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Teezed is a Research Consortium aimed at assisting students and researchers with their research by providing proper guidance and statistical solution. Our dream is to provide an information repository where students and researchers can obtain a copy of an already made project/research work (similar to their topic) to use as a guide for their own project/research work. It has been observed that project/research works by our students and researchers end up being piled up in the analogue library of their institutions where they are mishandled, unkept and eventually become unusable. In most cases, they get discarded to make room for new ones due to lack of space. At Teezed, we take advantage of Information and Communication Technology (ICT) to make sure these research/project works are stored in a permanent and more secured digital location where students/researchers can have access to it, because as the saying goes, “what I see I remember”, research has shown that when a student/researcher see and use a copy of their research topic as a guide, they stand the chance of being rewarded with a great and testable research work. If you are deficient in the art of research, we have 24/7 counsellors who are ready to provide guidance/counselling at no cost. We also run a professional and standard statistical analysis that can be defended anywhere.
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1.1 Background to the Study
The global financial crisis which rocked the world economy during the period from 2007— 2009 represented the most serious and dire financial crisis the world has faced since the Great Depression. It was clearly a crisis brewed and blended in the United States of America (USA) but marketed across the globe via a labyrinth of information and communication networks. The Crisis was ignited by a burst in the USA housing bubble and grew to engulf global stock markets, over leveraged financial institutions, corporate house and governments in a an inferno of ruined expectations and lost wealth (Chuka, 2011). Dibra (2010) opined that the first global casualty of the financial crunch was the America Presidential Election, Senator McCane the Republican Party Candidate who seemed to be a plausible choice for the race until the onset of the financial crisis. He did not seem to have a clear road map out of the threatening economic crisis. Indeed ad the economic challenge persisted, he seemed to put every wrong foot forward. The rapidly with which his campaign unraveled the nest is now history as the first black emerged as the US president-Barrack Obama. In Nigeria, the symptoms of the financial meltdown were felt mainly in thee directions. First was that the capital market in Nigeria took a plunge where lot of personal wealth and life savings just went down the drain. Second, unemployment situation was already desperate before the crisis ensued. The meltdown has in no way mitigated the problem, money was getting more scare and costly and the naira was sliding very bad against the dollar. Third, there was a sharp drop in the amount available for distribution from the Federation Account (Nwanna, 2010).
According to Global Reporting Initiative (2007), in order to salvage the antecedents of the global financial crisis, the Nigerian government took varied measures aimed at mitigating the effect of the crisis on the Nigerian economy. This was done through a cut in public expenditure and rolled back in government financial commitments to different sectors of the economy. While the more developed economies saw a need to adopt a cheap money policy to encourage industrialists to borrow and invest in Nigeria, interest rates were on a steadily rising course. The veritable consequence is that while there are glimmers that the world may soon be emerging from the crisis, there is no discernible sign that the same can be said of Nigeria. Altman (2009) described the global financial crisis as an inevitable aftermath to a season of sharp business and economic degradation, deliberate corporate mis-governance and the fraudulent financial statements reporting. For a while, the global economy tattered on the brink of recession. The fall outs were fairly predictable, stock markets fell with a crash, over leveraged large financial institutions collapsed under their enormous debt burdens and government have been involved in crisis management complete with rescue packages and public equity intervention to bail out the ailing system.
Dibra (2010) opined that this scaly scenario was fairly unpredictable on economies of the world. So where is all these leading to? What sense can we make of all these confusions particularly for the economy? What are the implications of these scary scenarios? What benefits and penalties flow from the misadventures of all the immediate past? These and other issues constitute utmost concern to researchers the world over. In the light of the foregoing, this study examined the global financial meltdown and its effects on the Nigerian economy.
1.2 Statement of the Problem
Cyclical trends in the world economy define the peaks and troughs of economic prosperity and downturn in the economic management of the nation (Blomerg, 2008). The global financial meltdown in the world is a major challenge to all the countries in the world both developed, developing, and under-developed that is facing the heat of the financial crisis (Ferguson, 2008). There are opinions and arguments raised as to whether the global financial crisis has a direct or indirect effect on the Nigerian economy. It becomes too much contradictory when considering opposing facts before hands. Thus, this study examined the global financial meltdown and its effects on the Nigerian economy.
1.3 Objectives of the Study
The broad objective of this study is to examine the global financial meltdown and its effects on the Nigerian economy. The specific objectives of the study include:
1.4 Statement of the Research Questions
The study was guided by the following research questions:
1.5 Statement of the Research Hypotheses
The study was based on the following research hypotheses:
H1: The global financial meltdown is not caused by some factors.
H0: The global financial meltdown is caused by some factors.
H1: The global financial meltdown will not affect economic growth.
H0: The global financial meltdown will affect economic growth.
Ho: There are no measures to mitigate the effect of the global financial meltdown on the Nigerian economy.
Hi: There are measures to mitigate the effect of the global financial meltdown on the Nigerian economy.
1.6 Significance of the Study
This research study was necessitated to ascertain how the continuous meltdown in the world financial sector has affected the Nigerian economy, considering different opinions that advocated Nigeria isolation from the global financial crisis. This research study however will reveal the cause of the global financial meltdown. It will help to correct opposing views and also the study will examined the implication of the global financial meltdown on the Nigerian economy. Similarly, the study will proffer bailout recommendations and preventions of the global financial meltdown. The study will reveal the impacts of the global financial crisis on the Nigerian stock exchange, the Naira and her foreign reserves. Finally, the relevance and significance of the study is also to ascertain the extent to which the global financial meltdown impacts negatively on the nation’s financial sector and the relevant recommendations to bail out the economy.
1.7 Scope of the Study
The scope of this study will be restricted to the effects of the global financial meltdown on the Nigerian economy. Interviews and questionnaires will be tailored towards ascertaining the objectives of the study. Similarly, all findings from journals, periodicals, international dailies and prior research will seek to know the implication of the global financial meltdown on the Nigerian economy. For the purpose of effective coverage the study will be limited to examination and assessment of how the Nigerian economy is affected by financial meltdown which is a global phenomenon and as well the major factors that affect the economy of the country.
The study will also examine the causes of the global financial meltdown and recommend proper management techniques of the country treasury. It will equally identify the magnitude of the relationship between the financial status of a country Gross Domestic product (GDP) and the factors that affect a country’s economy globally.
Finally, it will assess measures put in place towards mitigating the effect of the global financial meltdown on the Nigerian economy and investigate how aware the government are of this danger ahead if proper measures are not taking to avert this financial crisis rocking the country.
1.8 Limitation of the Study
There are no studies that do not face one constrain or the other. The study was constrained by lack of data.
Despite these limitations, it is hoped that it will not hamper the quality of the research work.
1.9 Operational Definition of Terms
Altman, R.C. (2009) The Great Crash of 2008. Available online at http://www.foreignaffairs.org
Blomberg, T. (2008). Credit Swap Disclosure Obscures True Financial Risk Available online at http ://www.blomerg collapse. news
Chukka, B.O. (2011). Global Financial Crisis: Impact on the Changing Face of Accountancy Profession. Lecture Series, 001 Anambra: Charles and Patrick Limited.
Dibra, NO. (2010). The Changing Role of the Auditor: A Post En-on Analysis. Unpublished Ph.D Seminar Paper, Department of Accountancy, Abia State University, Nigeria.
Ferguson, N. (2008). The End of Prosperity. Time Magazine, Vol.173(9), March 2
Global Reporting Initiative (2007). The Global Financial Meltdown. Available online at http://www.globalreporting.org
Nwanna, 1.0. (2010). Volatility and Risk-Return Implication of Global Financial Meltdown in Nigeria. International Journal of Accounting and Finance, 12(6): 1-17