AN ASSESSMENT OF PUBLIC OPINION ON THE IMPLICATIONS OF ECONOMIC STAGNATION

CHAPTER ONE

INTRODUCTION

Background of the Study

Economic stagnation has historically generated a great deal of discussion among academics and decision-makers. The Great Depression of the 1930s and the more recent Global Financial Crisis of 2008 are two notable examples. During these periods, widespread economic hardship led to a significant shift in public opinion towards more interventionist economic policies. However, prolonged periods of slow or no growth in an economy are known as economic stagnation, and they have far-reaching effects on many aspects of society. This phenomena, which is frequently characterised by rising unemployment rates, declining consumer spending, and stagnating salaries, has a big impact on public opinion and shapes society expectations regarding the effectiveness of the government and economic policies (Ohakwe, 2019). 

The Nigerian economy entered a recession in the first quarter (Q1) of 2016 (since 2004), according to the National Bureau of Statistics (NBS). The recession was caused by a decline in confidence and a lack of new investments, an unusually long delay in government speeding during the period, contentious legislative squabbles over budget approval, the depreciation of the Naira in the foreign exchange market, pipeline vandalism, misaligned currency and forex shortages, a high interest rate environment, as well as trade and import restrictions. The  recession is a stage of the economic stagnation that follows two quarters of negative growth, marked by low investment and output, abnormally high unemployment rates brought on by widespread layoffs and downsizing, a decline in the availability of credit facilities, volatility in the foreign exchange market, illiquidity, and a decrease in trade and commerce (Asogwa, 2019). 

Currently, Nigeria's economic stagnation is caused by a number of things, such as dependency on oil exports, inadequate infrastructure, and corruption. Nigeria has the greatest economy in Africa, but systemic problems that precede Tinubu's leadership have hampered the country's growth. These difficulties were made worse by the COVID-19 pandemic, which in 2020 caused a recession. Even while the economy began to improve in the years that followed, growth remained erratic and unstable (World Bank, 2023). Economic changes targeted at increasing economic diversification, decreasing unemployment, and enhancing infrastructure have been the main priority of Tinubu's administration (Famakinwa, 2023). According to Agri, Maliafia, and Umejiaku (2023), the present recession appears to have an impact on Nigeria's sociopolitical systems, general living standards, imports, production, employment, and consumption demand. 

More than 500,000 jobs were lost, the amount of power supplied by the grid dropped from 3593MW to 2,2023.3MW, the rate of unemployment and underemployment increased to 31.2 percent, the growth rate of labour productivity fell to -0.4 percent, wages remained flat, and retail sales fell. Additionally, macroeconomic indicators continue to deteriorate, indicating that the economy may continue to descend into depression in the absence of appropriate government intervention. In market economies, governments have multiple responsibilities. These include redistributing income through taxes and transfers, defining property rights, upholding contracts, and resolving disputes to promote production and trade; enforcing laws intended to maintain competition; reallocating resources by offering public goods and stepping in to correct both positive and negative externalities; and promoting economic growth and full employment (Makinwa and Taylor, 2011). 

Furthermore, ineffective demand and poor economic planning, according to Nigerians, are the main causes of economic stagnation. While Nigerian economists argue that during recessions, distortions in consumption or output may cause the economy to stray from its target level of employment and production for a longer amount of time because wages and prices respond more slowly (Fapohunda, 2022). 

Nevertheless, Eneji, Dimis & Umejiaku (2023) holds that the government should interfere in the economy through monetary policy measures taken by the central bank and fiscal policy measures taken by the government, as these can aid in the stabilisation of output over the stagnation. However, some Nigerian economists frequently support active government intervention during recessions to mitigate their effects and prevent the economy's general level of activity from declining.Therefore, a survey will be conducted in order to assess public opinion on the implications of economic stagnation.

Statement of the Problem

Nigeria's economic history is characterised by expansionary intervals punctuated by notable contractions. The country's vulnerability was brought to light by the 2014 collapse in oil prices, which precipitated a severe economic crisis and accounted for a sizeable percentage of the national budget (Central Bank of Nigeria, 2016). The ensuing economic stagnation significantly lowered the standard of living for the typical Nigerian due to high unemployment and inflation. According to Akinlo, (2019) public trust in the government's capacity to steer the economy began to decline during this time, and many people voiced their displeasure with the alleged mismanagement and corruption in the public sector.

Additionally, public sentiment during times of economic stagnation frequently displays a blend of dissatisfaction, mistrust, and a demand for extensive reforms. However, studies reveal that Nigerians are most worried about rising living expenses, inflation, and unemployment (Oluwasanmi, 2018). This sentiment emphasises how quickly economic stagnation affects day-to-day living and how urgently sound economic measures that can spur growth and create jobs are needed.

Moreover, Nigeria's economic stagnation makes social inequality already present worse and increases public disatisfaction.  In these circumstances, policies pertaining to income redistribution, higher social spending, and anti-corruption initiatives are often supported by the public. For instance, politicians that pledged economic reforms and anti-corruption measures received a lot of support from the electorate in the 2019 election cycle (Oluwole, 2019). Despite the inauguration of Bola Ahmed Tinubu as President in 2023, the country continues to grapple with economic stagnation.The stagnation has a detrimental effect on national security since it has force unemployed graduates to turn to various forms of criminal activity in order to survive (Oladapo, 2023). Crimes such as drug pushing, kidnapping, ritual killings, cybercrimes, and advanced fee scams are on the rise as a result of job losses and the general high unemployment rate (Noko, 2023). This is because people are turning to these alternative ways of survival. Beyond that, the administration of the nation, cultural harmony, and socioeconomic processes are all more significantly impacted by these crimes. They also give the outside world a very bad impression of the nation. While the less educated utilize more extreme violent measures to survive, a large number of educated adolescents are dissatisfied with their lack of employment and  turn to crime (Phil, 2010). Hence, it is in the light of these that the study seeks to assess public opinion on the implications of economic stagnation.

 1.3  Objectives of the Study

The main purpose of this study is to assess public opinion on the implications of economic stagnation.  Specifically, the study will;

1.Determine the extent to which economic stagnation has affected the cost of living in Nigeria.

2.Assess the underlying causes of economic stagnation in Nigeria.

3.Assess the diverse effect of economic stagnation on Nigerian citizens.

4.  Proffer strategies required to mitigate economic stagnation in Nigeria.

1.4  Research Questions

The following questions have been prepared for the study:

To what extent has the economic stagnation affected the cost of living in Nigeria?

What are the underlying causes of the economic stagnation in Nigeria?

What are the diverse effects of the economic stagnation on Nigerian citizens?

What are the strategies required to mitigate economic stagnation in Nigeria?

1.5 Research Hypotheses

The following research hypotheses will validate this study;

H0: Economic stagnation has no significant effect on Nigerian citizens.

HA: Economic stagnation has significant effect on Nigerian citizens.

1.6 Significance of the Study

The study findings will assist the government in addressing the underlying causes of economic stagnation and work towards creating a more inclusive and prosperous economy. NGOs and social activists will be able to advocate for policies that protect vulnerable populations from the adverse effects of inflation. Nevertheless, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to public opinion on the implications of economic stagnation.

1.7 Scope of the study   

The scope of this study is boarded on  public opinion on the implications of economic stagnation. Geographically, the study will be delimited to residents of Lagos state.

1.8 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

 1.9 Definition of Terms

Economic stagnation: Refers to a prolonged period of slow or negligible growth in an economy.

Recession: A recession is a significant decline in economic activity that lasts for an extended period, typically recognized as two consecutive quarters of negative Gross Domestic Product (GDP) growth.

Economic: Relates to the economy, which is the system of production, distribution, and consumption of goods and services in a particular country or region.