Chapter Three Surviving The Present Economic Situation in Nigeria: The Role of The University and The Alumni

FESTCHRIFT IN HONOUR OF PROF PITA NWABUEZE EJIOFOR 47
Chapter Three
SURVIVING THE PRESENT ECONOMIC SITUATION IN

NIGERIA: THE ROLE OF THE UNIVERSITY AND THE ALUMNI
By
EMMA I. OKOYE, PhD

Nnamdi Azikiwe University, Awka
1.0 INTRODUCTION
Nigeria is believed to be Africa’s largest economy; but the fact that most
Nigerians languish in absolute poverty and her youths (most of whom are
graduates) have remained unemployed is a serious source of worry to the elites.
In fact, the process of transformation in Nigeria according to Ayokhai & Naankiel
(2016) is ridden with crisis. This ranges from social crisis to political crisis,
economic crisis and the likes.
While we note that the economic transformation process in the country has been
marked by little steps of progress and numerous setbacks since independence
(1960), it is pertinent to mention also that prior to mid 2015, inflation and
exchange rate policies in the country have been rather consistent for a relatively
and reasonable number of years. For instance, inflation rate was maintained at
an average of 16% between 2005 – 2010, and was considerably reduced to a single
digit of about 8% between 2013 – mid 2015.
During the administration of Goodluck Jonathan, Nigeria’s economy was said to

have grown, thus overtaking South Africa’s economy, to become the largest
economy in Africa, but with a dramatic crumple in the world oil price around the
end of 2014 and the beginning of 2015, improvements in Nigeria’s economy was
threatened.
Despite the level of insurgency in the northeast and the sectarian violence in the
eastern Middle Belt, Nigeria still experienced an unprecedented economic boom,
particularly in the south between 2005 -2014. Under the government of
Obasanjo, Nigeria was able to settle a reasonable amount of her huge debts with
the Paris and London Clubs. Notwithstanding, real progress in few deregulated
fields like the telecommunications, financial services, retail, education and
religion could not compensate for the pitiable state of the power sector and
refineries that still suffer from structural neglect, incompetence and high
powered corruption.
The Yar’Adua and Jonathan administrations were seen to have managed the
situation by complementing efforts of past administrations with regards to
economic policies and the management of the economy. Nevertheless, both
regimes were believed to have witnessed high level cases of fraud and corruption
that were swept under the carpets. With the coming of a new government,
expectations were on top gear as President Buhari, a one-time military Head of
State had vowed to re-position the country’s economy especially with his fight
against corruption. Today, Nigeria’s economy is believed to be experiencing a
downturn; a situation that Economists best describe as “economic recession” and
this has become Nigeria’s real challenge of the moment.
What is Economic Recession?

Economic recessions are believed to be part and parcel of any capitalist market
development. The Encarta world English dictionary defines economic recession
as a negative economic growth for two consecutive quarters. It can also be
referred to as a contraction in the business cycle occasioned by a general
slowdown in economic activity of any given country or jurisdiction.Usually,
economic recession is characterized by negative growth in macroeconomic
indicators like Gross Domestic Product (GDP), household income, business
profits, investment spending, capacity utilization. In periods of recession, the
level of bankruptcies, inflation and unemployment rates tend to be on the
increase.
According to IMF (2009), economic recession is a decline in annual per-capita

real GDP (purchasing power parity weighted), backed up by a decline or
worsening situation for one or more of seven macroeconomic indicators which
include industrial production, trade, capital flows, oil consumption,
unemployment rate, per-capita investment, and per-capita consumption.
Recessions generally occur when there is a widespread drop in spending (an

adverse demand shock). This may be triggered by events like financial crises,
external trade shocks, adverse supply shocks or the bursting of an economic

bubble.
Rutherford (2002) defined recession as:
1 A phase of the business cycle which succeeds a boom and
precedes a trough.
2 A six-month fall in GROSS DOMESTIC PRODUCT according
to the NATIONAL BUREAU OF ECONOMIC RESEARCH of
Washington, DC. The principal indicators of this are falling
output and rising UNEMPLOYMENT.
Causes of Economic Recession

Financial crises have become a regular feature in the economies of nations all
through economic history. Despite the fact that variations in the pattern and
magnitude of financial crisis exist, the underlying mélange of attributes and
circumstances usually, are similar. Beginning from what happened prior to and
during the Great Depression of 1929, down to the Asian Financial Crisis in 1998
and of course the Global Recession in 2008, a careful analysis would reveal that
the major issues that spark off financial crisis are related, but not limited to
failure in the area of meeting up with the demands of sovereign debt obligations,
rapidly deteriorating currency, and a partial or near collapse of the financial
service/banking sector. Most times, the fault lines exist long beforehand and the
seeds are typically planted long in advance such that both the fault lines and the
evil seeds of recession remain largely undetected until the crisis is analysed in
retrospect.
The present scenario where we find our dear country, Nigeria, could be traced
back to Nigeria’s humble beginnings. This is because, right from 1999, the
government of the country has predominantly and continuously relied majorly
on only one source of income (oil) to fund her fiscal budget. This is according to
scholars amounts to recklessness on the part of successive governments. This
recklessness on the part of government as regards to decision (or indecision) has
various implications. This is the sole reason why we are where we are, as a
country today.
Notably, the occurrence of recession in an economy usually result from a

combination of several exogenous and endogenous factors. Endogenous factors
in this case include:
 Poorly considered economic policy (fiscal, monetary, and exchange rate),
 Low investment and low capital accumulation
 Massive depreciation of the exchange rate resulting from drop in the value of
local currency against the US. Dollars
 Pervasive corruption of the rulling class
 Downturn in the country’s earning
 Output and Job losses
 High inflation rates
 High cost of borrowing and poor infrastructure.
 Sharp drop in the crude oil price on the world market and
 Slowdown in inflow of Foreign Direct Investment (FDI)
 Negative Growth in GDP in 2 Consecutive Quarters
 Macroeconomic uncertainty
The following additional factors could therefore be responsible for the present
situation in Nigeria:
 Structural imbalance (mono economy instead of diversified

economy– oil sector… neglect of other sectors like the agricultural,
manufacturing, etc sectors)
 Infrastructural decay (power deficiency, roads,
 Educational deterioration (the system is not geared towards job
creation but towards white collar jobs, instead of creating jobs, graduates
now search for jobs)
 High level of job loss/ unemployment
 Decline in growth
 Forex fluctuation
 High inflation (persistent rise in price of every other thing but income
(salary)
 Over-dependence on importation
 Government policy inconsistency
Is Nigeria Experiencing Recession?
Nigeria’s economy is presumed to be in recession. This is because the naira has

fallen over 50% within the last one year. Oil revenue, which happens to be the
mainstay of Nigeria’s foreign earning, is at its lowest in the last two decades.
Evidently, Nigeria is facing the worst of times, as major economic indices are on
a downward spiral thereby inflicting untold hardship on her citizenry.
Table 1: Table Showing Data For Selected Economic Indices in 2015

Economic Indicators Q1. 2015 Q2. 2015 Q3. 2015 Q4. 2015
Oil Markets
Spot Price (Avg. $pb) 55.93 61.69 48.56 47
Production (m' bpd) 1.87 1.9 1.86 1.9
Money Markets (End
Period)
MPR (% p.a.) 13 13 13 11
CPI (%) 8.5 9.2 9.3 (Aug) 9.3 (Oct)
External Reserves 29.79 29 30.37 29.75
($'bn)
Exchange Rate (End
Period)
Inter-Bank (N/$) 199.16 197.47 199.08 198.59
Parallel (N/$) 220 229 223.5 248
Others
Market Capitalization 10.72 11.42 10.73 9.57
(N'trn)
Source: BTI (2016), NBS (2015)

Table 2: Table Showing Data For Selected Economic Indices in
2012-2016(Q1)
2012 2013 2014 2015 2016
Economic Indicators (Q1)
Real GDP Growth @ Market Prices (%) 4.2 5.4 6.3 4.8 4.6
Fiscal Balance -1.4 -1.4 -1.4 -2.5 -2.2
Public Debt (% of GDP) 10.5 11.7 13.7 14.7
Source: BTI (2016), World Bank 2016
Real GDP
Growth
@
Market
Prices (%)
Fiscal
Balance
Public
Debt (%
of GDP)
Available data from the National Bureau of Statistics (NBS) reveal that the
economy is in recession since real output GDP recorded negative growth rates in
the first (-0.36%) and second (-2.06%) quarters of 2016. This is indicative of low
level of economic activity. Double digit inflation has characterized the economy
in recent times when it leapt from 9.4% in the fourth quarter of 2015 through 11.3
% in the first quarter of 2016 to 15.3% in the second quarter of 2016.
Unemployment rates during the fourth quarter of 2015 stood at 10.4%, while in
the first quarter of 2016, it rose to 12.1% and by the second quarter of 2016, it was
already 13.3%. Particularly worrisome is the coexistence of high inflation and

high unemployment rates. This suggests that Nigeria is undergoing stagflation
(Egwaikhide, 2016).
Economists postulate that once an economy exhibits two consecutive quarters of

negative growth, it is technically in a recession. With the statistics released by
the National Bureau of Statistics as cited in Ekpo (2016), there is evidence that
Nigeria is technically in recession since her GDP growth rate in two consecutive
quarters (the first and second quarters of 2016) was in the negative (that is -
0.36% and -2.3% respectively). This negative growth trajectory according to
Egwaikhide (2016) is evident in:
 the level of output losses,
 the level of job losses,
 high inflation leading to rising prices of foodstuffs and other goods and services,
occasioned by the hike in the prices of petroleum products,
 massive depreciation of the exchange rate;
 high cost of borrowing and poor infrastructure (power, roads, etc) to support the
productive base of the economy,
 high inflationary rate which ordinarily has resulted in high cost of living, an
indication of macroeconomic uncertainty.
The Nigerian economy has slipped into a recession following two successive
quarters of negative Gross Domestic Product (GDP) growth rates, according to
the National Bureau of Statistics (NBS) which released today the much-awaited
GDP data for quarter two of 2016.
“In the second quarter of 2016, the nation’s Gross Domestic Product (GDP)
declined by -2.06 percent (year-on-year) in real terms,” said the NBS. “This was
lower by 1.70 percentage points from the growth rate of 0.36 percent recorded in
the preceding quarter, and also lower by 4.41 percentage points from the growth
rate of 2.35 percent recorded in the corresponding quarter of 2015.”
Nigeria's GDP contracted by 0.36 per cent in the first quarter of 2016 due to the
impact of low oil prices which significantly reduced government revenue,
weakened the naira and increased inflationary pressures.
Oil sector real GDP contracted by 17.48 per cent YoY, its worst outcome since the
rebasing of Nigeria's GDP in 2014, compared to -1.89 per cent in Q1 2016. Non-oil
sector real GDP contracted by 0.38 per cent in Q2 compared to GDP growth of
0.18 per cent in Q1. Agriculture sector GDP grew at 4.53 per cent in Q2, recording
better growth than 3.09 per cent in Q1 of this year, while Manufacturing sector
GDP improved to -3.36 per cent compared to -7.0 per cent in Q1 2016. The NBS
also reported that mining and quarrying sector declined by -17.19 per cent in Q2
compared to a contraction of 2.97 in Q1 2016.
"While the news of Nigeria entering a recession may be painful, this should be no
surprise as the incessant declines in oil prices have punished heavily oil export
nations with Nigeria being no exception," said Lukman Otunuga, Research
Analyst at FXTM.
Oil Production MBPD

2.18
2.50 2.17 2.16
2.00 2.05 2.11
1.69
1.50
1.00
0.50
Q1 Q2 Q3 Q4
Q1 Q2
2015 2016
Figure 2: Crude Oil Output (MBPD)

How Did We Get Here?:Background of Nigeria’s Economic Woes
Hitherto, the Nigerian economy, grew as a result of rising oil prices, however the
recent sharp drop in oil prices sent warning signals that the economy was on a
downward spiral, consequent upon the fact that the value of the local currency
(Naira) is dependent on the quantity of foreign exchange generated from crude
oil export. Based on the import dependent nature of Nigeria, we find that there
was inadequate foreign exchange to back up the Naira thus leading to its
depreciation. Currently, the demand for FOREX seems to exceed the supply as
reflected by large misalignment between interbank rate and that of the parallel
market.
The worrisome economic outlook of Nigeria has in recent times sparked up a lot
of debates from the academia, industry government and economic stakeholders.
Major concern is on the fastest method to recover from Nigeria’s economic woes.
Interestingly, some of the laughable recommended policy options believed to be
able to fast track recovery included the sale of national assets, fiscal stimulus,
agricultural transformation, lowering of interest rates, depreciation or
devaluation of the naira.
At this juncture, it must be pointed that the naira-dollar exchange rate as noted
by Fabiyi (2016) is not some arbitrary number determined by bankers or
governments or by diabolical traders in dingy rooms, or by “greedy” Bureau de
Change (BDC) currency dealers. This assertion is due to the fact that the naira-
dollar exchange rate is usually a function of the laws of demand and supply
driven on the wheels of economic activities which must have been propelled by
such economic activities in the streets of Lagos, Kano, Port Harcourt, Onitsha,
Aba, Kaduna etc. Fabiyi (2016) believes that just as the price of bread could be
determined by the total number of loaves of bread baked (supply) and the total
number of people wishing to purchase and eat bread (demand), the dollar
exchange rate is fixed by the total amount of dollars available in the Nigerian
economy (supply) and the total amount of dollars requested for within Nigeria
(demand).
It is incontrovertibly true that Nigeria gets the bulk of her dollars from
four main sources –
 remittances from overseas-based Nigerians;

 earnings from non-oil exports;
 earnings from oil exports; and
 Foreign Direct Investment.
i. Price of Oil and Its Implication on Our Economy
To have a better glimpse of the present predicament that we find ourselves as a

nation, let us have a throw-back to the year 2013 when oil was $100 per barrel.
An analysis of the supply side of dollar earnings for Nigeria based on available
statistics (CBN, 2013; World Bank, 2015; and NBS, 2016), indicate that a total of
about $70 billion dollars came into Nigeria in 2013. This comprised $21 Billion
from remittances; $3 billion from non-oil exports; $40 billion from net petroleum
earnings; and about $6 billion from Foreign Direct Investments. Regarding the
figures for the demand side, we are made to understand that Nigeria’s official
imports came to about $54 billion in the same 2013. This in addition to the total
dollar demand in Nigeria which was approximately $60 billion per year plus the
figure for undocumented transactions (estimated at about $6 billion per year)
like:
 homes purchased overseas,

 school fees for students in overseas institutions,
 dollar demand for travel and vacations.
The implication of the little arithmetic above is that as at 2013, the difference
between the demand and supply of dollar was about $10 billion. This means that
we were supposed to have a healthy surplus of about $10 billion per year; an
amount that could have been saved as reserves.
Given that Nigeria was producing 2.3 million barrels of oil per day (where oil was
sold at $100 per barrel), one may wonder why in 2013, oil earnings for the country
stood at $40 billion rather than $84 billion per year (NBS, 2013). The reason for
this is well captured in the assertion of Fabiyi (2016) who opined that Nigeria
does not produce oil directly; rather, oil production in the country is done
through joint venture partners like ExxonMobil, Shell, Chevron, and AGIP whose
production cost per barrel stood at about $20. On this arrangement, profits are
usually shares between Nigeria and the oil majors in the ratio 60:40 after
production costs may have been deducted
Below is the simple computation:

$
Selling Price Per Barrel: 100
Less: Production cost 20
Gross Profit 80
Note:
The $80 is then split between Nigeria and the oil companies at the ratio
60:40. This is why at $100 per barrel; Nigeria gets about $48 per barrel
(which translates to about $40 billion per year).
With the drop in oil price to about $30/barrel or below, when we deduct
production cost of about $20/barrel, gross profit certainly will drop to about
$10/barrel. Since the standing arrangement is that Nigeria’s share is just 60% of
the total gross profit (ratio is 60:40) we are now left with about $6/barrel, which
will only translate to about $5 billion per year at 2.3million bpd.
The above simple arithmetic sums up the hub of our entire exchange rate
predicaments since what we have now is an excruciating dollar supply problem.
If you decide to repeat the simple arithmetic above on dollar supply, you will
notice the following:
 Remittances now is about $21 billion per year,

 FDI stood at about $6 billion per year,
 Non-oil exports is about $3 billion per year
 Oil based export earnings have now dropped from $40 billion per year to
$5 billion or below, per year.
Given the above analysis, you will agree with me that total dollar supply now
stood at $35 billion. This is of course half of what we were having in 2013 thus
making us as a country to be having a deficit of about $25 billion per year as
against the surplus dollars of about $10 billion per year [i.e. $35 billion (dollar
supply) minus $60 billion (dollar demand) per year]. The present scenario where
dollrs supply has dropped (over 50% drop) has made more naira to be seen
chasing fewer dollars.
In any given perfectly elastic market, the resulting effect is a corresponding

devaluation of the local curreny (Naira) – this is exactly what has happened.
From the N195/dollar, the rate has escalated to over N350/dollar.
ii. Balance of Payment Imbalance and Drop in The Value of The Naira
Balance of payments (BoP) refers to the total record of all economic transactions
between the residents of the country and the rest of the world in a particular
period (over a quarter of a year or more commonly over a year). Such economic
transactions are believed to be made by firms, individuals, and government
agencies and organizations. This means that for Nigeria, balance of payments
includes all visible and non-visible external transactions. It represents a
summation of Nigeria’s current demand and supply of the claims on foreign
currencies and of foreign claims on the naira.
Economic transactions in this regard include payments for the country’s exports
and imports of goods, services, financial capital, and financial transfers. It is
typically prepared such that all sources of funds for the country (e.g. exports or
the receipts of loans and investments) are recorded as positive or surplus items.
Outflows (e.g. imports or to invest in foreign countries) are recorded as negative
or deficit items.
When all components of the BOP accounts are included they must sum to zero
with no overall surplus or deficit. For example, if Nigeria is importing more than
it exports, its trade balance will be in deficit, but the shortfall will have to be
counterbalanced in other ways – such as by funds earned from its foreign
investments, by running down central bank reserves or by receiving loans from
other countries.
Rather than representing the dynamism and robustness of the nation’s economy,
the naira which is supposed to serve as the store of value has plunged by over
25% in the last 10 months. The consequence which includes revenue drop has
contributed to the difficulty experienced by state governments in meeting their
budgetary requirements since their balances from federal allocation have
reduced considerably. Despite the authorization of about $2.1 billion bailout for
state governments by President Muhammadu Buhari, economic history has
always proved that band aids does not have the capability of fixing bullet holes
and there are evidence of urgent structural concerns that are related to the cost
of governance which have not been addressed by the country.
The fact that the present weak state of the naira has substantially damaged the
private sector cannot be over emphasized. This is because most organisations in
sectors like power, oil & gas, manufacturing and real estate had before now,
borrowed huge sums of money with the hope of expanding their operations. To
make things worse, most of the borrowed funds are denominated in the US
dollars, thus making it much more difficult for borrowers to service the resulting
interest payments given their present revenue base in naira. The multiplier effect
of this is a sudden rise in the level of exchange rate risk; a problem that has been
compounded by the Naira’s inability to find stability. Although, given certain
circumstances, a weaker currency tend to be advantageous especially for
economies which strategies are tilted towards exportations, but this is not the
case for a country like Nigeria where our major export is oil whose price has
plunged. Apart from the calamity explained above, the falling and weak state of
the naira also have a very harsh corollary effect on the financial service sector of
the country (especially the banking sub-sector);yet this sector is believed to be
the conduit through which more devastating crises inflict economic havoc in any
country.
iii. Removal of Nigeria from the Emerging-Market Bond Indexes By JP

Morgan
Sometime in December, 2015, the CBN introduced several foreign-exchange

trading restrictions with the hope of stemming the drop of the naira amid
weaker oil prices. Following this action JPMorgan had to place Nigeria on index
watch around January, 2016 because according to them, the newly introduced
foreign-exchange measures made it much more difficult for foreign investors to

replicate the gauges.
Around the first quarter of 2016, the statement by the spokesman of JPMorgan
Chase & Co. (Patrick Burton) that Nigeria would be excluded from its local-
currency emerging-market bond indexes became an issue of concern to
economic analysts, yet, most Nigerians and even Government functionaries took
it with levity. Today, its impact on the economy is well pronounced. This is
because local-currency emerging-market bond index is tracked by more than
$200 billion of funds. Following the restrictions on foreign-exchange transactions
in Nigeria, investors became worried about the likely shortage of liquidity in the
country.
st
Recall that the 1 phase of Nigeria’s removal from the Government Bond Index-
nd
Emerging Markets (GBI-EM) occurred in the 2 quarter of 2016, and was
followed by a full exit around October, 2016
iv. Rising Inflation

Following the credit crunch that resulted from the global economic meltdown of
2008, virtually every economy across the Globe (Nigeria inclusive) experienced
record level inflation owing to the commodity price boom that characterized the
period. A report by the OECD reveal that even in major Economies, consumer
prices for energy were up 20.9% year-on–year. There were equally spates of
slashes in the interest rates of economies due to the crisis (IMF, 2008). This trend
however continued for most economies right from 2008/2009 to date, although
its effect in most of these economies may have been cushioned to some extent.
For Nigeria, the inflation rate has soared to the highest in almost four years in
March, thus pressurising the CBN to ease foreign-exchange controls whichy
effect is evidenced in the rise in the prices of food and fuel. According to NBS
(2016), by March 2016, inflation in Nigeria accelerated to about 12.8% on an
annualized basis, the highest since July 2012. In addition, food prices which was
about 11.4% in 2015 was said to have risen to 12.7%. This according to NBS (2016)
was driven by:
 increase in the prices of petroleum products,

 massive depreciation of the exchange rate,
 high cost of borrowing, and
 poor infrastructure to support the manufacturing sector of the economy.
On the flipside, the price of crude oil which happens to be the country’s cash cow
fell steeply to less than US $50 per barrel in 2015 and has remained
disappointingly low ever since. A direct off shoot of the oil price shock is the
decline in government revenue resulting in the inability of most sub national
governments to pay workers and pensioners’ entitlements and even contractors.
In Nigeria, government expenditure constitute a major component of aggregated
demand for goods and services and therefore a reduction in government
expenditure meant a decline in aggregate demand for goods and services thus
leading to a reduction in output.
v. Frenzy of Capital Flight

History seems to be repeating itself in Nigeria as the President, Gen.
Muhammadu Buhari (Rtd) has bluntly refused to listen to the calls from
Investors, Market Analysts and Economists to devalue the naira. Be that as it
may, foreign analysts are beginning to conclude that politics, rather than
economics will determine the immediate future of the naira.
While growth is on a downward trend, inflation continues to rise thereby making

investors to flee the country. Reports indicate that analysts in a Bloomberg
survey seem to be backing away as forecasts reveal that the country’s currency
will plummet further.In the current scenario, just like any given crisis, the fear
and loss of depositor confidence in a big bank usually leads to a frenzy of capital
flight. This is because depositors are very quick to remove their funds from banks
as the sentiment runs through the system that ‘one bad apple spoils the bunch’.
Sometimes, the panic comes from not knowing which particular apple is bad.
Inevitably, this leads to a credit crunch as banks recall loans and become more
unwilling to lend, as their balance sheets temporarily shrink.
The resulting effect of credit crunch is the creation of liquidity challenges

generally for businesses that rely heavily on debt as a source of fund. Where this
is the case, the economy may grind to a halt since businesses would be forced to
put their expansion plans on hold and this subsequently leads to recession. This
hysteria of capital flight will also be reflected in the capital markets as investors
dump their shares in banks and share prices begin a race to the bottom. Taken in
isolation, these factors are not particularly worrying but once viewed as a whole,
they offer an ominous warning for the Nigerian economy especially now that
fiscal deficit is on the increase (Kambou, 2016).
The Dutch Disease/Resource Curse.

In extant financial and development literature, there is an economic and
resource condition that is popularly called “the Dutch disease”. The disease stems
from a country’s over-dependence on rent income, such as from oil, for national
survival. This disease arises because the nation’s major source of revenue does
not derive from taxation on productive activities undertaken by its economically
active population, but by collecting a convenient income from sources into
which it invests little or nothing. However, the problem with this malaise is
beyond mere economics. Where wealth in natural resources combines with a
weak economy and poor governance in a nation, the disease turns into what is
called the “resource curse” - a wholesale destruction of economic, social and
political structures, including the undermining of a country’s institutional setup,
leading to poverty rather than development. Indeed, in some African countries,
oil rents have been financing civil wars rather than national development, and
Nigeria’s “experiences over the past 30 years surely make it the grand old man of
all the African countries that find themselves afflicted by the resource curse”
(Harneit-Sievers, 2004).
For us in Nigeria, we are also afflicted by a resource curse. The genesis of our
resource curse is that we have a class of nouveau riche, who are stupendously
wealthy, but whose wealth has not arisen from their productivity, sharp intellect
or entrepreneurial instincts. They possess oil blocks, international connections,
fat accounts denominated in dollars and pounds sterling - all rewards from their
paymasters for undermining the future and fortunes of their own people. In the
Book of Hebrews, the writer raised a warning for us today:
Watch out for the Esau Syndrome: trading away God’s lifelong gift
in order to satisfy a short-term appetite. You well know how Esau
latter regretted that impulsive act and wanted God’s blessing - but by
then it was too late, even though he sought it diligently with tears
(The Message, Heb. 12: 16, 17).
Whether we call it the resource curse or the Esau syndrome, our birthplace is
beset with a disease that threatens the foundations of decency and morality. As
we look around us today, we see a sad picture of desolation, destitution and
desperation. The walls of our Jerusalem are broken down, and the gates are
burned with fire; but there are no Nehemiahs! Baal worship has advanced with
impunity to the very door steps of God’s temple in our land; but we have
produced no Elijahs! The people of the land groan from their taskmasters, and
the land has become a land of bondage and wicked oppression; but there is no
Moses! Our young ones and generations yet unborn will not forgive us, if we fail
to seize the moment, and chart the course for the future of our land and our
people.
Why Buhari is President
*WHY AM HAPPY THAT MUHAMMADU BUHARI IS THE PRESIDENT*!!!
*...ODIDERE AYEKOTO...*
*Today, I want to take time and thank GOD for making Buhari the president of
this country*.
*At first, I did not understand why GOD allowed it to happen. But now I know
and I HAVE SEEN reasons why we should accept his Presidency*.
*Had it been Buhari did not become President*:
*1. We will think that by now fuel will be #45 per litre*.
*2. We will think that by now #1 will be equal to $1*.
*3. We will think that by now three million jobs would have been created*.
*4. We will think that by now unemployed youths would have been receiving
#5,000.00 stipends*.
*5. We will think that by now pupils would have been getting at least a
meal(including fruits) in school*.
*6. We will think that by now Buhari would have made his assets and liabilities
public*.
*7. We will think that by now maternal and children healthcare services would
be free*.
*8. We will think that by now Boko Haram will be a thing of the past*.
*9. We will think that by now all corrupt leaders will be in jail*.
*10. We will think that by now Electricity will be 24/7*
*11. We think that by now Nigeria will be the Greatest and strongest Economy in
the world*.
*12. We will think by now a bag of rice will be N5000 with a boom in
Agriculture*.
*13. We will think by now Nigeria would have recovered all looted funds*.
*14. We will think by now Nnamdi Kanu would have declared Independent State
of Biafra*.
*15. We will think that by now Nigeria would have gotten 3 standard working
Refinery*.
*16. We will think that by now Nigeria would have stopped importation of fuel*.
*17. We will think by now office of the First Lady will no longer exist*.
*18. We will think by now National Assembly salary would have been cut down
to 50%*.
*19. We will think that by now 720,000 jobs by the 36 states in the federation
yearly (20,000 per state) would have been created*.
*20. We will think that by now there would be permanent peace in the Niger
Delta*.
*21. We will think that by now Chibok girls would have been rescued*.
*22. We will think that by now the government would have started creating
additional middle-class of at least two million new home owners in the first year
in government and one million annually thereafter*.
*23. By now everybody will be blaming Goodluck Jonathan and calling him
clueless*.
*The list is almost endless..."*
*This is Nigeria of 2016*
*The Minister of Agriculture studied French*
*The Minister of Education studied Accounting*
*The Minister of Solid Minerals studied International relations*
*The Minister of Power studied Law*
*The Minister of Communications studied Law*
*The Minister of Transport studied English*.
*Minister of Labour and Employment studied Surgery*
*Minister of Budget and national planning studied law*
*Minister of Foreign Affairs studied Medicine*
*Minister of Petroleum studied Law*
*IGP studied Agriculture*
*I didn't say anything ooo but I hope u know why our economy is on recess*.
*forwarded as received
Where Do We Go From Here?: Policy Options
The catalogue of challenges currently experienced in Nigeria has opened up a

Pandora box, with all stakeholders discussing what caused the recession and how
to steer the economy back on the path of recovery. Suffice it to note that the
success of policy response to the problem is hinged largely on a functional
understanding of Nigeria’s macro economy.
From a historical perspective, it is common knowledge that in nations where

economic crises have transpired, their universities played significant roles in the
economic recovery process, thus the current economic crunch is a wake-up call
to the Universities as ivory towers of knowledge and repositories of high level
technical and professional expertise to put on their thinking cap to scientifically
analyze the practicability and relative impact of the different policy proposals, by
employing relevant analytical tools to carry out simulation experiments in line
with their time tested tenets of teaching, research and community development.
In the light of the forgoing therefore, I wish to present, in the following section,
proposed stimulus packages as panacea to reviving Nigeria’s economy. No doubt,
the University and her Alumni have serious roles to play.
The African Centre for Economic Transformation (ACET, 2014) faulted the
transformation platform of Nigeria for the extended period up to 2013/2014.
While applauding the overall growth in the range of 6.5% to 8% in GDP
between2000 and 2012, the Centre noted that this growth has failed to translate
into a strong diversified economy. Oil alone accounts for more than one-third of
the GDP and more than 90% of the exports. Manufacturing employment has
been in decline, and the nation’s informal sector still accounts for no less than
70% of total employment. Youth unemployment has more than doubled from
15% in 1986 to about 38% in 2011; and extreme poverty persists at about 68% of
the population in 2010 (ACET, 2014).
The ACET (2014) concluded that Nigeria’s situation is a case of Growth without
Depth. The Centre employs the acronym DEPTH to define the five missing
factors in Nigeria’s development quotient:
st
▪ D for Diversification - ACET ranks Nigeria as 21 out of 21 countries
surveyed on this matter. The proportion of industrial manufacturing as
part of the GDP, remains negligible at 3% - which is a far cry from Sub-
Saharan average of 10%. Commodity exports are very concentrated, with
the top five exports making up some 94.3% of total exports in 2010. The
five products are: crude petroleum, refined petroleum products, natural
and manufactured gas, leather and cocoa. Diversification must proceed in
different directions: cross sectoral diversification, export diversification,
diversification within primary product lines like oil and gas, and so on.
Happily, the Buhari administration has committed itself to the
diversification into agriculture and solid mineral production. However, it
is not enough to continue to concentrate on export of these products in
their crude and unrefined states. There must be some processing and
value-adding activity.
th
▪ E for Export Competitiveness - The ACET ranked Nigeria 18 out of 21 on
this score. The emphasis is on the need to increase the competitiveness
ratio - the relative export intensity of production;
th
▪ P for Productivity - Nigeria ranked very poorly on this item - 19 out of 21.
Manufacturing value added per worker was a factor in the determination
of the country’s placement. Indeed, manufacturing is at a very
rudimentary stage, and industrialization remains an inconsequential
factor in the nation’s economic equation. The industrial infrastructure for
meaningful manufacturing does not exist: no petro-chemical industry to
drive the process, no effective iron and steel complex for production of
flat steel, and a deficient power and energy sector that guarantees an
inhospitable environment. The environment for good business is lacking
as the nation ranks poorly on this scale.
th
▪ T for Technology - Nigeria ranks high on this head - 4 out of 21
countries. Much of this technology is evident in manufacturing
production (at 35%), but the share in exports is quite low at between 4%
and 6%.
th
▪ H for Human capacity development - Nigeria ranks 16 out of 21. The
UNDP Human Development Report (2015) considers how well positioned
Nigeria is to become an effective player in the globalization process. The
Report also assesses technical limitations and socio-political forces that
could limit Nigeria’s capacity for globalization. In addition, the Report

finds that despite being the world’s sixth largest exporter of petroleum,
Nigeria is unable to enjoy many of the globalization’s benefits due to its
extremely low ranking in human development aspects. To address this the
Report presents a framework for action to create an enabling environment
for a competitive economy. This includes massive investment in
technological education, intensifying regional integration efforts and
strengthening partnership between civil society and the state.
In general therefore, the concept of human security helps to bring to the

fore the fact that poverty, hunger, lack of access, diseases, natural
disasters, natural resources exploitation and use are all part of those
general issues that represent risk for human development. The challenge
for improved HDI lies in a number of related actions: Citizenship and
social capital; Natural resources and the environment; Economic security
with emphasis on diversifying the economy and generating employment
and income; Personal security resolving violence, communal conflict,
illicit trafficking of small arms, drugs; Access to services such as health,
education, justice, information and power; Food security and Natural
disasters.
A JEWISH OBJECT LESSON
th
The story was told of the German Kaiser in the 19 century who inquired of his
Chancellor, “Can you prove the existence of God?” The Chancellor, Otto Von
Bismarck, calmly responded in the affirmative: “The Jews, your majesty! The Jews”
The existence and the flourishing of the Jews, was all the proof the Chancellor
needed, to show that God exists.
Perhaps, it was Perry Stone (2009) who first used the term: “Jewish DNA of
Success”. This was in an attempt to understand and unravel the secret behind the
overwhelming dominance and tremendous success of the Jew in every endeavor
of life. His book titled: Breaking the Jewish Code, sought to discover and uncover
secrets from Jewish truths and lore, on how to transform life, family, health and
finances. Yet another author Steven Silbiger (2009) scripted the text, The Jewish
Phenomenon – discussing principles of Jewish secret to success. Still a third,
Brackman & Jaffe (2008) wrote the piece, Jewish Wisdom for Business Success –
Lessons from the Torah and Other Ancient Texts.
The Jewish success story is most remarkable. As a nation, they comprise less than
1% of the entire world population. For no less than 1,939 years, the Jews were
without a homeland. They had no country they could call their own; the Hebrew
language was all but extinct, and they had neither a national capital, nor a
national flag, nor even a national anthem. Most dramatically and miraculously,
today the Jews have resurrected from the graveyard of history to return to their
homeland, speaking their own language, with a common capital, Jerusalem.
Notwithstanding their small number, the Jews hold the balance in the world of
science, arts, banking and finance, technology and law. To date, no less than 176
Nobel Prize Winners are Jews, and 25% of organizations winning the Nobel Prize
are Jewish or co-Jewish founded. Further, 45% of richest Americans are of Jewish
origin, one-third of all American millionaires are Jews, 20% of Professors in
leading US Universities are Jews, and 40% of Law Partners in New York and
Washington DC are Jews.
In the area of Medical Science and Research, there is even a more intimidating
list of accomplishments of this small race of people. Salvarsan, the drug applied
in the treatment of syphilis was discovered by a Jew, Ehrlich. Wasserman
reaction used in the test for syphilis was discovered by another Jew. Digitalis
which is applied in treating heart disease was developed by a Jew, Ludwig Trabo.
The medical world owes the treatment of typhus to Jews, Widall and Weill. The
application of insulin in the treatment of diabetes resulted from the research of a
Jew, Minkowsky; and the treatment of aches and pains with Ovarmidon and
Antipyrin, we owe to Jews, Spiro and Eiloge. It was a Jew, Oscar Leibreach who
first applied Chloral Hydrate in the treatment of convulsions.
If indeed the global medical practice were to be rid of every Jewish influence,
there would be nothing left for mankind in that sector. And the same can be said
of practically every area of human endeavour. Their female pilots, often
nicknamed Sabra, are the best in the world. Their Air Force is first-rate, and they
remain a technological wonder, standing shoulder to shoulder with the likes of
the US, Germany, Russia, Britain and France. Their agricultural skills remain a
wonder; they could transform a desert and dry land into a flourishing garden and
orchard, exporting citrus products to the rest of the world. And till today, they
remain the best security experts and consultants to the global community. The
Jews excel in whatever they put their hands to do; and they never settle for
anything but the best.
So what is the secret of the Jews? We have often heard the view that the Igbos
are part of the lost tribes of the Jews. How much of the characteristics of the Jews
do we have as a people? Silbiger (2009) identified seven core values or beliefs
that lay at the heart of Jewish achievement:
▪ Understand that real wealth is portable; it is knowledge. Material wealth

created by Jews is much more than just money; it includes advances in the
arts, sciences and humanities that made the money possible. All through
their history, the Jews have faced repeated expulsion from their homeland
- whether at the hands of the Romans at the turn of first millennium (in
100 A. D.), or during the days of Nazi Germany in the late 1930s and 1940s,
or even at the hands of ancient powers of Egypt, Assyria and Syria. It thus
became imperative for the Jews to have portable wealth and skills to
survive. Gaining knowledge for knowledge sake, is a core Jewish value;
▪ Take care of your own and they will take care of you. Jews zealously deploy
their wealth and time for both charity and social action. It is part of their
religion that a man is only as wealthy as the amount he is able to give to a
worthy cause. Any time Jews around the world faced any threats, every
Jew felt a compulsion to send money and relief. They are taught that
charity is an obligation rooted in social justice, not just in love or pity for
their fellow men;
▪ Successful people are professionals and entrepreneurs. The joke was told
about a Jewish mother walking down the street with her two young sons
strutting after her. A passerby asked her how old the boys were. The
woman replied: “The doctor is three, and the lawyer is two”. Even from that
early stage - from the cradle - the foundation of entrepreneurship and
professionalism was laid in the life of the Jewish child. Victimised,
brutalised and traumatised by most societies where they lived, the Jews
learnt to turn adversity to advantage by becoming professionals,
tradesmen, shopkeepers or business owners. Their challenges became

their biggest competitive advantage wherever they found themselves,;
▪ Develop your verbal confidence. This is the ability to speak up, to be bold,
assertive, willing to demand your due, to defy tradition, challenge
authority, to raise eyebrows. Critical reviews, with intensive questioning
and debate, are part of the heritage of the ordinary Jew. Verbal confidence
is a critical key in unlocking the other secrets of Jewish wealth wisdom.
Thus, early in life, the youths are encouraged to develop a Google
mentality. The Jewish Torah classifies children into four: one who is wise,
one who is rebellious, another who is simple, and the last who does not
even know how to ask questions. The object lesson for the clan was the
rebellious son; he offers the opportunity to teach about a people’s
dependence on their God;
▪ Be selectively extravagant but prudently frugal. Jews are savvy consumers:

they arm themselves with extreme product knowledge, selectively
extravagant on a few important items and pervasively frugal on the rest.
Born into both a culture and a religion simultaneously, the Jew develops
one set of values by informal social interaction and religious instruction.
They celebrate and promote books and reading like no other segment of
society; they possess and pursue a higher level of product knowledge to
get the best price, quality, features and durability. And these habits help
them in their ability to save and create the capital required for
investment. Without money, Jews view themselves as “naked to their
enemies”; but to acquire money without education will create a household
with many things, without the security to maintain and support itself;
▪ Take pride in individuality; encourage creativity. The sense of difference,

individuality and separateness has been the source of great power for the
Jewish people. The community is similar to the Internet; structurally it
does not have an established hierarchy. It is a network of individuals and
independent organisations. Parents encourage their kids to stand out and
be heard, and they do not raise conformity to the level of a virtue. The
ability to strike out on one’s own helps breed the entrepreneurial spirit
that has led to the formation of many businesses and creative enterprises ;
▪ Be psychologically driven to prove something. A long history of

persecution, combined with an enduring ability to survive, has resulted in
a restless optimism that drives Jews to find new answers. It has pushed
them to pursue alternate paths, many of which have produced
extraordinary results. They have always been trying to gain acceptance,
while at the same time maintaining their cultural identity. This causes a
great deal of internal conflict, but it also serves as a drive to succeed.
Experience has shown Jewish people that dependence on others can be
dangerous because the politics of the day may change. If you are
independent, at least you succeed or fail upon your own performance
(Silbiger, 2009).
Stimulus Packages as Panacea to Reviving Nigeria’s Economy
In the views of Fabiyi (2016), the vulnerability of the value of the Naira to the
price of oil is a symptom of the structural imbalance in the Nigerian economy.
The proposed stimulus packages discussed hereafter would help to boost exports
in the country and reposition the naira from being over dependent on oil, while
at the same time, reducing Nigeria’s over dependency on imported goods. This
will not only help in addressing issues that relates to the development of credit
as a stimuli for reviving the Nigerian economy, but would help in addressing
Nigeria’s infrastructural deficit in a bid to enhance foreign direct investment
with the hope of driving growth in Nigeria.
a. Localize refining of petroleum products

b. Enhance access to credit.
c. Promote agricultural policies to drive self-reliance and reduce
imports
d. Leverage infrastructure deficit financing to boost the economy
e. Stop Protecting the Naira – let it fall.
Where Does The University and the Alumni Come In?
Postindependence Nigerian Universities have been playing key roles in

manpower training for the nation’s economy and the development of their
communities, through knowledge generation and transfer. These, they
accomplish through teaching, research and community service. However, a third
mandate has been added: It is now expected that universities, the world over,
should focus on innovative ventures and entrepreneurship as well as the
commercialization of research findings. Unfortunately, Nigerian universities
have continued to focus on their traditional role of training scholars and leaders
and have remained deficient in the practical application of knowledge and are
incapable of responding to the ever changing demands of the job market.
Nowadays, there seem to be a disconnect between the academia and industry

(Jeroh, 2009) as graduates lack the requisite hands on skills and expertise to
deliver what is required at the work place. This calls for the questioning of the
functionality or relevance of the current school curricula in the face of a dynamic
globalised world which we find ourselves; a global world where information and
trend change at the speed of thought. Thus, if the universities and alumni must
remain relevant, there is the need to deviate from its traditional role of teaching,
research and community service and embrace the new mantra of innovation and
entrepreneurship education as the question today is not about what is your
certification but what you can do practically to be self reliant if given the
opportunity. In the light of the forgoing therefore the following measures are
suggested as avenues the universities could explore as palliatives for mitigating
the effects of this recession:
1. Nigerian universities must strive to be more innovative and
entrepreneurial and play leading roles in the quest for technological
development, which the nation urgently requires. This can be achieved
through a very versatile consultancy services unit where students would be
taught the principles of entrepreneurship, business plan development,
entrepreneurial finance, soft skills, legal aspects, commercialization, and
marketing, etc. Such units will serve as both teaching and revenue
generation centres.
Crafts and technical skills like carpentry, building technology, bead making,
soap manufacturing, photography, fish farming, snail farming, poultry, crop
farming etc. could be explored and fully commercialized with a view to raising
functional economic self reliant students that will contribute meaningfully to
economic development. In this regards, the university curriculum should be
revised to include entrepreneurial courses that would train students on local
crafts peculiar to the host communities of Nigerian universities. For instance, in
the Awka axis, students should be trained on the best means of producing items
like the Ogene and other products of blacksmith.
A very successful example is the Covenant University model were all her
students are compulsorily required to undertake courses in entrepreneurship
and the products from such ventures fully commercialized to boost the revenue
base of the university and improve manpower capacity utilization. Another
good example is what is obtainable here in UNIZIK through the Chike Okoli
Centre for Entrepreneural Studies.
2. Nigerian universities should avoid inbreeding and embrace the

universality of university education by seeking to attract and admit foreign
students especially for postgraduate studies at the masters and PhD level. So
many universities in Europe and America generate huge capital inflow from such
foreign students that come to study on the shores with ripple effects on the socio
economic activity of the university, host community and general economy at
large.
3. Nigerian universities should focus more on user relevant research

focusing on exploiting the economic potentials of their host communities’
particularly in the areas of agriculture and solid minerals development. The
findings from such research which invariably will culminate into product and
services could be licensed as patents and commercially exploited by the
university and inventor for their economic benefit. The aggregate revenue these
activities will generate both for the individual inventors will go a long way in
mitigating the impact of the recession.
4. A scenario where small and medium scale manufacturersoutsource

procurement of raw materials’ and fabrication of parts to foreign technicians
from China and Japan when we have universities of technology and agriculture
in Nigeria is totally unacceptable. The universities through the establishment of
technology transfer offices and technology incubation centers should go into
the production of high quality substitutes that meet international standards.
This will go a long way in saving scarce foreign exchange, create jobs locally,
improve the value of the local currency and improve general living standards’ of
the citizenry.
Conclusion
Having exhaustively discussed the current debilitating condition of the Nigerian

economy, there is no gainsaying the fact that there is need for urgent action on
the part of all stakeholders in order to steer the economy back on the path of
recovery. The universities as a citadel of learning and innovation have critical
roles to play. In this regard, the government as proprietors of public universities
needs to provide the enabling environment needed to harness the potentials of
the universities. For example, the federal ministry of education through
interventionists agencies like TETFUND should set aside substantial amount to
fund both basic and applied research in Nigerian universities and empower each
institution to establish Technology Transfer Offices in order to provide
incentives to individuals and companies for the production of new products and
services.
Sustained investment in innovation and research is also essential for national

development. To achieve this, government needs to invest not less than 3% of
her GDP to make any meaningful impact on Research and development.
Lastly there is the need for the enactment of an enabling legislation, to safeguard
and enforce Intellectual Property Rights (IPR) which allows innovators to reap
the benefit of their creative ideas and reward their risk-taking ventures. Because
without effective Intellectual Property Rights enforcement, it will be difficult for
Nigeria to benefit from global innovation networks since most overseas
innovative firms will hesitate to invest or form partnerships with Nigeria if their
Intellectual Property Right will be readily stolen.
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APPENDIX
Table 1.Countries that experienced Recession and how they got there
(2007-2009)
Countries Dates In the first quarter
Singapore October 10, Its first recession since 2002, Singapore was first
2008 Asian country to slip into a recession following the
credit crisis. Singapore’s export-dependent
Economy shrank by an annualized 6.8% in third
quarter 2008 after a 6.0% contraction in the second
quarter.
Germany November 13, The biggest European economy contracted by 0.5%
2008 in third quarter 2008 after GDP fell 0.4% in the
second quarter, putting it in recession for the first
time in five years.
Italy November After three year of respite, Italy fell into a recession
14,2008 when its third quarter 2008 GDP contracted 0.5%
following a second quarter drop by 0.3%.
Euro zone November As an economic bloc, the Eurozone officially slide
14,2008 into recession in third quarter 2008 owing to

pressure from German and Italian economies. This
was its first recession since its creation in 1999. By
first quarter 2009 almost all the economies in the
zone had experienced a recession.
Japan November 17, Japan, the second largest economy in the world after
2008 the US, was hit by a recession in the July-September
quarter of 2008 with a contraction of 0.1%, after an
earlier 0.9% contraction in the previous quarter.
Sweden November 28, The Scandinavian country entered in to recession
2008 after GDP shrank 0.1% in both the second and third
quarter of 2008.
United December 1, The United states slide into recession in December
States 2008 2007, the first economy in the world to do so during
this crisis; and bringing to an end an economic
expansion that spanned six years.
Canada December Canada has experienced intermittent negative
9,2008 growth since the commencement of this crisis and
was on several occasions on the brink of a recession.
After a sharp fall of 3.4% in the fourth quarter of
2008, another decline by 1.4% in first quarter 2009
took it into recession.
UK January 23, The world’s sixth biggest economy experienced a
2009 1.5% dip in GDP during fourth quarter 2008 after a
0.6% decline in the third quarter, taking it into its
first economic recession in over 16years. There was a
further 1.9% decline in first quarter 2009.
Taiwan February 18, The Asian Tiger declined by a whopping 8.36% in
2009 fourth quarter 2008, bringing it into recession
having suffered two consecutive quarter of
economic contractions.
France May 15, 2009 After narrowly escaping a recession in 2008,
Europe’s second biggest economy contracted by
1.2% in first quarter 2009, the second consecutive

decline after a 1.5% fall in fourth quarter 2008.
Mexico May 20,2009 The Mexican economy was the first in Latin
America to officially enter recession, with its GDP
shrinking 8.22% in first quarter 2009, after an earlier
decline by 1.6% in fourth quarter 2008.
South Africa May 27,2009 South Africa was one of the very few countries in
Sub Saharan Africa, which, owing to its relatively
huge exposure to the western economies, entered
into a recession during the current global economic
crisis. A major drop in export demand caused a GDP
decline of a whopping 6.4% in first quarter 2009
after falling 1.8% in the previous quarter, resulting
in the country’s first recession in 17years.
Switzerland June 2, 2009 After declining by 0.3% in fourth quarter 2008,
Switzerland entered a recession in first quarter 2009
when the economy shrank 0.8%. the recession was
driven by a plunge in export demand.
Brazil June 9, 2009 After a decline in GDP in the previous quarter,
Brazil slipped into a recession in first quarter 2009.
Source: Wikipedia; CIA Fact book.2009.
Table 2.Some Major Rescue Packages across the Globe
Country Date Value Policy Thrust
United February Economic The Act provided for several kinds

States 2008 stimulus of economic stimuli to boost the
Act of 2008 U.S economic and possibly avert a
recession, or ameliorate economic
conditions. It essentially offered
tax rebates created and backed by
law to be paid to individual U.S
taxpayers in 2008 in a bid to boost
consumer spending
United October Emergency The Act authored the united
States 2008 Economic states Secretary of the Treasury to
Stabilization spend up to $700billion to
Act of 2008 purchase distressed assets,
especially mortgage-backed
securities, and make capital
injections into banks.
United 2008 The Troubled The program allows the united
States Asset Relief states Treasury to purchase
Program illiquid, difficult-to-value asset
(TARP) from banks and other financial
institutions in a bid to improve
the liquidity of these assets by
purchasing them using secondary
market mechanisms, thus
allowing participating institutions
to stabilize their balance and
avoid further losses.
United January $819billion The package provided for tax cut
States 2009 Economic for people and businesses by
Stimulus $275billion, while pumping more
Package than $540billion into a range of
initiatives including road and
bridge repair, increased
unemployment benefits,
investment in new technology
and renovations to 10,000 schools.
United November 20billion The package involves motley of
kingdom 2008 pounds Fiscal tax-breaks, handouts, and a freeze
Stimulus on previously announced tax
Package increases, amongst others, in a
bid to spur consumer spending
and save businesses from going

under.
Germany January €50billion The package involved a new
2009 Stimulus borrowing level of €36.8bbillion.
Package It included €17.3billion of
investment in the country’s
infrastructure, as well as tax cuts,
a one-off €100 child bonus, and an
increase in some social benefits.
There was also a package to boost
the nation’s auto industry by
offering people the opportunity to
trade in cars more than nine years
old to receive a €2,500 bonus
towards a new or slightly used
car.
France February 26billion The package included €11billion to
2009 Stimulus help businesses boost their cash
Package flows, while a further €11billion
was provided for direct state
investment and the remaining
€4billion was for the
improvement of rail
infrastructure, postal service and
energy services.
European November (€200billion) The thrust of the plan is
Union 2008 Stimulus protecting workers, households
Package and entrepreneurs as the impact
of the financial crisis bites. The
plan proposed more support for
vulnerable groups, including
investment to boost job skill and
help people stay in jobs or find
new ones.
Japan April 2009 ¥15.4 trillion The stimulus package includes

economic emergency steps to generate jobs
stimulus and help corporate finance, and
package strategies to reinforce Japan
competitiveness. It also included
reduction in taxes on gifts of
financial assets to encourage
seniors to give some of their
saving to their children and
grandchildren for the purchase of
big-ticket items such as homes.
China November Four trillion The package includes measures to
2008 Yuan stimulus upgrade its infrastructure
package particularly roads, railways,
airports and the power grid. The
package also sought to raise rural
in comes via land reform and
social welfare.
Source: BBC, CIA World Fact book 2009.

Chapter Three Surviving The Present Economic Situation in Nigeria: The Role of The University and The Alumni

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FESTCHRIFT IN HONOUR OF PROF PITA NWABUEZE EJIOFOR 47

SURVIVING THE PRESENT ECONOMIC SITUATION IN

EMMA I. OKOYE, PhD

During the administration of Goodluck Jonathan, Nigeria’s economy was said to

What is Economic Recession?

According to IMF (2009), economic recession is a decline in annual per-capita

Recessions generally occur when there is a widespread drop in spending (an

external trade shocks, adverse supply shocks or the bursting of an economic

Causes of Economic Recession

Notably, the occurrence of recession in an economy usually result from a

 Output and Job losses

 High inflation rates

 High cost of borrowing and poor infrastructure.

 Negative Growth in GDP in 2 Consecutive Quarters

 Structural imbalance (mono economy instead of diversified

Is Nigeria Experiencing Recession?

Nigeria’s economy is presumed to be in recession. This is because the naira has

Table 1: Table Showing Data For Selected Economic Indices in 2015

Spot Price (Avg. $pb) 55.93 61.69 48.56 47

Production (m' bpd) 1.87 1.9 1.86 1.9

Money Markets (End

CPI (%) 8.5 9.2 9.3 (Aug) 9.3 (Oct)

External Reserves 29.79 29 30.37 29.75

Parallel (N/$) 220 229 223.5 248

Market Capitalization 10.72 11.42 10.73 9.57

Source: BTI (2016), NBS (2015)

Fiscal Balance -1.4 -1.4 -1.4 -2.5 -2.2

Public Debt (% of GDP) 10.5 11.7 13.7 14.7

Source: BTI (2016), World Bank 2016

already 13.3%. Particularly worrisome is the coexistence of high inflation and

Economists postulate that once an economy exhibits two consecutive quarters of

Oil Production MBPD

Figure 2: Crude Oil Output (MBPD)

How Did We Get Here?:Background of Nigeria’s Economic Woes

 remittances from overseas-based Nigerians;

 earnings from oil exports; and

 Foreign Direct Investment.

i. Price of Oil and Its Implication on Our Economy

To have a better glimpse of the present predicament that we find ourselves as a

 homes purchased overseas,

 dollar demand for travel and vacations.

Below is the simple computation:

Selling Price Per Barrel: 100

Less: Production cost 20

 Remittances now is about $21 billion per year,

 Non-oil exports is about $3 billion per year

In any given perfectly elastic market, the resulting effect is a corresponding

iii. Removal of Nigeria from the Emerging-Market Bond Indexes By JP

Sometime in December, 2015, the CBN introduced several foreign-exchange

foreign-exchange measures made it much more difficult for foreign investors to

iv. Rising Inflation

 increase in the prices of petroleum products,

 high cost of borrowing, and

 poor infrastructure to support the manufacturing sector of the economy.

v. Frenzy of Capital Flight

While growth is on a downward trend, inflation continues to rise thereby making

The resulting effect of credit crunch is the creation of liquidity challenges

The Dutch Disease/Resource Curse.

Why Buhari is President

*WHY AM HAPPY THAT MUHAMMADU BUHARI IS THE PRESIDENT*!!!

*Had it been Buhari did not become President*:

*2. We will think that by now #1 will be equal to $1*.

WHY AM HAPPY THAT MUHAMMADU BUHARI IS THE PRESIDENT!!!

Had it been Buhari did not become President:

2. We will think that by now #1 will be equal to $1.

10. We will think that by now Electricity will be 24/7

The list is almost endless..."

This is Nigeria of 2016

The Minister of Agriculture studied French

The Minister of Education studied Accounting

The Minister of Solid Minerals studied International relations

The Minister of Power studied Law

The Minister of Communications studied Law

The Minister of Transport studied English.

Minister of Labour and Employment studied Surgery

Minister of Budget and national planning studied law

Minister of Foreign Affairs studied Medicine

Minister of Petroleum studied Law

IGP studied Agriculture