Lessons and Policy Implications of Nigeria’s Economic Recession: 2016-2017

Anachedo, Chima Kenneth 1
Department of Banking and Finance,
NnamdiAzikiwe University
ck.anachedo@unizik.edu.ng
Echekoba, Felix Nwaolisa PhD 2
Department of Banking and Finance,
NnamdiAzikiwe University
fn.echekoba@unizik.edu.ng
Egbunike, Francis Chinedu PhD 3
Department of Accountancy,
NnamdiAzikiwe University
cf.egbunike@unizik.edu.ng
Ubesie, Cyril Madubuko PhD 4
Department of Accountancy,
Enugu State University of Science & Technology
ubesiemadubuko@yahoo.com

The paper considers and discusses Nigeria’s economic recession as a market event because of its
exogenous nature primarily driven by fall in global oil prices in 2016. This led to a fall in oil
revenue and consequent reduction of total federally collected revenue within the period. This
followed suit as the country was monolithic and highly dependent on oil revenue for the bulk of
her revenue. Since the discovery of oil in the 70’s, the revenue trajectory of the country has
followed a similar pattern with oil price movements as successive governments stall in efforts for
the economy’s diversification. The lack of sustainable diversification of the economy stalled her
recovery process during the period as cost of governance kept on rising. This caused a rise in the
country’s deficit as borrowings increased to meet financing of recurrent expenditure. The event is
considered a recurring event as the COVID-19 pandemic which led to shut down of several sectors
globally and in Nigeria, such as the aviation sector, etc. led to a fall in demand in oil globally and
simultaneously decreased revenue in 2020. Despite policies instituted by present administration,
growth and recovery has been slow which the author attributes to over dependence on oil and
inconsistencies in policy implementation and recommends an expansion on the country’s export
base and three step pronged approach to reduce discontinuity.
Keywords; Economic recession, Oil revenue, Economic diversification, Recurrent expenditure,
Policy implementation.

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