‘Global meltdown drives 50 million Nigerians into extreme poverty'

 

An economic crisis map

‘Global meltdown drives 50 million Nigerians into extreme poverty'

Benedicta Bassey

The Dean, College of Business and Management Studies, Igbinedon University, Professor Samuel Igbatayo, has said the global economy crisis remains the greatest challenge to Nigerian economy. He added that it has crippled the nation’s growth and has driven about 50 million people into extreme poverty.

The Associate Professor of Economics, who quoted the World Bank estimates, said the global economic crisis had place Nigeria in a perpetual struggle to remain on the path of stability and growth, particularly in the last three decades.

Igbatayo spoke at the 3rd Annual Conference of the Institute of Economists of Nigeria, an event with the theme “Challenges of sustainable growth in an era of global economics crisis,” held in Lagos State.

He said the nation’s economy was hit by the crisis as global consumption of crude oil declined in 2008, reducing government revenue and foreign exchange earnings. He however said while the economy was on the path to sustainable growth, total recovery was yet to be seen across all sectors, especially when there was an urgent need for social and economic development.

The professor further explained that the crisis had also undermined the country’s financial market, which reduced the prices of shares by more than 50 per cent in 2009 and unleashed stocks of the banking sector in the capital market, as a result.

Extreme poverty effect in the country.

He said, “The global crisis has unleashed a wave of economic and social consequences. Millions of people all over the world have lost their jobs, income, life savings and their homes.”

He added that the crisis had affected the Nigerian economy through transmission channels, as the nation’s crude oil export and the capital market had witnessed severe shocks that adversely affected its macro-economic stability.

 The economic expert however called for policies aimed at fostering structural transformation of the Nigerian economy to fast track economic diversification. He added that such policies should embrace international best practices, anchored on capital adequacy for financial institutions, coordination of financial market regulations, and strict guidelines associated with credit management.

Igbatayo further said the financial downturn brought, in its wake, a near collapse of the banking sector in several industrial economies; severe decline in global trade, investment and commerce; and rising unemployment and poverty incidence around the world.

In his submission, the INEN Chairman, Mr. James Katugwa, said the increasingly integrated global economic crisis had severely limited the ability of individual nations to implement domestic policies that could influence the adverse global macroeconomics trends.

He said, “The ongoing economic and financial market crises have also demonstrated that the emerging economies and their poorest and most deprived citizens are extremely vulnerable to such market turbulences.”

He added that the poor and underprivileged had faced the brunt of the economic stagnation, which he said had affected the nation’s growth