The Major Causes Of The Economic Crisis In Nigeria

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Economic crisis is a situation in which the economy of a state or country goes through sudden or unexpected downfall and this is caused as a result of financial crisis. Financial crisis is that is used to refer to a number of circumstances where by some financial assets go through a sudden or unexpected loss in value. In the 19th and 20th centuries, many financial crises were as a result of some banking panics and many recessions coincided with these panics. Financial crisis presents itself or appears in many different forms such as: stock market crashes and the bursting of other financial bubbles, currency crises (like what is going on in Europe currently. Especially in Spain and Greece (NEWS, 2012)), and sovereign defaults. Financial crisis …show more content…

One of the countries where this situation is at an intense level is Nigeria. The economic crisis in Nigeria is provoked by certain factors such as poverty, terrorism in Nigeria, mismanagement of natural resources, corruption, unavailability of constant power supply and spread of diseases leading to low investment. These factors are generally known to be the major causes of economic crisis in Nigeria. I would therefore like to further elaborate on these salient points. The first major cause concerning economic crisis in Nigeria is poverty. The federal republic of Nigeria has a population of over 160 million being the largest in Africa. Despite Nigeria’s vast agricultural resources and oil wealth, poverty has been widely dispersed all over the country and has elevated seriously since the late 1990s. About 70% of Nigerians live on less than 1.25 us dollars a day. The rural areas in Nigeria, especially, are the areas that experience the wrath of poverty the most. As the population rises and forces pressure on diminishing resources , elevating environmental challenges continue to threaten and put food production at risk. …show more content…

Terrorism in Africa is currently occurring at a very high rate and Nigeria the country where it occurs the most. Foreign business and investors that have always been major contributions to the country’s economy are therefore moving out of the country and ceasing all their operational activities out of fear. This would therefore mean that the country is loosing a very great percentage of its economy and is therefore experiencing severe economic crisis as a result. The terrorism in Nigeria has recently worsened with the evolvement of an Islamic group that recruiting soldiers and creating an army and who only believe in violence. They indulge in all kinds of massacres such as suicide bombings, kidnapping, destroying state property such as bridges, schools, hospitals etc. As Result of this, huge of many, basically a greater part of the country’s budget that has been set aside for developmental purposes, has to be put into and used for maximum security in order to protect and save the lives of the country’s citizens. The country therefore does this at the expense of its own economy and what is left after this is therefore very little and not enough to even guarantee a stable economy. The country also has to spend a lot of money trying repair, renovate, rebuild and replace the destroyed property as a result of the terrorism and this therefore becomes a serious economic challenge. It

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