Managing the Impact of the Global Financial Meltdown on the Nigerian Economy

Abstract

This paper examines the Nigerian situation in the light of the lingering financial crises and proffers policy recommendations which may by adopted by relevant authorities to mitigate the economy against the vagaries of the crises. It also traces the genesis of the crises, x-rays the situation of a few economies in the face of the crises as well as policy options that have been adopted by governments and the success recorded so far. The paper observes that in spite of contentions of the weak integration of Nigeria with the rest of the globe, impact of the global crisis is gradually and steadily taking deeper roots in the economy as marked by declining government revenue, unprecedented fall in stock market values, significant depreciation in the value of the naira, rising inflation rate and depleting external reserves. To mitigate the present and secure the future against similar crises, the paper recommends among others the channelling of the external reserve which is being used to subsidize foreign exchange speculators into a financial stabilisation fund to enable banks and equity traders reinforce their liquidity and hence restore confidence in the dwindling stock market; stricter regulation and monitoring of activities in the financial and other sectors and ensuring of through recapitalization and strict regulation and supervision; a strong-base and reliable insurance industry capable of compensating monumental losses that may arise from breakdown in any sector of the economy.