The Effects of Global Financial Crisis in Nigeria

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THE EFFECTS OF GLOBAL FINANCIAL CRISIS ON NIGERIA’S ECONOMY The global financial crisis began in the United States of America and the United Kingdom when the global credit market came to a standstill in July 2007 (Avgouleas, 2008). The crisis, brewing for a while, really started to show its effects in the middle of 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems. It is a well known fact that the world is now a global village. As a result of this, the global economic meltdown is having a side effect on Nigerians to an extent that people’s standard of living has been seriously affected. The side effects on Nigerians include high cost of commodities, upsurge in social vices and unemployment. As a way of managing the situation, the government should cut down on the salaries of public office holders and reduce excessive spending in order to utilize the little resources available to provide the needed infrastructural facilities that will make life meaningful to the people, and focus attention on important projects. The concept of financial crisis

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults (Kindleberger and Aliber, 2005, Laeven and Valencia, 2008). Causes of the Crisis

The reasons for this crisis are varied and complex, but largely it can be attributed to a number of factors in both the housing and credit markets, which developed over an extended period...
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