The world economy is facing the most severe financial crisis since the Great Depression of the last century. The risk of global recession has heightened significantly and volatility of commodity prices, which is the mainstay of most developing countries like Nigeria, has increased further. If this situation continues to deteriorate, developing countries could be in great jeopardy.
Time series data relating to the period 1990-2008 were collected and analysed accordingly, using the econometric technique of multiple regression. Statistical tests of significance were also carried out in order to determine the possible impacts of the current global financial crisis on the Nigerian economy. The tests include: Correlation Coefficient (R); Coefficient of Multiple Determination (R2); t-Test; F-statistic and Durbin-Watson test.
The findings of this study revealed that the financial crisis was responsible for the fluctuation in crude oil prices, external reserves, exchange rates, decline in export, lower portfolio and foreign direct investment (FDI) inflow, fall in equity market, decline in remittance from abroad, dwindling economic growth, etc.
It was concluded that the Federal Government should come up with intervention policies that will minimise these effects and jumpstart the economy and that business operators should learn to do things using resources at their disposal to develop and expand at manageable level to stem the tide of the crisis.