The Causes And Effects Of Economic Meltdown (Case study of
Nigerian Economy)
TABLE OF CONTENT
Table page…………………………………………………………………………..i
Approval page……………………………………………………………………...ii
Certification ………………………………………………………………………iii
Dedication…………………...…………………………………………………….iv
Acknowledgement…………...…………………………………………………….v
Table of contents…………………………………………………………………..vi
List of table ……………………………………………………………………….ix
Abstract………………………………………………………………………….…x
CHAPTER I: INTRODUCTION
Background of the study…………………………………………………………...1
Statement of the problem ………………………………………………………….3
Purpose of the study……………………………………………………………..…4
Significance of the study…………………………………………………………...4
Research questions………………………………………………………………....5
Delimitation of the study ………………………………………………………….5
Limitations of the study…………………………………………………………....6
Definition of terms…………………………………………………………………7
CHAPTER II: REVIEW OF RELATED LITERATURE.
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The concept of economic meltdown……………………………………………….9
The major causes of economic meltdown in Nigeria……………………………..10
The major effects of economic meltdown on Nigeria economy………………….12
The possible strategies for improvement of economic meltdown………………..15
Summary of the literature review ………………………………………………...18
CHAPTER III: RESEARCH METHODS
Design of the study……………………………………………………………….20
Area of the study………………………………………………………………….21
Sample and sampling technique…………………………………………………..21
Instrument for data collection…………………………………………………….22
Validation of the instrument ……………………………………………………..22
Reliability of the instrument……………………………………………………...23
Method of data collection………………………………………………………...23
CHAPTER IV: DATA ANALYSIS AND RESULTS
Research question 1………………………………………………………………25
Research question 2………………………………………………………………27
Research question 3………………………………………………………………29
CHAPTER V: SUMMARY, CONCLUSIONS, AND
RECOMMENDATIONS.
Restatement of the problem………………………………………………………32
Summary of the procedures used…………………………………………………32
Principal of findings………………………………………………………………32
Conclusions……………………………………………………………………….32
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Recommendations………………………………………………………………...32
Suggestions for further study
REFERENCES …………………………………………………………………..35
APPENDIX I: QUESTIONNAIRES…………………………………………….36
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LIST OF TABLES
Tables
Pages
1. Responses of the banking sector on the causes of economic
meltdown in the nation’s economy
26-27
2. Responses of the respondents on the effects of economic
meltdown in the nation’s economy
28-29
3. Responses of the respondents on the possible strategies
for improving economic status, growth and development
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30-31
CHAPTER I
INTRODUCTION
Background of the Study
Economic challenges may have different meanings to different
people. For our collective purpose, let us take the liberty to define
economic challenges as those unpleasant factors which have negative
effects on the economic betterment of the individual person. Such factors
that readily come to the mind in today’s Nigeria include: unemployment,
inflation, loss of income, insufficient food provision, inadequate clothing
and dilapidated shelter.
However, if we look out a little into the wider society, we find
additional factors, which pose serious economic challenges to the welfare
of the society as a whole. These include non-functional healthcare system,
inadequate funding of the education sector, poor sanitation, and bad
drainage, absence of public convenience, highway potholes and erosion
gullies.
Moreover, the rising prices of currently produced good and services
are now factors in the market because total production has become
grossly inadequate. Factors of production are said to include: labour, land,
capital and management. For total output to be more adequate, labour
and capital must be combined in a productive ratio. It follows that now
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that we are experiencing large scale unemployment and automatic cut
back the level of investment has occurred in the economy. Managers have
adopted an attitude of wait and see before risking their capital into future
and it is this same attitude of “wait-and-see” that aggravates the already
existing inability of the economy to produce more adequately. Thus, raw
materials lie waste and land previously “earmarked” for certain kinds of
production cannot be easily used. Reflect that each day wives or
housekeepers return from the market, they go through their budget
against their sloping bag to check if they have lost some money.
According to Momoh (2009), in Nigeria there are 8,000 law makers
at the local council level and that these law markers “earn about N316
billion in allowance per annum”. What about the National Assembly? These
are public officers of about 17500 in number (less than 2% of the national
population) of our national budget each year in the absence of satisfactory
production level, where do our leaders spend these huge sum of money?
Of course, they spend their money on foreign goods to maintain a high
consumption profile at home. The truth is that they have had to pay more
money for the same item than before or come home with less quantity of
it. A total statement has set in and such jargons as recession, depression
and lately “meltdown” have been deployed to more fully describe the
extent and the nature of our existing state of poverty.
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According to His Excellency, Goodluck Jonathan as reviewed by
Udeme (2010), the most profitable ways of achieving growth and
development in Nigerian economy is by embarking on economic reform
which should center mostly in the energy sector and infrastructural
development.
Statement of the problem
The task of achieving economic recovery and sustainable growth is
rather daunting as Nigeria appears to be sucked into the vertex of
interlocking vicious circles, which have interacted to keep it in a low
growth equilibrium trap. The progress of Nigeria’s economic direction may
be made in the content of the prevailing situation including the global
economic environment, as well as the current policy thrust of the
government intended to address the various products of the economy.
Obviously, growth outcomes would depend on initial conditions, the
policy stance and its implementation and the interplay of various stake
holders forces. To form a meaningful view of the prospects
for
development in Nigeria over the next few years, a question may be
Asked thus: is economic development in Nigeria an impossible task? Put
more specifically, what are the prospective for achieving much higher GDP
growth rate of 7-10% per annum, massive employment over the next 10
years, which will be needed to reverse the poverty trend and to cope with
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rising population? These problems have been instructional to the low
productivity that characterize the activities of the Nigerian economy and
these of course are the major factors that motivated the selection of the
topic of study by the researchers.
Purpose of the Study
The main purposes of this study were to determine the causes and
effects of economic meltdown and advance the ways for the growth and
development of the Nigerian economy. Specifically the study was
undertaken:
1. To determine the major causes of economic meltdown in the
nation’s economic sector.
2. To determine the effects of the economic meltdown to economic
growth and development.
3. To determine the way forward to achieve economic recovery and
sustained qualitative growth in the nation’s economy.
Significance of the Study
The finding of this study should be beneficial to both students and
teachers of economics and subsequent researchers who might be
interested in this and other related areas of this study.
The study is knowledge enriched and therefore would be of immense
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help to the present and prospective economic policy makers in the Nigeria,
economic system/sector especially in the area of economic planning,
growth and development.
It will also be of immense help to the government. This is because
the type of economic system by a country can be determined by the ruling
government of such nation.
Potential students and professors economics in and within our
institution of higher leaning will be prepared academically, politically,
socially, economically and professionally to face the economic challenges
to ensure quality production equitable distribution and the consumption of
goods and services by the Nigeria’s citizens.
Research Questions
The following research questions were answered:
1. What are the major causes of economic meltdown in the nations
economy?
2. What are the major effects of economic meltdown in Nigerian
economy?
3. What are the possible strategies for improving the economic status,
growth and development of the Nation?
Delimitation of the Study
The study was strictly carried out to determine the causes and
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effects of economic meltdown to the Nigerian economy.
The researchers focused on banking sector such as the central Bank
of Nigeria (Enugu Branch) and Union Bank (Okpara Avenue Branch) etc for
them to help in finding of the meanings of the economic meltdown in
Nigeria economy, major causes, effects and possible strategies to it.
The research was delimited to some factor such as:
Finding out the major causes of the economic meltdown in Nations
economy sector; the effects to economic growth and development; and
the way forward to achieving economic recovery and sustained qualitative
growth in the nation’s economy. The researcher used the banking sector
because they have more knowledge of the economic, situation at hand
which would contribute positively the findings.
Limitation of the Study
The researchers were confronted with a number of obstacles during
the course of this study. Some of this obstacle included:
a) Financial constraints and time as the greatest limiting factors to this
study especially time. This can be seen in the case of the
respondents when we find it difficult to achieve our purpose
because of accumulated works in the their offices.
b) Problem of getting accurate statistical data. It was difficult for the
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researchers to get dependent and accurate statistical data since
them were of different level and categories in position of office and
authority.
c) Some of the respondents who were made up of Bank staff top
officers and managers from the central Bank of Nigeria (CBN)
Garden Avenue, Enugu bluntly refused to fill our questionnaire or
answer basic questions posed on them. Some of them had
reservation and maintained that they were not in the best position
to respond when actually they were.
Definitions of Terms
a.) Economic meltdown: is a downturn in a nation economic
activity.
b.) Economic planning: Economic planning is the allocation of
resources by the government in such away that growth is
smooth as rapid as possible leading to an overall improvement
in the standard living of the people.
c.) Devaluation: Devaluation is the fall in value or lowering of
the exchange rate between a country currency and other
nation’s currency.
d.) Inflation: Inflation refers to a state of economic affair in
which too much money constantly chases too few currently
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produced goals and services in a country.
e.) Unemployment: Unemployment means the existence in our
economy of a large number of able bodied men and woman
who are seeking for jobs but are unable to find any.
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