomatoes take 20 percent; importation of garments and fabrics 15 percent, importation of cars and electronics 20 percent; resulting to sky-rockets inflation of 17.8 percent in 2016.The demand for foreign exchange and imports (including imports of petroleum products) remained high in the face of dwindling oil revenue. Nigeria is faced with the twin problems of reduced volume of exports and reduced price of crude, resulting to reduced revenue. The implications are that the federal and state budgets cannot be funded adequately resulting to external borrowing and debt financing. These have negative implications on foreign exchange and imports of raw materials, low absorptive capacity, job losses, increased tax evasion and avoidance, low purchasing power, low standard of living caused by economic recession. The question is that why the performance of the Nigerian economy always should be determined by industrialized external powers, if not for the internal structural deficiencies working against selfreliance?

The Nigerian economy is now in the intensive care unit where America and Thailand’s agribusinesses have collapsed Nigeria’s agriculture, China’s garments and fabrics business has collapsed Nigeria’s textile industries, Japan and Germany’s automobile businesses have collapsed Nigeria’s Ajaokuta steel company.