https://allafrica.com/stories/202011230074.html
Nigeria is experiencing a recession due to trying to tend to the covid-19 pandemic for months. this is their second recession in a span of 5 years, their last being in 2016. This recession is hitting them hard, as it is the worst they have had in 4 decades. The National Bureau of Statistics announced that their GDP had 3.62 percent in the third quarter of 2020. This being a significant drop, is still an improvement from there 6.10 percent drop in the second quarter. Due to this recession, the Nigerian government has created charges placed on the citizens and increased the amount on tax owed by citizens. The Central Bank of Nigeria (CBN), will most likely increase interest rates as well as they have cut the policy rate twice this year already.
This will be difficult for the civilians of Nigeria as jobs are already scarce with the covid pandemic meaning many people looking and without salaries. The government’s best option for itself and their people would be to spend more and lower taxes with the thought of inflation. Instead they chose to higher taxes and charges on citizens, which will have a negative effect as the fuel and electricity prices spike at a era of economic difficulty. It will be some time before Nigeria is able to come back from this recession as the pandemic is ongoing without a vaccine yet and their citizens will experience debt and poverty from the increase of taxes and prices on goods.
In the past classes one thing we talked about were the different levels of power. Long term, Long term but less stability, and short term elements. One of the factors going into long term elements of power was GDP. With Nigeria’s GDP continuing to drop during this recession they are losing power. Nigeria being one of the more powerful countries within the sub-saharan africa area, may lose some of their power and effect on other countries during this time. The biggest single indicator of a states power is it’s GDP, so if Nigeria wants to remain a big name in Africa, they need to find a way out of this recession and restore their country/economy to what it was before.