THE EFFECT OF ECONOMIC RECESSION ON THE SAVINGS BEHAVIOR OF MEMBERS OF SAVINGS AND CREDIT COOPERATIVE SOCIETY IN AWKA SOUTH LOCAL GOVERNMENT AREA, ANAMBRA STATE.
CHAPTER ONE
INTRODUCTION
- Background of the study
Nigeria as a nation started enjoying economic buoyancy before and after independence despite the fact that her economy is a primitive one. Oyewale (2016) noted that Nigeria economy is a primitive one which its fundamental production tools are hoe, cutlass among others and production depended on energy stored in the muscle. Not long to the independence, oil was discovered and oil boom of the 1970s affected agriculture which had been the mainstay of Nigeria economy, Thus agriculture was abandoned due to the discovery of crude oil in large quantity. It is obvious that every Nigerian has now realized the dangers of an economy that is largely based on oil revenue which its price is currently dwindling in the global market. Consequent upon this Nigerians have finally been confronted with the bitter truth that the economy is in great recession. The effects of this economic downturn are already being felt by the people whom the members of the cooperative society are a part of. People find it difficult to feed, pay rent, children’s school fees; they even have little or nothing to save for unforeseen contingencies.
The word Recession according Afo (2016) is a state of negative economic growth for two consecutive quarters. It is also a business circle contraction which results in a general slowdown in economic activity. Macroeconomics indicators such as GDP (Gross Domestic Product), investment spending, household income, business profits and inflation fall while bankruptcies and the unemployment rate rise. Recession generally occurs when there is a widespread drop in spending; this may be triggered by various events such as financial crisis, an external trade shock or the bursting of an economic bubble. Nde (2004) affirmed that the emergence of global economic recession in 1980s has led to the fluctuating and volatile state of the Nigeria economy. Conversely, Oyewale (2016) observed that about 57 percent of Nigeria citizens are living below $1 per day and live very poorly in all development indices. The factor behind this is over population. National Directorate of Employment NDE (2010) said Nigeria has a population of over 150million people and an average annual growth rate of 2.5%.
Cooperative societies as one of the informal financial service providers are been regarded by the government as a tool for the country’s economic growth and development especially in the socio economic development of the rural area, elimination of poverty, solves the unequal income distribution problems and thus bridging that income disparity between rural and urban areas. In fact cooperative has been seen as the third engine of growth besides public and private sectors (Lipsey and Chrystal, 1995).
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