Nigerian Economy In 2009: Hard Times Knock Hard

With the current uncertainty of international oil prices, the global financial economic meltdown already mounting pressure on the Nigerian banking industry, and the sheer confusion and politicisation of Budget 2009 proposal, MARCEL MBAMALU writes that it has become imperative for the managers of both the Nigerian economy and the business community to put on their thinking caps and tighten seat belts for a rough ride in 2009.

Three days to the end of the year, Nigeria appears to be neck-deep in what, for want of a better expression, one might describe as a reversal of fortunes.

Reversal of fortunes in the sense that the economy is taking a beating - the global economic meltdown is, indeed, taking a toll on Nigeria and the unmitigated impact, when carried over to 2009, portends greater difficulties for weaker countries of the world, including Nigeria.

In the last four years, Nigeria had enjoyed an unprecedented macro-economic stability, high revenue growth, and some impetus for growth.

Foreign Direct Investment, portfolio investment had climbed to an all-time high; remittances from Nigerians living broad had also been growing.

But all of a sudden, the economy began a very steep downward trend, at a rate that is, to say the least, very frightening to all stakeholders, especially the manufacturing sector.

First was the unseasoned bearish default in the stock exchange, which some analysts optimistically described as a mere flash in the pan.

But soon, the country was, again, hit by the hurricane of the decline in price of crude. Subsequently, foreign reserves began a process of depletion that brought the figure from $63 billion, to about $50 billion, only within a short time. Government revenue has been declining, with greater emphasis on tax collection.