Ojonugwa Julius Akubo's Blog

Most underdeveloped and developing countries of the world depend on external sources like loans from the IMF, world bank and other financial institutions for the efficient financing of their budgets. This dependence accumulate to become what is known as debt.Debt is that part of a nations finance that was acquired from external sources based on stated agreements. The degree of dependency on foreign support however differs if it were to be measured across the various developing countries. That is to say some countries are more dependent on foreign support than others. This support comes in form of either grants or loans for running their domestic expenses such as infrastructural development, job creations and even for the payment of salaries amongst other reasons. Of cause the fact that so many countries for genuine reasons may need to rely on foreign support is not the quagmire in this work. The problem is rather a question as to what eventually becomes the effect of the debt on the e

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Geographically people are located at different locations of the world hence the existence of various distinguishing mediums such as currencies, dressings, cultures and even business activities. Over the years the increasing insatiabile human needs accompanied by geographical limitations has brought about the need for some form of 'inter-trade"amongst this various geographic locations. For effective trade to exist therefore, there was need for an exchange rate to ensure equality in the transactions. What is Exchange rate? ' Exchange Rate ' is the price of a nation's currency in terms of another currency. It is the equilvalence or worth of a nations currency when compared to another country's currency. This means that exchange rate has two components, the domestic currency and a foreign currency. It can be quoted either directly or indirectly. Devaluation and Depreciation of Exchange rate A devaluation is when a country deliberately decides to lower its exc

Agriculture before the discovery of crude oil in the late 1950s was the main stay of the Nigerian economy. It was not just a source of revenue to the country, it was infact a source of employment to many Nigerians who specialized in crop farming, fisheries, animal rearing but to mention a few. It was then that we developed the groundnut pyramids, rubber plantations, coco plantations and the  big cotton fields that are gradually becoming histories today. With  the discovery of the crude oil in 1956 and the startment of full exploration in 1958 agriculture became of less importance to the government. As at of 1960 the contribution of agriculture to Nigeria's GDP was 60% but the reduction of this value became consistent with the increase in oil exploration. This was because crude oil sales became a faster way of earning more money by the Nigerian government. Little did the government notice the negative impact associated with crude oil especially with respect to agriculture. This con

Over the years many nations have survived via their domestically generated incomes while others have increasingly relied on external sources of finance which adversely results in increased foreign debt. As rightly stated by Hameed et al(2008) , too much of external debt could dampen economic growth by hampering investment and productivity growth which is the resultant effect of the fall in exchange rate. Although foreign debt as a topic is not the focus of this work its necessary to understand its effect as earlier stated. The term "Monotonous Economy" as used in this article defines an economy whose income source is strictly limited to a single major source. In other words it's an economy were diversification is absent. Nigeria for instance has over the years relied on crude oil for the financing and running of the entire government ever since the late 1970s.According to Anyanwu (1986), the major problems of the economy such as external debt obligation, unemployment, i